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Equifax (EFX) Up 5.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Equifax (EFX - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Equifax due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. The reported figure exceeded the guided range of $1.45-$1.55.
Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis. The reported figure exceeded the guided range of $1.11 -$1.13 billion.
The company reported its fifth consecutive quarter of solid double-digit revenue growth. The uptick was driven by strength across the company’s Workforce Solutions and U.S. Information Solutions (“USIS”) segments - both delivering a combined 38% revenue increase on the back of solid growth across both mortgage and non-mortgage businesses. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth. The company has completed five acquisitions – Kount, HIREtech, i2Verify, AccountScore and CreditWorks.
Segmental Revenues
Revenues in the U.S. Information Solutions division came in at $409.4 million, up 19% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $302 million were up 19% year over year. Mortgage Solutions’ revenues of $54.1 million improved 27% year over year. Financial Marketing Services’ revenues came in at $53.3 million, up 12% year over year.
Revenues in the International division totaled $241.3 million, up 12% year over year on a reported and 3% on a local-currency basis. Asia Pacific revenues of $86.9 million grew 25% year over year on a reported basis and 7% on a local-currency basis. Revenues from Europe came in at $68.7 million, up 3% year over year on a reported basis but down 5% on a local-currency basis. Latin Americarevenues of $41.6 million declined 4% year over year on a reported basis but were up 1% on a local-currency basis. Canadarevenues of $44.1 million improved 20% year over year on a reported basis and 13% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $480.9 million, up 59% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $385.2 million were up 75% year over year. Employer Services revenues of $95.7 million were up 17% year over year.
Revenues in the Global Consumer Solutions segment amounted to $81.4 million, down 16% year over year on a reported basis and 17% on a local-currency basis.
Operating Results
Adjusted EBITDA in the first quarter of 2021 came in at $431.3 million compared with $316.5 million in the year-ago quarter. Adjusted EBITDA margin rose to 35.6% from 33% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 42.9% compared with 44.7% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 28.2% compared with 27.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 59.3% compared with 51.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 24.6% compared with 23.1% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited first-quarter 2021 with cash and cash equivalents of $765.9 million compared with $1.68 billion at the end of the prior quarter. Long-term debt was $3.28 billion, flat sequentially.
The company generated $143.4 million of cash from operating activities and capex was $113 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Second-Quarter and Full-Year 2021 Guidance
For the second quarter of 2021, Equifax expects revenues between $1.14 and $1.16 billion. Adjusted EPS is anticipated in the range of $1.60-$1.70.
For full-year 2021, revenues are expected between $4.58 and $4.68 billion compared with the prior guidance of $4.35-$4.45 billion. Adjusted EPS is anticipated in the range of $6.75-$7.05 compared with the prior guidance of $6.20-$6.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 12.23% due to these changes.
VGM Scores
At this time, Equifax has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Equifax has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Equifax (EFX) Up 5.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Equifax (EFX - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Equifax due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Equifax Tops Q1 Earnings & Revenue Estimates
Equifax reported better-than-expected first-quarter 2021 results.
Adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. The reported figure exceeded the guided range of $1.45-$1.55.
Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis. The reported figure exceeded the guided range of $1.11 -$1.13 billion.
The company reported its fifth consecutive quarter of solid double-digit revenue growth. The uptick was driven by strength across the company’s Workforce Solutions and U.S. Information Solutions (“USIS”) segments - both delivering a combined 38% revenue increase on the back of solid growth across both mortgage and non-mortgage businesses. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth. The company has completed five acquisitions – Kount, HIREtech, i2Verify, AccountScore and CreditWorks.
Segmental Revenues
Revenues in the U.S. Information Solutions division came in at $409.4 million, up 19% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $302 million were up 19% year over year. Mortgage Solutions’ revenues of $54.1 million improved 27% year over year. Financial Marketing Services’ revenues came in at $53.3 million, up 12% year over year.
Revenues in the International division totaled $241.3 million, up 12% year over year on a reported and 3% on a local-currency basis. Asia Pacific revenues of $86.9 million grew 25% year over year on a reported basis and 7% on a local-currency basis. Revenues from Europe came in at $68.7 million, up 3% year over year on a reported basis but down 5% on a local-currency basis. Latin Americarevenues of $41.6 million declined 4% year over year on a reported basis but were up 1% on a local-currency basis. Canadarevenues of $44.1 million improved 20% year over year on a reported basis and 13% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $480.9 million, up 59% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $385.2 million were up 75% year over year. Employer Services revenues of $95.7 million were up 17% year over year.
Revenues in the Global Consumer Solutions segment amounted to $81.4 million, down 16% year over year on a reported basis and 17% on a local-currency basis.
Operating Results
Adjusted EBITDA in the first quarter of 2021 came in at $431.3 million compared with $316.5 million in the year-ago quarter. Adjusted EBITDA margin rose to 35.6% from 33% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 42.9% compared with 44.7% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 28.2% compared with 27.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 59.3% compared with 51.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 24.6% compared with 23.1% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited first-quarter 2021 with cash and cash equivalents of $765.9 million compared with $1.68 billion at the end of the prior quarter. Long-term debt was $3.28 billion, flat sequentially.
The company generated $143.4 million of cash from operating activities and capex was $113 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Second-Quarter and Full-Year 2021 Guidance
For the second quarter of 2021, Equifax expects revenues between $1.14 and $1.16 billion. Adjusted EPS is anticipated in the range of $1.60-$1.70.
For full-year 2021, revenues are expected between $4.58 and $4.68 billion compared with the prior guidance of $4.35-$4.45 billion. Adjusted EPS is anticipated in the range of $6.75-$7.05 compared with the prior guidance of $6.20-$6.50.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 12.23% due to these changes.
VGM Scores
At this time, Equifax has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Equifax has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.