Equifax Inc. (EFX) | Investment Case

1. Company Snapshot

1.a. Company Description

Equifax Inc.provides information solutions and human resources business process automation outsourcing services for businesses, governments, and consumers.The company operates through three segments: Workforce Solutions, U.S. Information Solutions (USIS), and International.

The Workforce Solutions segment offers employment, income, criminal history, and social security number verification services, as well as payroll-based transaction, employment tax management, and identity theft protection products.The USIS segment provides consumer and commercial information services, such as credit information and credit scoring, credit modeling and portfolio analytics, locate, fraud detection and prevention, identity verification, and other consulting; mortgage services; financial marketing services; identity management services; credit monitoring products; and online information, decisioning technology solutions, as well as portfolio management, mortgage reporting, and consumer credit information services.The International segment offers information service products, which include consumer and commercial services, such as credit and financial information, and credit scoring and modeling; and credit and other marketing products and services, as well as offers information, technology, and other services to support debt collections and recovery management.

The company serves customers in financial services, mortgage, employers, consumer, commercial, telecommunication, retail, automotive, utility, brokerage, healthcare, and insurance industries, as well as state, federal, and local governments.It operates in the United States, Canada, Australia, New Zealand, India, the United Kingdom, Spain, Portugal, Argentina, Chile, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru, Uruguay, Brazil, the Republic of Ireland, Russia, Cambodia, Malaysia, Singapore, and the United Arab Emirates.The company was founded in 1899 and is headquartered in Atlanta, Georgia.

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1.b. Last Insights on EFX

Equifax's recent performance has been impacted by stretched valuation, with a forward P/E of 31. Despite substantial execution, high-interest-sensitive business segments are slowing down. The company's investments in AI and cloud are capital-intensive, putting pressure on the bottom line. Moreover, uncertainty in the broader market could drag down Equifax's stock. Although Q3 earnings and revenues surpassed estimates, increasing medical care costs and slowing growth in certain segments are concerns. (Source: "Equifax: Substantial Execution, But Valuation Is Stretched - A Hold")

1.c. Company Highlights

Last Price	211.51
Change Percentage	0.11%
Open	211.62
Previous Close	211.28
Market Cap ( Millions)	26185
Volume	2033528
Year High	281.07
Year Low	199.98
M A 50	221.39
M A 200	243.56

FCF Yield	3.82%
Dividend Yield	0.89%
ROE	13.29%
Debt / Equity	97.46%
Net Debt / EBIDTA	254.88%
Price To Book	5.27
Price Earnings Ratio	39.53
Price To FCF	26.2
Price To sales	4.41
EV / EBITDA	16.98

2. Equifax's Q3 Earnings: A Strong Performance Driven by USIS and EWS Growth

Equifax reported a strong third quarter with revenue of $1.54 billion, up 7% in constant currency and reported dollars, $25 million above the midpoint of the July guidance. The revenue outperformance was driven by USIS mortgage and EWS and USIS non-mortgage. Adjusted EPS of $2.04 per share was $0.12 above the midpoint of the July guidance, beating analyst estimates of $1.94. The company incurred a restructuring charge of $44 million for cost reduction actions, expected to deliver ongoing savings of $30 million per year by late 2026.

Publication Date: Nov -25

                                    📋 Highlights
                                    Revenue Growth Outperforms Guidance:
                                                Q3 revenue hits $1.54 billion, +7% YoY, exceeding July guidance by $25 million, driven by 26% USIS mortgage growth and 5% EWS expansion.
Adjusted EPS Surpasses Expectations:
                                                Earnings at $2.04/share, $0.12 above guidance midpoint, supported by USIS and EWS performance despite $44 million restructuring costs.
VantageScore 4.0 Drives Market Share Gains:
                                                Pricing $4.50 vs. FICO’s $10 sparks $100–200M savings for consumers, with $200M annual profit boost for Equifax and 16% Vitality Index record.
Full-Year Guidance Raised:
                                                Revenue increased by $40M, EPS by $0.12; free cash flow now projected at $950–975 million, up from $900 million, with 4Q EPS guidance at $1.98–$2.08.
International Expansion Accelerates:
                                                7% constant-currency growth in Q3, led by Canada (+11%) and Latin America (+9%), with EFX.AI and cloud tech enabling 150+ new product innovations in 2025.

                                

Segment Performance

Revenue growth was driven by Workforce Solutions (EWS) up 5%, USIS up 11%, and International up 7%. EWS revenue growth was driven by Government performance, while USIS revenue growth was led by mortgage revenue. International revenue grew 7% in constant currency, with broad-based growth across regions, including Canada (11%), Latin America (9%), Europe (4%), and Asia Pacific (4%).

VantageScore Traction and Mortgage Business

Equifax announced an expansion of its Vantage 4.0 mortgage credit score offerings in response to FICO's price actions, aiming to drive competition in the mortgage credit scoring market and deliver over $100 million to $200 million of savings to mortgage customers and consumers. The company expects an incremental $200 million of annual profit from the conversion to VantageScore 4.0. The mortgage business had a 26% growth in USIS, driven by the FICO price increase and growth in prequal and pre-approval products.

Valuation and Growth Prospects

With a P/E Ratio of 39.18 and an EV/EBITDA of 16.85, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 8.2%. The company's Vitality Index, which measures revenue growth from new products, was 16% in the quarter, driven by products such as I-9 virtual and the TWN indicator. Equifax is raising its guidance for the Vitality Index to 13%. The company's strong performance and growth prospects make it an attractive investment opportunity.

