A month has gone by since the last earnings report for Equifax, Inc. (EFX Quick QuoteEFX - Free Report) . Shares have added about 3.5% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Surpasses Q4 Earnings and Revenue Estimates

Keeping its earnings streak alive for the eighth time in a row, Equifax reported better-than-expected results for the fourth quarter of 2016. The company’s adjusted earnings (excluding amortization expenses, Veda Group acquisition-related charges and other one-time items) per share from continuing operations of $1.42 surpassed the Zacks Consensus Estimate of $1.38 and surged 24.7% year over year.

On a GAAP basis, the company reported earnings of $1.01 per share, up from the year-ago quarter tally of $0.93. The strong year-over-year bottom-line growth was mainly aided by solid top-line performance and stringent cost management, which was partially offset by a slight increase in the number of total outstanding shares.
 
Details of the Quarter

Equifax’s revenues of $801.1 million came ahead of the Zacks Consensus Estimate of $800 million as well as management’s guided range of $797 million to $801 million (mid-point $799 million). The figure was also up 20.2% on a year-over-year basis.

The company made slight changes in its reportable segments from first-quarter 2016. The U.S. Information Solutions (USIS) and Workforce Solutions remained unchanged, while Personal Solutions was renamed to Global Consumer Solutions. Under the International segment, Equifax has “created a new Asia Pacific reporting unit, including the Veda acquisition as well as TDX Australia and India operations, which previously were part of the Europe reporting unit.”

Segment-wise, total USIS revenues were up 7% year over year to $316.2 million. Among its sub-segments, growth was recorded in Online Information Solutions (4%), Mortgage Solutions Services (29%) and Financial Marketing Services (7%).

International revenues (including Europe, the Asia-Pacific, Canada and Latin America) surged 49% year over year to $212.4 million. On a constant-currency basis, revenues soared 62%. Growth was mainly driven by the Veda Group acquisition, which increased the Asia-Pacific region’s contribution to revenues to $70.7 million from $2.6 million. Moreover, the company registered an increase of 4% each in Europe and Canada. However, revenues from Latin America dropped 4%.

Revenues from the Workforce Solutions segment surged 21% year over year to $173.6 million, primarily on the back of 24% revenue growth in Verification Services and 15% in Employer Services.

Global Consumer Solutions contributed $98.9 million to total revenue, reflecting an 18% year-over-year jump.

Operating Results

Equifax’s adjusted operating income increased approximately 32% to $267.2 million. Consequently, adjusted operating margin expanded 300 basis points (bps) to 33.4%. Adjusted net income came in at $172.4 million or $1.42 per share, compared with $137.5 million or $1.14 per share reported a year ago.

Balance Sheet & Cash Flow

Equifax exited the quarter with $129.3 million in cash and cash equivalents, up from the previous quarter’s balance of $111.5 million. Total long-term debt (excluding current portion) was $2.09 billion, down from $2.14 billion at the end of third-quarter 2016. During 2016, Equifax generated cash flow of $784.5 million from operational activities. The company paid $157.6 million as dividends in 2016.

Guidance

Buoyed by strong fourth-quarter results, Equifax provided an optimistic outlook for the first quarter and full year 2017. For full year 2017, Equifax expects revenues to come in a range of $3.375–$3.425 billion (mid-point $3.40 billion). Adjusted earnings per share are forecast to be between $5.96 and $6.10 (midpoint: $6.03).

For the first quarter, Equifax projects revenues in a range of $822 million to $826 million (midpoint: $824 million). Adjusted earnings per share are projected to be between $1.39 and $1.42 (midpoint: $1.405).

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Equifax, Inc. Price and Consensus

 

Equifax, Inc. Price and Consensus | Equifax, Inc. Quote

VGM Scores

At this time, Equifax's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.