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Equifax (EFX)
NYSE:EFX
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Equifax
(NYSE:EFX)63Neutral
Positive Factors
Capital Return
The company is expected to meaningfully step up capital return through a dividend increase and/or buyback program which should be a positive catalyst for the shares.
Earnings Growth
Equifax is entering a period of strong multi-year EPS growth, with valuation considered attractive when normalized for the mortgage cycle.
Negative Factors
Market Environment
The current macro/rate environment paints a difficult path for mortgage in 2025.
Equifax (EFX) vs. S&P 500 (SPY)
Market Cap
$31.00B
Dividend Yield0.61%
Average Volume (3M)1.16M
Price to Earnings (P/E)52.7
Beta (1Y)1.50
Revenue Growth7.90%
EPS Growth10.00%
CountryUS
Employees14,700
SectorIndustrials
Sector Strength66
IndustryCorporate Services
Share Statistics
EPS (TTM)4.83
Shares Outstanding124,023,834
10 Day Avg. Volume1,101,123
30 Day Avg. Volume1,161,096
Financial Highlights & Ratios
PEG Ratio5.27
Price to Book (P/B)N/A
Price to Sales (P/S)5.56
Price to Cash Flow (P/CF)24.30
P/FCF Ratio38.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$299.86Price Target Upside19.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
Equifax Business Overview & Revenue Model
Company DescriptionEquifax Inc. (EFX) is a global data, analytics, and technology company that specializes in providing information solutions to businesses, governments, and consumers. Operating primarily in the financial services, automotive, telecommunications, utilities, and retail sectors, Equifax offers a wide range of services including credit reporting, identity verification, fraud detection, and credit risk scoring. The company's core products and services are designed to help clients make informed decisions by leveraging data insights and analytics.
How the Company Makes MoneyEquifax makes money through a diversified revenue model that includes several key streams. The company's primary source of revenue comes from providing credit information and analytics services to businesses, which includes selling credit reports, credit scores, and other financial data products. Equifax also generates revenue through subscription-based services for identity verification and fraud prevention solutions. Additionally, the company earns income from its workforce solutions division, which offers employment and income verification services. Significant partnerships with financial institutions, government agencies, and other enterprises amplify their data offerings and expand their market reach. The company further benefits from its global presence, allowing it to capture revenue from various international markets.
Equifax Financial Statement Overview
Summary
Equifax exhibits strong financial health with robust revenue growth and improving profitability. While the company has managed to leverage its assets effectively, high debt levels remain a concern. Cash flow management is solid, though past volatility suggests a need for ongoing monitoring. Overall, Equifax's financial trajectory is positive, with significant improvements in key areas.Income Statement
Equifax has demonstrated strong revenue growth with a consistent increase from $3.51 billion in 2019 to $5.68 billion in 2024. The gross profit margin has improved, reaching 100% in 2024, indicating an efficient cost structure. Net income has grown significantly, leading to an improved net profit margin. EBIT and EBITDA margins have remained strong, highlighting profitability. However, the low gross profit in earlier years suggests past inefficiencies that have been addressed.85
Very Positive
Balance Sheet
Equifax's debt-to-equity ratio has improved, but remains relatively high, reflecting significant leverage that could pose risks if not managed carefully. The return on equity has increased due to rising net income, indicating efficient use of equity. The equity ratio has stabilized, suggesting a balanced asset financing approach. However, the high debt levels warrant caution.75
Positive
Cash Flow
Free cash flow has shown substantial growth, enhancing the company's ability to reinvest and pay down debt. Operating cash flow consistently exceeds net income, indicating strong cash generation capabilities. The free cash flow to net income ratio has improved, reflecting effective cash management. Despite improvements, cash flow fluctuations in prior years highlight the need for sustained stability.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.68B | 5.27B | 5.12B | 4.92B | 4.13B | Gross Profit |
| 3.16B | 2.93B | 2.94B | 2.94B | 2.39B | EBIT |
| 1.04B | 933.60M | 1.06B | 1.14B | 676.60M | EBITDA |
| 1.72B | 1.58B | 1.67B | 1.58B | 1.22B | Net Income Common Stockholders |
| 604.10M | 545.30M | 696.20M | 744.20M | 520.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 169.90M | 216.80M | 285.20M | 224.70M | 1.68B | Total Assets |
| 11.76B | 12.28B | 11.55B | 11.04B | 9.61B | Total Debt |
| 5.01B | 5.71B | 5.79B | 5.29B | 4.38B | Net Debt |
| 4.84B | 5.49B | 5.50B | 5.07B | 2.69B | Total Liabilities |
| 6.84B | 7.59B | 7.57B | 7.44B | 6.40B | Stockholders Equity |
| 4.80B | 4.53B | 3.96B | 3.58B | 3.17B |
| Cash Flow | Free Cash Flow | |||
| 813.00M | 515.50M | 132.60M | 865.80M | 524.90M | Operating Cash Flow |
| 1.32B | 1.12B | 757.10M | 1.33B | 946.20M | Investing Cash Flow |
| -511.50M | -878.20M | -959.50M | -3.40B | -492.70M | Financing Cash Flow |
| -846.40M | -306.20M | 273.70M | 628.90M | 810.80M |
Equifax Technical Analysis
Neutral
249.92
Price Trends
254.72
Negative
259.83
Negative
264.61
Negative
Market Momentum
-2.46
Negative
49.99
Neutral
77.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EFX, the sentiment is Neutral. The current price of 249.92 is above the 20-day moving average (MA) of 246.31, below the 50-day MA of 254.72, and below the 200-day MA of 264.61, indicating a neutral trend. The MACD of -2.46 indicates Negative momentum. The RSI at 49.99 is Neutral, neither overbought nor oversold. The STOCH value of 77.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EFX.
