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Equifax Inc EFX

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Elevated Mortgage and Unemployment Claims Processing Volumes Drive Equifax Beat

Rajiv Bhatia Equity Analyst

Analyst Note

| Rajiv Bhatia |

Wide-moat Equifax reported a strong quarter with revenue and earnings topping consensus estimates. Revenue increased 22% and finished 6% ahead of the FactSet consensus; adjusted earnings per share of $1.82 also handily beat the consensus of $1.60. U.S. Information Solutions (USIS) mortgage and Workforce Solutions drove the revenue growth as low interest rates drove mortgage activity and the firm’s unemployment claims processing business is seeing elevated volumes. Mortgage volumes are difficult to predict and remain an important wildcard in our view as mortgage drives both the core credit bureau and Workforce Solutions. We plan on maintaining our fair value estimate of $168.

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Company Profile

Business Description

Along with Experian and TransUnion, Equifax is one of the leading credit bureaus in the United States. Equifax’s credit reports provide credit histories on millions of consumers, and the firm's services are critical to lenders’ credit decisions. In addition, about a third of the firm’s revenue comes from workforce solutions, which provides income verification and employer human resources services. Equifax generates over 20% of its revenue from outside the United States.

Contact
1550 Peachtree Street N.W.
Atlanta, GA, 30309
T +1 404 885-8000
Sector Industrials
Industry Consulting Services
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Classic Growth
Employees 11,200

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