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Why Is Equifax (EFX) Up 3.6% 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 added about 3.6% 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 catalysts.
Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved on a year-over-year basis. The reported figure exceeded the guided range of $1.60-$1.70.
Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 26% year over year on a reported basis and 23% on a local-currency basis. The reported figure exceeded the guided range of $1.14-$1.16 billion.
The company reported its sixth consecutive quarter of solid double-digit revenue and earnings growth. The uptick was driven by strength across the company’s Workforce Solutions, U.S. Information Solutions (“USIS”) and International segments. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth. The company has delivered 46 new products leveraging EFX Cloud.
Segmental Revenues
Revenues in the USIS division came in at $405.8 million, up 11% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $298 million were up 13% year over year. Mortgage Solutions’ revenues of $49.3 million declined 4% year over year. Financial Marketing Services’ revenues came in at $58.5 million, up 14% year over year.
Revenues in the International division totaled $250.9 million, up 39% year over year on a reported basis and 25% on a local-currency basis. Asia Pacific revenues of $91.4 million grew 40% year over year on a reported basis and 21% on a local-currency basis. Revenues from Europe came in at $68.4 million, up 42% year over year on a reported basis and 27% on a local-currency basis. Latin Americarevenues of $44 million grew 29% year over year on a reported basis and 30% on a local-currency basis. Canadarevenues of $47.1 million improved 42% year over year on a reported basis and 26% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $495.7 million, up 40% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $394.5 million were up 57% year over year. Employer Services revenues of $101.2 million remained flat year over year.
Revenues in the Global Consumer Solutions segment amounted to $82.4 million, down 2% year over year on a reported basis and 3% on a local-currency basis.
Operating Results
Adjusted EBITDA in the second quarter of 2021 came in at $431.2 million, up 20% from the year-ago quarter. Adjusted EBITDA margin fell to 34.9% from 36.5% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 40.3% compared with 44.1% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 27.3% compared with 21.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 58% compared with 56.3% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 22.5% compared with 20.8% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited second-quarter 2021 with cash and cash equivalents of $458.1 million compared with $765.9 million at the end of the prior quarter. Long-term debt was $3.28 billion, flat sequentially.
The company generated $407.7 million of cash from operating activities and capex was $122.5 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Third-Quarter and Full-Year 2021 Guidance
For the third quarter of 2021, Equifax expects revenues between $1.16 and $1.18 billion. Adjusted EPS is anticipated in the range of $1.62-$1.72.
For full-year 2021, revenues are now expected between $4.76 and $4.80 billion compared with the prior guidance of $4.58-$4.68 billion. Adjusted EPS is now anticipated in the range of $7.25-$7.45 compared with the prior guidance of $6.75-$7.05.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Equifax has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 broadly 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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Why Is Equifax (EFX) Up 3.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Equifax (EFX - Free Report) . Shares have added about 3.6% 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 catalysts.
Equifax Tops Q2 Earnings & Revenue Estimates
Equifax reported better-than-expected second-quarter 2021 results.
Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved on a year-over-year basis. The reported figure exceeded the guided range of $1.60-$1.70.
Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 26% year over year on a reported basis and 23% on a local-currency basis. The reported figure exceeded the guided range of $1.14-$1.16 billion.
The company reported its sixth consecutive quarter of solid double-digit revenue and earnings growth. The uptick was driven by strength across the company’s Workforce Solutions, U.S. Information Solutions (“USIS”) and International segments. The company has been executing its EFX2023 strategy, leveraging the EFX Cloud to drive new products, innovation and growth. The company has delivered 46 new products leveraging EFX Cloud.
Segmental Revenues
Revenues in the USIS division came in at $405.8 million, up 11% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $298 million were up 13% year over year. Mortgage Solutions’ revenues of $49.3 million declined 4% year over year. Financial Marketing Services’ revenues came in at $58.5 million, up 14% year over year.
Revenues in the International division totaled $250.9 million, up 39% year over year on a reported basis and 25% on a local-currency basis. Asia Pacific revenues of $91.4 million grew 40% year over year on a reported basis and 21% on a local-currency basis. Revenues from Europe came in at $68.4 million, up 42% year over year on a reported basis and 27% on a local-currency basis. Latin Americarevenues of $44 million grew 29% year over year on a reported basis and 30% on a local-currency basis. Canadarevenues of $47.1 million improved 42% year over year on a reported basis and 26% on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $495.7 million, up 40% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $394.5 million were up 57% year over year. Employer Services revenues of $101.2 million remained flat year over year.
Revenues in the Global Consumer Solutions segment amounted to $82.4 million, down 2% year over year on a reported basis and 3% on a local-currency basis.
Operating Results
Adjusted EBITDA in the second quarter of 2021 came in at $431.2 million, up 20% from the year-ago quarter. Adjusted EBITDA margin fell to 34.9% from 36.5% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 40.3% compared with 44.1% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 27.3% compared with 21.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 58% compared with 56.3% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 22.5% compared with 20.8% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited second-quarter 2021 with cash and cash equivalents of $458.1 million compared with $765.9 million at the end of the prior quarter. Long-term debt was $3.28 billion, flat sequentially.
The company generated $407.7 million of cash from operating activities and capex was $122.5 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Third-Quarter and Full-Year 2021 Guidance
For the third quarter of 2021, Equifax expects revenues between $1.16 and $1.18 billion. Adjusted EPS is anticipated in the range of $1.62-$1.72.
For full-year 2021, revenues are now expected between $4.76 and $4.80 billion compared with the prior guidance of $4.58-$4.68 billion. Adjusted EPS is now anticipated in the range of $7.25-$7.45 compared with the prior guidance of $6.75-$7.05.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Equifax has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 broadly 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.