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Equifax (EFX) Gains From Buyouts & Innovation Amid Cyber Risks
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Equifax Inc. (EFX - Free Report) has had an impressive run over the past year. The stock has gained 33.4%, outperforming the 24.6% rally of the industry it belongs to and the 28.7% rise of the Zacks S&P 500 composite.
The company recently reported better-than-expected fourth-quarter 2023 results. Adjusted earnings came in at $1.81 per share, beating the Zacks Consensus Estimate by 4% and increasing 19.1% year over year. Total revenues of $1.3 billion beat the consensus mark by 1.1% and increased 10.7% year over year on a reported basis and 14% on a local currency basis.
How is Equifax Doing?
Equifax’s offerings are of great importance to its customers as they use the credit information and related analytical services and data to process applications for new credit cards, automobile loans, home and equity loans and other consumer loans. The company uses advanced statistical techniques and proprietary tools to analyze all available data, creating customized insights, decision-making solutions and processing services. This helps customers understand, manage and protect their clients’ information and make more informed financial decisions.
We believe that a solid product portfolio and a clear understanding of the sector will keep Equifax ahead of its peers. We expect U.S. Information Solution and International revenues to increase 8% and 15% year over year, respectively, in 2024.
Revenue growth momentum is likely to continue over the next few years. Total revenues have witnessed a compounded annual growth rate (CAGR) of 8.5% in the last five years (2019-2023). We believe synergies from acquisitions, in addition to continued general consumer credit activity, product innovation, initiatives to foster enterprise growth and efficient business execution, will continue to drive its revenues over the long run.
Acquisitions, over time, have enabled the company to provide a broad insight into consumer performance, financial status, capabilities of customers and market opportunities. The recent acquisition of Boa Vista Serviços, which is now a wholly-owned subsidiary of Equifax Brasil, has expanded the company's footprint in the large and fast-growing Brazilian total addressable market.
The 2017 cybersecurity incident, under which criminals stole highly sensitive personal data of approximately 143 million of its consumers, has heavily tarnished the brand image, reputation and credibility of the company. We believe that the incident will certainly have an adverse impact on its financial performance in the near term. Equifax's selling, general and administrative expenses increased 4% year over year in 2023. The increase was mainly due to a rise in litigation expense resulting from the payment of a penalty associated with the cybersecurity incident to the U.K. FCA.
FTI Consulting has an expected earnings growth rate of 6.2% for 2024. The company has a trailing four-quarter earnings surprise of 16.2%, on average. The stock has appreciated 17.3% in the past year.
Stantec has an expected earnings growth rate of 16.1% for 2024. The company has a trailing four-quarter earnings surprise of 9.3%, on average. The stock has appreciated 42.1% in the past year.
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Equifax (EFX) Gains From Buyouts & Innovation Amid Cyber Risks
Equifax Inc. (EFX - Free Report) has had an impressive run over the past year. The stock has gained 33.4%, outperforming the 24.6% rally of the industry it belongs to and the 28.7% rise of the Zacks S&P 500 composite.
The company recently reported better-than-expected fourth-quarter 2023 results. Adjusted earnings came in at $1.81 per share, beating the Zacks Consensus Estimate by 4% and increasing 19.1% year over year. Total revenues of $1.3 billion beat the consensus mark by 1.1% and increased 10.7% year over year on a reported basis and 14% on a local currency basis.
How is Equifax Doing?
Equifax’s offerings are of great importance to its customers as they use the credit information and related analytical services and data to process applications for new credit cards, automobile loans, home and equity loans and other consumer loans. The company uses advanced statistical techniques and proprietary tools to analyze all available data, creating customized insights, decision-making solutions and processing services. This helps customers understand, manage and protect their clients’ information and make more informed financial decisions.
We believe that a solid product portfolio and a clear understanding of the sector will keep Equifax ahead of its peers. We expect U.S. Information Solution and International revenues to increase 8% and 15% year over year, respectively, in 2024.
Revenue growth momentum is likely to continue over the next few years. Total revenues have witnessed a compounded annual growth rate (CAGR) of 8.5% in the last five years (2019-2023). We believe synergies from acquisitions, in addition to continued general consumer credit activity, product innovation, initiatives to foster enterprise growth and efficient business execution, will continue to drive its revenues over the long run.
Equifax, Inc. Revenue (TTM)
Equifax, Inc. revenue-ttm | Equifax, Inc. Quote
Acquisitions, over time, have enabled the company to provide a broad insight into consumer performance, financial status, capabilities of customers and market opportunities. The recent acquisition of Boa Vista Serviços, which is now a wholly-owned subsidiary of Equifax Brasil, has expanded the company's footprint in the large and fast-growing Brazilian total addressable market.
The 2017 cybersecurity incident, under which criminals stole highly sensitive personal data of approximately 143 million of its consumers, has heavily tarnished the brand image, reputation and credibility of the company. We believe that the incident will certainly have an adverse impact on its financial performance in the near term. Equifax's selling, general and administrative expenses increased 4% year over year in 2023. The increase was mainly due to a rise in litigation expense resulting from the payment of a penalty associated with the cybersecurity incident to the U.K. FCA.
Zacks Rank and Stocks to Consider
Equifax currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Business Services sector are FTI Consulting (FCN - Free Report) and Stantec (STN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FTI Consulting has an expected earnings growth rate of 6.2% for 2024. The company has a trailing four-quarter earnings surprise of 16.2%, on average. The stock has appreciated 17.3% in the past year.
Stantec has an expected earnings growth rate of 16.1% for 2024. The company has a trailing four-quarter earnings surprise of 9.3%, on average. The stock has appreciated 42.1% in the past year.