Government Vertical and AI Products

The company's Government vertical is seeing opportunities from the OB3 bill and focus on improper payments. Equifax's solutions, such as the TWN indicator, can help reduce error rates in SNAP. The company is also planning to monetize its AI products through Ignite AI Advisor and other solutions, which are expected to drive higher predictability and ROI for customers.

3. NewsRoom

Here's Why You Should Retain Equifax Stock in Your Portfolio Now

Dec -04

Source: zacks.com

Equifax Survey Shows Government Caseworkers Optimistic on Efficiency, Identify Automation as a Key Priority for 2026

Dec -04

Source: prnewswire.com

Breakfast News: SNOW's Growth Outlook Cools

Dec -04

Source: fool.com

Equifax, Inc. (NYSE:EFX) Given Consensus Rating of “Moderate Buy” by Brokerages

Dec -04

Source: defenseworld.net

Despite Rate Cuts and Business Optimism, Credit Challenges Persist for Small Businesses

Dec -02

Source: globenewswire.com

Blueshift Asset Management LLC Reduces Stake in Equifax, Inc. $EFX

Dec -02

Source: defenseworld.net

Equifax Announces Participation in December Investor Conferences

Dec -01

Source: prnewswire.com

Credit Card Balances Expected to Peak in December with the Holiday Season

Nov -26

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.69%)

6. Segments

Workforce Solutions

Expected Growth: 8.5%

Growing demand for human capital management services, increasing adoption of analytics and compliance solutions, and expansion into new markets drive Equifax's Workforce Solutions' growth.

U.S. Information Solutions

Expected Growth: 7.8%

Increasing demand for credit and identity verification, coupled with the need for businesses to mitigate fraud and make informed decisions, drives growth in Equifax's U.S. Information Solutions segment.

International

Expected Growth: 6.1%

Equifax’s International segment will benefit from increasing demand for credit information and identity verification, driven by economic growth, urbanization, and growing e-commerce adoption in Latin America and Asia Pacific, as well as regulatory requirements in Europe and Canada.

7. Detailed Products

Equifax Credit Reports

Comprehensive credit reports providing detailed information on an individual's credit history, including payment history, credit inquiries, and public records.

Identity Verification

Advanced identity verification solutions to help prevent fraud and ensure compliance with regulatory requirements.

Credit Scoring

Predictive credit scoring models that provide a numerical representation of an individual's creditworthiness.

Fraud Detection

Advanced fraud detection solutions that identify and prevent fraudulent activity in real-time.

Employment Verification

Comprehensive employment verification solutions that provide accurate and up-to-date employment information.

Income Verification

Accurate and reliable income verification solutions that provide detailed information on an individual's income.

Tenant Screening

Comprehensive tenant screening solutions that provide detailed information on an individual's rental history and creditworthiness.

Business Credit Reports

Comprehensive business credit reports providing detailed information on a company's credit history and financial stability.

Marketing Analytics

Advanced marketing analytics solutions that provide detailed insights into customer behavior and preferences.

8. Equifax Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Equifax Inc. is medium due to the presence of alternative credit reporting agencies, but the company's strong brand recognition and established relationships with customers mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of negotiating power of individual consumers and the complexity of credit reporting services, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the limited number of suppliers of credit data and the company's strong bargaining power in negotiating contracts with these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including the need for significant capital investment, regulatory approvals, and establishment of a large database of credit information.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors, such as Experian and TransUnion, and the ongoing competition for market share in the credit reporting industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	55.74%
Debt Cost	5.50%
Equity Weight	44.26%
Equity Cost	11.66%
WACC	8.23%
Leverage	125.96%

11. Quality Control: Equifax Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

L3Harris

A-Score: 6.2/10

Value: 3.0

Growth: 5.7

Quality: 6.8

Yield: 4.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

AMETEK

A-Score: 5.4/10

Value: 1.7

Growth: 6.1

Quality: 8.1

Yield: 1.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

UPS

A-Score: 5.2/10

Value: 5.0

Growth: 4.2

Quality: 4.9

Yield: 9.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

Verisk Analytics

A-Score: 4.9/10

Value: 1.6

Growth: 6.2

Quality: 7.3

Yield: 1.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

Ingersoll Rand

A-Score: 4.3/10

Value: 1.8

Growth: 7.6

Quality: 6.6

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

Equifax

A-Score: 4.1/10

Value: 2.0

Growth: 5.8

Quality: 6.1

Yield: 1.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

10.42%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.23%

Equifax Inc. - US2944291051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on EFX

1.c. Company Highlights

Expensive

Average Quality

Medium Volatility

Earnings Beats

Average Yield

Stable Momentum

Strong Momentum

Revenues Miss

Revenues Beats

Earnings Miss

2. Equifax's Q3 Earnings: A Strong Performance Driven by USIS and EWS Growth

Segment Performance

VantageScore Traction and Mortgage Business

Valuation and Growth Prospects

Government Vertical and AI Products

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.69%)

6. Segments

Workforce Solutions

Expected Growth: 8.5%

U.S. Information Solutions

Expected Growth: 7.8%

International

Expected Growth: 6.1%

7. Detailed Products

Equifax Credit Reports

Identity Verification

Credit Scoring

Fraud Detection

Employment Verification

Income Verification

Tenant Screening

Business Credit Reports

Marketing Analytics

8. Equifax Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Equifax Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

211.51$

Current Price

211.51$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA