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Why Is Equifax (EFX) Down 4.6% 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 4.6% in that time frame, underperforming 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 drivers.
Equifax Tops Q4 Earnings
Equifax reported stellar fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 64 cents from non-recurring items) of $1.52 per share beat the Zacks Consensus Estimate by 2.7% but decreased 17.4% on a year-over-year basis.
Revenues of $1.2 billion beat the Zacks Consensus Estimate by 1.5% but decreased 4.4% year over year on a reported basis and 2% on a local-currency basis.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division were $405.9 million, down 6% from the year-ago quarter’s level. Within the division, Online Information Solutions’ revenues of $308 million were down 2% from the year-ago quarter’s figure. Mortgage Solutions’ revenues of $26 million declined 36% year over year. Financial Marketing Services’ revenues were $71.9 million, down 9% year over year.
Revenues in the International division totaled $283.7 million, down 1% year over year on a reported basis and on a local-currency basis. The Asia Pacific revenues of $84.6 million fell 4% year over year on a reported basis but grew 6% on a local-currency basis.
Revenues from Europe amounted to $81.5 million, down 10% year over year on a reported basis but up 3% on a local-currency basis. Latin America revenues of $53.3 million grew 18% year over year on a reported basis and 31% on a local-currency basis. Canada revenues of $64.3 million were up 1% year over year on a reported basis and 7% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $508.4 million, down 4% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $398.6 million were down 7% year over year. Employer Services’ revenues of $109.8 million were up 5% year over year.
Operating Results
Adjusted EBITDA in the fourth quarter of 2022 totaled $371.1 million, down 8% from the year-ago quarter’s level. Adjusted EBITDA margin fell to 31% from 32.2% in the year-ago quarter.
Adjusted EBITDA margin for the USIS division was 35.3% compared with 39.4% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 25.8% compared with 29.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 46.8% compared with 48.4% a year ago.
Balance Sheet and Cash Flow
Equifax exited fourth-quarter 2022 with cash and cash equivalents of $285.2 million compared with $241.7 million at the end of the prior quarter. Long-term debt was $4.82 billion, comparatively flat from the year-ago quarter.
EFX utilized $325.4 million of cash from operating activities while capex was $156.1 million. Also, Equifax paid out dividends of $47.8 million to its shareholders in the reported quarter.
Q1 and Full-Year 2023 Guidance
For the first quarter of 2023, Equifax expects revenues between $1.27 billion and $1.29 billion.
Adjusted EPS is anticipated in the range of $1.30-$1.40.
For 2023, revenues are now expected between $5.275 billion and $5.375 billion.
Adjusted EPS is now anticipated in the range of $7.05-$7.35.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -22.94% due to these changes.
VGM Scores
Currently, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 4.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Equifax (EFX - Free Report) . Shares have lost about 4.6% in that time frame, underperforming 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 drivers.
Equifax Tops Q4 Earnings
Equifax reported stellar fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Adjusted earnings (excluding 64 cents from non-recurring items) of $1.52 per share beat the Zacks Consensus Estimate by 2.7% but decreased 17.4% on a year-over-year basis.
Revenues of $1.2 billion beat the Zacks Consensus Estimate by 1.5% but decreased 4.4% year over year on a reported basis and 2% on a local-currency basis.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division were $405.9 million, down 6% from the year-ago quarter’s level. Within the division, Online Information Solutions’ revenues of $308 million were down 2% from the year-ago quarter’s figure. Mortgage Solutions’ revenues of $26 million declined 36% year over year. Financial Marketing Services’ revenues were $71.9 million, down 9% year over year.
Revenues in the International division totaled $283.7 million, down 1% year over year on a reported basis and on a local-currency basis. The Asia Pacific revenues of $84.6 million fell 4% year over year on a reported basis but grew 6% on a local-currency basis.
Revenues from Europe amounted to $81.5 million, down 10% year over year on a reported basis but up 3% on a local-currency basis. Latin America revenues of $53.3 million grew 18% year over year on a reported basis and 31% on a local-currency basis. Canada revenues of $64.3 million were up 1% year over year on a reported basis and 7% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $508.4 million, down 4% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $398.6 million were down 7% year over year. Employer Services’ revenues of $109.8 million were up 5% year over year.
Operating Results
Adjusted EBITDA in the fourth quarter of 2022 totaled $371.1 million, down 8% from the year-ago quarter’s level. Adjusted EBITDA margin fell to 31% from 32.2% in the year-ago quarter.
Adjusted EBITDA margin for the USIS division was 35.3% compared with 39.4% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 25.8% compared with 29.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 46.8% compared with 48.4% a year ago.
Balance Sheet and Cash Flow
Equifax exited fourth-quarter 2022 with cash and cash equivalents of $285.2 million compared with $241.7 million at the end of the prior quarter. Long-term debt was $4.82 billion, comparatively flat from the year-ago quarter.
EFX utilized $325.4 million of cash from operating activities while capex was $156.1 million. Also, Equifax paid out dividends of $47.8 million to its shareholders in the reported quarter.
Q1 and Full-Year 2023 Guidance
For the first quarter of 2023, Equifax expects revenues between $1.27 billion and $1.29 billion.
Adjusted EPS is anticipated in the range of $1.30-$1.40.
For 2023, revenues are now expected between $5.275 billion and $5.375 billion.
Adjusted EPS is now anticipated in the range of $7.05-$7.35.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -22.94% due to these changes.
VGM Scores
Currently, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Equifax has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.