Thomson Reuters Corp
NYSE:TRI
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Intrinsic Value
The intrinsic value of one TRI stock under the Base Case scenario is 83.352 USD. Compared to the current market price of 173.285 USD, Thomson Reuters Corp is Overvalued by 52%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
Valuation Backtest
Thomson Reuters Corp
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Fundamental Analysis
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Thomson Reuters Corporation has established itself as a cornerstone in the global information services industry, offering a rich tapestry of data, insights, and solutions that empower professionals across multiple sectors, including law, finance, and journalism. At its core, the company is renowned for its robust portfolio of products, such as Westlaw for legal research and Eikon for financial professionals, which deliver actionable intelligence in real-time. This focus on creating high-value content, coupled with its commitment to innovation, positions Thomson Reuters not just as a service provider, but as an essential partner to its users, navigating the complexities of their respective fi...
Thomson Reuters Corporation has established itself as a cornerstone in the global information services industry, offering a rich tapestry of data, insights, and solutions that empower professionals across multiple sectors, including law, finance, and journalism. At its core, the company is renowned for its robust portfolio of products, such as Westlaw for legal research and Eikon for financial professionals, which deliver actionable intelligence in real-time. This focus on creating high-value content, coupled with its commitment to innovation, positions Thomson Reuters not just as a service provider, but as an essential partner to its users, navigating the complexities of their respective fields.
As an investor, it’s crucial to recognize that Thomson Reuters has successfully transitioned from a traditional media enterprise into a technology-driven powerhouse, resulting in a diverse revenue stream that includes both subscription services and transactional offerings. The company's strategic investment in technology, particularly in artificial intelligence and machine learning, paves the way for enhanced client outcomes and operational efficiency. Additionally, a strong emphasis on recurring revenue through long-term client contracts underpins its stability, making it an attractive prospect for investors seeking growth in a landscape rapidly evolving through digital transformation. With a commitment to sustainable business practices and a proven track record of adaptation, Thomson Reuters stands out as a prudent investment choice in the information services market.
Thomson Reuters Corporation operates through various core business segments, primarily focused on providing information solutions and services to professionals in different sectors. The following are the primary segments:
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Legal:
- This segment offers legal professionals a wide range of information and tools to assist in their work. Key products include Westlaw, a premier legal research service, and various legal analytics solutions. This segment serves law firms, corporate legal departments, and government agencies.
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Tax & Accounting:
- Thomson Reuters provides software and solutions to tax professionals and accountants. This includes tax compliance software, accounting platforms, and tools for managing billing, workflow, and financial reporting. The segment serves CPA firms, tax professionals, and corporations.
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Reuters News:
- Founded on its legacy of journalism, this segment delivers real-time news and information to financial professionals, corporations, and governments. It includes the Reuters news agency, offering breaking news, analysis, and in-depth reporting across various sectors.
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Global Markets:
- This segment focuses on financial services, providing data, analytics, and trading solutions to investment professionals. It serves investment banks, asset managers, and private equity firms, offering products like Eikon for financial analysis and data management.
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Corporate/Other:
- This segment encompasses various corporate activities and initiatives, including technology and platform solutions that support all segments, along with corporate functions and marketing.
Thomson Reuters is known for its integration of cutting-edge technology, such as artificial intelligence and machine learning, across these segments, enhancing the efficiency and effectiveness of their offerings. This diversified portfolio allows the company to maintain a strong position in the information services industry.
Thomson Reuters Corp has several unique competitive advantages that distinguish it from its rivals in the information services and media sectors. Here are some key advantages:
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Comprehensive Data and Content: Thomson Reuters has a vast repository of universal data, legal databases, financial information, and news coverage. This depth and breadth of content allow professionals in legal, financial, and media sectors to access comprehensive insights that competitors may not be able to match.
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Brand Reputation and Trust: Established as a reputable source of information, Thomson Reuters has built strong brand equity over decades. Clients trust their data for critical decision-making processes, particularly in legal and financial services, creating a competitive barrier.
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Integrated Solutions and Technology: Thomson Reuters offers integrated solutions combining data, analytics, and technology. Products like Westlaw for legal research and Eikon for financial analysis streamline workflows, provide analytics, and help professionals make informed decisions efficiently.
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Global Reach: With a presence in over 100 countries, Thomson Reuters leverages a diverse, international market. This global footprint allows them to offer localized content and solutions while also benefiting from economies of scale.
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Focus on Compliance and Risk Management: Their extensive tools and solutions tailored for compliance, risk management, and regulatory reporting are essential for organizations facing increasingly complex regulatory environments. This focus positions them well in industries that prioritize compliance.
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Innovative Technology Adoption: Thomson Reuters has invested significantly in technology, especially in artificial intelligence and machine learning. This investment allows them to enhance their product offerings with predictive analytics and advanced data processing capabilities.
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Strong Client Relationships: The company’s dedication to building strong, long-term relationships with its clients helps in retaining clients and reducing churn, ensuring loyal customers who rely on Thomson Reuters for ongoing services.
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Expertise and Insight: The company’s teams comprise industry experts who provide insights and analyses that aid clients in understanding market trends and implications. This expertise gives clients confidence in their business decisions and contributes to the value of the Thomson Reuters brand.
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Recurring Revenue Model: Thomson Reuters benefits from a subscription-based revenue model for many of its products, leading to predictable and stable cash flows. This model fosters strong customer retention and ongoing engagement with their services.
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Strategic Partnerships and Acquisitions: Through strategic partnerships and acquisitions, Thomson Reuters has enhanced its product offerings and market reach, allowing it to stay competitive and innovative in rapidly changing industries.
These competitive advantages collectively help Thomson Reuters maintain its position as a leading provider of information and solutions across various sectors, and they are critical in differentiating the company from its competitors.
Thomson Reuters Corp, a key player in the financial services and information industry, faces several risks and challenges in the near future, including:
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Market Competition: The landscape of information services and financial data is highly competitive, with rivals like Bloomberg, S&P Global, and various fintech startups. Increased competition may erode market share or pressure profit margins.
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Technological Advancements: Rapid advancements in technology, including artificial intelligence and machine learning, require continuous investment. Failing to innovate or adapt to new technologies may render Thomson Reuters less competitive.
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Regulatory Changes: The company operates in highly regulated sectors. Changes in regulations, particularly around data privacy (GDPR, CCPA), intellectual property laws, and financial market regulations, could impose additional operational burdens and costs.
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Economic Downturns: Economic uncertainties, such as recessions or changes in fiscal policy, may affect customer spending in core segments like legal and financial services. Companies often reduce spending on information services during downturns.
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Cybersecurity Threats: As a provider of critical financial and legal information, Thomson Reuters is a potential target for cyberattacks. Breaches could lead to data loss, reputational damage, and legal liabilities.
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Global Operations: Operating internationally exposes Thomson Reuters to geopolitical risks, currency fluctuations, and varying economic conditions, which can impact profitability and operational stability.
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Dependence on Subscription Revenue: A significant portion of Thomson Reuters' revenue comes from subscriptions. Changes in customer needs, competition offering better alternatives, or market saturation may threaten this model.
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Talent Acquisition and Retention: Securing and retaining top talent in a competitive job market, especially in tech roles, is crucial for innovation and operational effectiveness. Difficulty in attracting skilled employees can hinder growth.
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Shift to Digital Content: With content consumption moving rapidly online, Thomson Reuters needs to continually enhance its digital offerings. Failing to meet the changing needs of its customers could lead to losing relevance.
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Sustainability and Social Responsibility: Increasing investor and customer focus on corporate social responsibility and sustainability can pose challenges. Thomson Reuters must align its strategies with these emerging expectations or risk facing backlash.
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Integration Challenges: If Thomson Reuters continues to make acquisitions to bolster its offerings, ensuring successful integration and realization of synergies poses a significant challenge.
To navigate these risks, proactive strategy development, investment in technology, and maintaining strong customer relationships will be critical for Thomson Reuters' continued success.
Revenue & Expenses Breakdown
Thomson Reuters Corp
Balance Sheet Decomposition
Thomson Reuters Corp
Current Assets | 3.3B |
Cash & Short-Term Investments | 1.6B |
Receivables | 1.1B |
Other Current Assets | 574m |
Non-Current Assets | 15.1B |
Long-Term Investments | 618m |
PP&E | 436m |
Intangibles | 12B |
Other Non-Current Assets | 2.1B |
Current Liabilities | 3.7B |
Accounts Payable | 222m |
Accrued Liabilities | 654m |
Other Current Liabilities | 2.9B |
Non-Current Liabilities | 3B |
Long-Term Debt | 2.1B |
Other Non-Current Liabilities | 981m |
Earnings Waterfall
Thomson Reuters Corp
Revenue
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7B
USD
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Cost of Revenue
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-311m
USD
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Gross Profit
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6.7B
USD
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Operating Expenses
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-4.8B
USD
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Operating Income
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2B
USD
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Other Expenses
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402m
USD
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Net Income
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2.4B
USD
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Free Cash Flow Analysis
Thomson Reuters Corp
USD | |
Free Cash Flow | USD |
In the second quarter, Thomson Reuters reported a 6% increase in organic revenue, driven by 8% growth in its Big 3 segments. Legal Professionals saw a 7% rise, while Tax & Accounting grew 10%. However, adjusted EBITDA fell 2% to $646 million due to increased investments. Despite this, the company raised its 2024 revenue guidance, now expecting 7% total revenue growth, up from a prior range of 6.5-7%. Organic revenue growth is anticipated at approximately 6.5%. The firm also completed significant divestitures and share repurchases, positioning for future growth.
What is Earnings Call?
TRI Profitability Score
Profitability Due Diligence
Thomson Reuters Corp's profitability score is 65/100. The higher the profitability score, the more profitable the company is.
Score
Thomson Reuters Corp's profitability score is 65/100. The higher the profitability score, the more profitable the company is.
TRI Solvency Score
Solvency Due Diligence
Thomson Reuters Corp's solvency score is 69/100. The higher the solvency score, the more solvent the company is.
Score
Thomson Reuters Corp's solvency score is 69/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
TRI Price Targets Summary
Thomson Reuters Corp
According to Wall Street analysts, the average 1-year price target for TRI is 121.861 USD with a low forecast of 89.938 USD and a high forecast of 147.577 USD.
Shareholder Yield
Current shareholder yield for TRI is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
TRI Price
Thomson Reuters Corp
Average Annual Return | 17.78% |
Standard Deviation of Annual Returns | 20.45% |
Max Drawdown | -35% |
Market Capitalization | 77.9B USD |
Shares Outstanding | 452 827 100 |
Percentage of Shares Shorted | 0.91% |
Profile
Country
Industry
Market Cap
Dividend Yield
Description
Thomson Reuters Corp. engages in the provision of news and information for professional markets. The company is headquartered in Toronto, Ontario and currently employs 24,400 full-time employees. The company went IPO on 2002-06-12. The company operates through five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News and Global Print. Legal Professionals segment serves law firms and governments with research and workflow products, focusing on legal research powered by technologies and integrated legal workflow solutions that combine content, tools and analytics. Corporates segment serves corporate customers, including the global accounting firms, with its offerings across legal, tax, regulatory and compliance. Tax & Accounting Professionals segment serves tax, accounting and audit professionals in accounting firms with research and workflow products, focusing on tax offerings and automating tax workflows. Reuters News segment supplies business, financial, national and international news to professionals via desktop terminals. The Global Print segment provides legal and tax information in print format to customers.
Contact
IPO
Employees
Officers
The intrinsic value of one TRI stock under the Base Case scenario is 83.352 USD.
Compared to the current market price of 173.285 USD, Thomson Reuters Corp is Overvalued by 52%.