Equifax Risk Analysis
Equifax disclosed 30 risk factors in its most recent earnings report. Equifax reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Equifax Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $16.87B | 59.80 | 6.91% | 0.50% | 9.20% | ― | |
64 Neutral | $42.15B | 44.79 | 463.98% | 0.52% | 7.47% | 59.46% | |
64 Neutral | $42.35B | 35.87 | 26.60% | 1.19% | 7.93% | 14.86% | |
63 Neutral | $31.00B | 52.66 | 12.95% | 0.61% | 7.90% | 10.00% | |
63 Neutral | $44.79B | 84.17 | -47.82% | ― | 14.49% | 21.85% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
61 Neutral | $3.71B | ― | -0.85% | 2.27% | 2.93% | 39.49% |
* Industrials Sector Average
Performance Comparison
EFX
Equifax
249.92
-11.64
-4.45%
FICO
Fair Isaac
1,695.35
412.67
32.17%
VRSK
Verisk Analytics
298.00
61.93
26.23%
TRU
TransUnion
80.86
1.45
1.83%
EXPGY
Experian
46.03
3.70
8.74%
DNB
Dun & Bradstreet Holdings
8.40
-1.85
-18.05%
Equifax Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -7.36% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Neutral
Equifax demonstrated strong financial performance and significant progress in cloud transformation. However, challenges in the U.S. mortgage and hiring markets, currency headwinds, and lower expectations for growth in certain segments temper the outlook for 2025.Highlights
Strong Financial Performance in 2024
Equifax reported a revenue increase of almost 8% in 2024, with adjusted EPS up over 8.5%. Free cash flow was $813 million, up 58%, and debt leverage was reduced to under three turns.
Significant Progress in Cloud Transformation
Equifax completed consumer cloud customer migrations in several countries, achieving close to 85% of revenue in the new Equifax cloud, resulting in $300 million in spending reductions.
New Strategic Partnerships and Product Growth
The EWS team signed 15 new strategic partnerships in 2024, including Workday, contributing to a record year with 188 million active records. The Vitality Index was at 12%, above the 10% goal, generating about $650 million in new product revenue.
First Quarter with Adjusted EBITDA Over $500 Million
Equifax achieved a milestone with adjusted EBITDA over $500 million in Q4 2024, a first in the company's history.
International Revenue Growth
International revenue was up 11% in constant currency, driven by strong growth in Latin America, Canada, and Australia.
Lowlights
Weakness in U.S. Mortgage and Hiring Markets
The U.S. mortgage market declined significantly, affecting revenue expectations. Mortgage and hiring markets are expected to decline by 12% and 8% respectively in 2025.
Impact of Strengthening U.S. Dollar
Revenue was negatively impacted by $12 million in Q4 2024 due to a stronger dollar, with an expected negative impact of $75 million in 2025.
EWS Margin Contraction
Workforce Solutions adjusted EBITDA margins are expected to decline due to lower revenue growth and costs related to onboarding new TWN partners.
Decline in Non-Mortgage Revenue
USIS non-mortgage revenue grew only 2.5% in Q4 2024, slightly below guidance, with declines in identity and fraud sectors.
Government Revenue Challenges
Government revenue growth faced tough comparisons and adjustments in state funding practices, impacting performance in the first half of 2025.
Company Guidance
During the Equifax Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the first quarter and full year 2025. The guidance included expectations for 2025 revenue of approximately $5.95 billion, representing a 4.7% increase on a reported basis, with constant currency revenue growth of about 6%. The company predicted adjusted EBITDA to rise by about 5% to over $1.9 billion, with a margin expansion of approximately 25 basis points. Adjusted EPS was expected to reach $7.45 per share, up 2% from the previous year. Equifax also projected free cash flow to be approximately $900 million, achieving a cash conversion rate near their long-term target of 95%. The guidance accounted for anticipated declines in U.S. mortgage and hiring markets, forecasting a 12% drop in mortgage credit inquiries and an 8% reduction in U.S. hiring compared to 2024. Despite these challenges, Equifax aimed to leverage its cloud transformation and AI capabilities to drive growth and innovation, with plans to roll out new products and enhance its service offerings. The company also indicated intentions to increase shareholder returns through dividends and a multiyear share repurchase program in 2025.Equifax Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Equifax CEO Mark Begor Continues Leadership Beyond 2025
Positive
Nov 8, 2024
Equifax Inc. announced that CEO Mark W. Begor will continue his leadership beyond 2025, highlighting his successful transformation of the company’s technology and expansion of its data assets. Under Begor’s leadership, Equifax has seen a 50% revenue growth and a significant rise in market capitalization. With a focus on leveraging cloud technology and innovation, Equifax aims to drive growth and enhance shareholder returns.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.