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CoreLogic (CLGX) Stock Rises 55% YTD: What's Driving It?

Shares of CoreLogic, Inc.CLGX have gained 55% year to date, ahead of 0.5% growth of the industry it belongs to.

 

Let’s delve into the factors which have contributed to the company’s performance.

Consecutive Earnings & Revenue Beat

CoreLogic came up with better-than-expected earnings and revenue performance in five of the last six quarters. The top line benefited from strength in the company’s core mortgage and insurance, and spatial solutions. The bottom line was aided by revenue growth, operating leverage, better business mix, and cost-efficiency programs.

Raised Q3 Guidance

For third-quarter 2020, CoreLogic now expects revenues of $525-$535 million, compared with the guidance of $485-$515 million provided along with second-quarter results on Jul 27. The Zacks Consensus Estimate of $510.85 million lies below the current guidance.

Adjusted EBITDA is now anticipated between $187 million and $192 million compared with the prior guidance of $160-$175 million.

Further, the company expects operating leverage and cost productivity to drive adjusted EBITDA margin beyond 35%, increasing by more than 500 basis points year over year.

Raised 2020 Guidance

For 2020, CoreLogic now expects revenues of $1.920-$1.945 billion compared with the prior guidance of $1.86-$1.895 billion. The Zacks Consensus Estimate of $1.91 billion is lower than the current guidance.

Adjusted EBITDA is now anticipated between $615 million and $630 million compared with the prior guidance of $580-$600 million.

The company anticipates double-digit revenue growth during the second half of 2020, with at least upper single-digit organic growth and margin expansion of at least 300 basis points year over year.

Increased 2021 Guidance

CoreLogic has raised its full-year 2021 guidance.

The company now expects revenues of $1.965-$2.010 billion compared with the prior guidance of $1.91-$1.95 billion. The Zacks Consensus Estimate of $1.91 billion is lower than the current guidance.

Adjusted EBITDA is now anticipated between $635 million and $660 million compared with the prior guidance of $595-$615 million.

Shareholder Friendly Initiatives

Although many companies across diverse sectors have suspended dividend payouts and share buybacks amid the coronavirus crisis, CoreLogic remains one of those few that are sailing through the tough economic times while also maintaining dividend payouts and share repurchases.

The company has reaffirmed its plans to repurchase at least $500 million worth of shares in 2020, $300 million in 2021 and $200 million in 2022, to complete its current $1 billion authorization. Previously, concurrent with the second-quarter 2020 results, the company’s board approved a 50% dividend hike, raising the quarterly cash dividend from 22 to 33 cents per share.

Notably, CoreLogic has a track record of consistent share repurchases and dividend payments. Such shareholder friendly moves not only instill investor confidence but also positively impact earnings per share.

Zacks Rank and Other Stocks to Consider

CoreLogic currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are Republic Services RSG, S&P Global SPGI and TransUnion TRU, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected-earnings per share (three to five years) growth rate for Republic Services, S&P Global and TransUnion is 7.9%, 10% and 14%, respectively.

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