Why Thomson Reuters Stock Plummeted by Almost 10% Today
Investors felt it missed the mark with third-quarter earnings.
On a tumultuous Tuesday, Thomson Reuters (TRI) experienced a significant 10% drop in its stock price following the release of its third-quarter performance. The company reported a 10% increase in revenue to $1.83 billion year-over-year, but failed to meet analysts' expectations. Net income, calculated using non-GAAP figures, also grew by a similar margin to $350 million, or $0.81 per share.
However, this growth did not satisfy investors, leading to a substantial sell-off of the stock. Thomson Reuters' top-line growth was attributed to strong performance in its legal, corporate, and tax, audit, and accounting segments, which collectively accounted for 88% of the company's revenue in the quarter. The company revised its 2026 revenue growth forecast to 9.5%, up from the previous estimate of 8%, driven by the anticipated success of these customer segments.
Despite the quarter's positive aspects, Thomson Reuters remains expensive, with a PEG ratio of nearly 4.7, indicating that investors might have anticipated more impressive results than the company delivered.
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