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Why Is Equifax (EFX) Down 2.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Equifax (EFX - Free Report) . Shares have lost about 2.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equifax due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Adjusted earnings of $1.84 per share beat the Zacks Consensus Estimate by 1.7% but declined 8% on a year-over-year basis. The reported figure exceeded the guided range of $1.72-$1.82.
Revenues of $1.25 billion outpaced the consensus estimate by 0.4% and improved 12% year over year on a reported basis as well as on a local-currency basis. The reported figure meets the higher end of the guided range of $1.23-$1.25 billion.
The company reported its eighth consecutive quarter of solid double-digit revenue growth. The uptick was driven by strength across the company’s Workforce Solutions, U.S. Information Solutions (“USIS”) non-mortgage market and International revenues. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth.
Segmental Revenues
Revenues in the USIS division came in at $434 million, flat with the year-ago quarter. Within the division, Online Information Solutions’ revenues of $313.9 million were flat year over year. Mortgage Solutions’ revenues of $40.7 million declined 19% year over year. Financial Marketing Services’ revenues came in at $79.4 million, up 14% year over year.
Revenues in the International division totaled $287.6 million, up 6% year over year on a reported basis as well as on a local-currency basis. Asia Pacific revenues of $88.4 million grew 9% year over year on a reported basis as well as on a local-currency basis. Revenues from Europe came in at $90.3 million, flat year over year on a reported basis as well as on a local-currency basis. Latin Americarevenues of $45.3 million grew 6% year over year on a reported basis and 15% on a local-currency basis. Canadarevenues of $63.6 million improved 9% year over year on a reported basis and 6% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $531.6 million, up 29% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $426.6 million were up 29% year over year. Employer Services revenues of $105 million grew 28% year over year.
Operating Results
Adjusted EBITDA in the fourth quarter of 2021 came in at $403.4 million, down 4.5% from the year-ago quarter. Adjusted EBITDA margin fell to 32.2% from 37.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 39.4% compared with 41.6% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 29.9% compared with 33.2% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.4% compared with 55.8% a year ago.
Balance Sheet and Cash Flow
Equifax exited fourth-quarter 2021 with cash and cash equivalents of $224.7 million compared with $2.03 billion at the end of the prior quarter. Long-term debt was $4.47 billion compared with $4.96 billion at the end of the prior quarter.
The company generated $385.3 million of cash from operating activities while capex was $136.1 million. Also, Equifax paid out dividends of $47.4 million to shareholders in the reported quarter.
First-Quarter and Full-Year 2022 Guidance
For the first quarter of 2022, Equifax expects revenues between $1.32 and $1.34 billion. Adjusted EPS is anticipated in the range of $2.08-$2.18.
For full-year 2022, revenues are expected between $5.25 and $5.35 billion. Adjusted EPS is anticipated in the range of $8.50-$8.80.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Equifax has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Equifax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Equifax (EFX) Down 2.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Equifax (EFX - Free Report) . Shares have lost about 2.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Equifax due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Equifax Tops Q4 Earnings & Revenue Estimates
Equifax reported better-than-expected fourth-quarter 2021 results.
Adjusted earnings of $1.84 per share beat the Zacks Consensus Estimate by 1.7% but declined 8% on a year-over-year basis. The reported figure exceeded the guided range of $1.72-$1.82.
Revenues of $1.25 billion outpaced the consensus estimate by 0.4% and improved 12% year over year on a reported basis as well as on a local-currency basis. The reported figure meets the higher end of the guided range of $1.23-$1.25 billion.
The company reported its eighth consecutive quarter of solid double-digit revenue growth. The uptick was driven by strength across the company’s Workforce Solutions, U.S. Information Solutions (“USIS”) non-mortgage market and International revenues. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth.
Segmental Revenues
Revenues in the USIS division came in at $434 million, flat with the year-ago quarter. Within the division, Online Information Solutions’ revenues of $313.9 million were flat year over year. Mortgage Solutions’ revenues of $40.7 million declined 19% year over year. Financial Marketing Services’ revenues came in at $79.4 million, up 14% year over year.
Revenues in the International division totaled $287.6 million, up 6% year over year on a reported basis as well as on a local-currency basis. Asia Pacific revenues of $88.4 million grew 9% year over year on a reported basis as well as on a local-currency basis. Revenues from Europe came in at $90.3 million, flat year over year on a reported basis as well as on a local-currency basis. Latin Americarevenues of $45.3 million grew 6% year over year on a reported basis and 15% on a local-currency basis. Canadarevenues of $63.6 million improved 9% year over year on a reported basis and 6% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $531.6 million, up 29% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $426.6 million were up 29% year over year. Employer Services revenues of $105 million grew 28% year over year.
Operating Results
Adjusted EBITDA in the fourth quarter of 2021 came in at $403.4 million, down 4.5% from the year-ago quarter. Adjusted EBITDA margin fell to 32.2% from 37.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 39.4% compared with 41.6% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 29.9% compared with 33.2% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.4% compared with 55.8% a year ago.
Balance Sheet and Cash Flow
Equifax exited fourth-quarter 2021 with cash and cash equivalents of $224.7 million compared with $2.03 billion at the end of the prior quarter. Long-term debt was $4.47 billion compared with $4.96 billion at the end of the prior quarter.
The company generated $385.3 million of cash from operating activities while capex was $136.1 million. Also, Equifax paid out dividends of $47.4 million to shareholders in the reported quarter.
First-Quarter and Full-Year 2022 Guidance
For the first quarter of 2022, Equifax expects revenues between $1.32 and $1.34 billion. Adjusted EPS is anticipated in the range of $2.08-$2.18.
For full-year 2022, revenues are expected between $5.25 and $5.35 billion. Adjusted EPS is anticipated in the range of $8.50-$8.80.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Equifax has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Equifax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.