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Equifax Inc EFX

Morningstar Rating
$270.98 −2.61 (0.95%)
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Company Report

Equifax Earnings: Non-Mortgage Workforce Solutions Shining, Company’s Mortgage Outlook Conservative

Equifax reported a decent finish to 2023. Fourth-quarter revenue of $1.33 billion, adjusted EBITDA of $447 million, and adjusted EPS of $1.81 finished a bit above the FactSet consensus estimates of $1.31 billion, $445 million, and $1.74, respectively. Equifax’s 2024 outlook of $5.67 billion-$5.77 billion in revenue and $7.20-$7.50 adjusted EPS compares unfavorably with the respective consensus estimates of $5.75 billion and $8.13. However, we note that the firm’s outlook assumes a 16% decline in mortgage credit inquiries while the Mortgage Bankers Association, or MBA, expects a 17% increase in mortgage loan originations. Equifax does not assume mortgage rates will decline in 2024, while the MBA expects a decline of over 1 percentage point. In addition, we believe the firm’s mortgage business has high incremental margins, meaning that changes in mortgage volumes disproportionally impact profits. Overall, we will maintain our wide moat rating and $270 fair value estimate on Equifax’s shares.

Price vs Fair Value

EFX is trading at a 0% premium.
Price
$270.98
Fair Value
$359.00
Uncertainty
High
1-Star Price
$338.90
5-Star Price
$511.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The workforce solutions segment is a fast-growing business built on unique data and can contribute meaningfully to earnings growth. Equifax can increase use cases in nonmortgage applications for income verification.

Bears

Mortgage volumes drive Equifax's core credit bureau business and its workforce solutions segment, but they are difficult to predict, given their sensitivity to mortgage rates and homebuying activity. In addition, higher rates will weigh on the purchasing and refinancing mortgage market.

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News

Trading Information

Previous Close Price
$273.59
Day Range
$267.82272.30
52-Week Range
$159.95275.10
Bid/Ask
$269.66 / $271.51
Market Cap
$33.59 Bil
Volume/Avg
838,026 / 937,385

Key Statistics

Price/Earnings (Normalized)
40.39
Price/Sales
6.38
Dividend Yield (Trailing)
0.58%
Dividend Yield (Forward)
0.58%
Total Yield
0.58%

Company Profile

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.
Sector
Industrials
Industry
Consulting Services
Stock Style Box
Mid Growth
Total Number of Employees
14,900

Competitors

Valuation

Metric
EFX
MCO
TRU
Price/Earnings (Normalized)
40.3940.9923.36
Price/Book Value
7.3620.963.80
Price/Sales
6.3811.883.97
Price/Cash Flow
28.9632.1121.16
Price/Earnings
EFX
MCO
TRU

Financial Strength

Metric
EFX
MCO
TRU
Quick Ratio
0.561.611.20
Current Ratio
0.671.781.47
Interest Coverage
3.976.650.42
Quick Ratio
EFX
MCO
TRU

Profitability

Metric
EFX
MCO
TRU
Return on Assets (Normalized)
7.01%11.93%5.75%
Return on Equity (Normalized)
19.73%61.25%15.83%
Return on Invested Capital (Normalized)
10.09%17.97%8.80%
Return on Assets
EFX
MCO
TRU
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Name
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Economic Moat
Market Cap
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TRU
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BVRDF
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