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TransUnion's (NYSE:TRU) Returns Have Hit A Wall

Simply Wall St · 6d ago

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. However, after briefly looking over the numbers, we don't think TransUnion (NYSE:TRU) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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Return On Capital Employed (ROCE): What Is It?

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for TransUnion:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.087 = US$886m ÷ (US$11b - US$985m) (Based on the trailing twelve months to September 2025).

Therefore, TransUnion has an ROCE of 8.7%. In absolute terms, that's a low return and it also under-performs the Professional Services industry average of 16%.

See our latest analysis for TransUnion

roce
NYSE:TRU Return on Capital Employed January 5th 2026

Above you can see how the current ROCE for TransUnion compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering TransUnion for free.

How Are Returns Trending?

The returns on capital haven't changed much for TransUnion in recent years. The company has consistently earned 8.7% for the last five years, and the capital employed within the business has risen 54% in that time. Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.

What We Can Learn From TransUnion's ROCE

Long story short, while TransUnion has been reinvesting its capital, the returns that it's generating haven't increased. Unsurprisingly then, the total return to shareholders over the last five years has been flat. In any case, the stock doesn't have these traits of a multi-bagger discussed above, so if that's what you're looking for, we think you'd have more luck elsewhere.

On a final note, we've found 1 warning sign for TransUnion that we think you should be aware of.

While TransUnion isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.