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Equifax (EFX) and BizEquity Expand Strategic Partnership

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Leading data management company Equifax Inc. (EFX - Free Report) recently expanded its strategic alliance with BizEquity, a global leader of business valuation knowledge and big data. The agreement aims at enhancing Equifax’s capabilities to serve its customers better.

Per the agreement, the companies will introduce a business valuation tool (BizEstimate Score) that will “help financial professionals prospect more effectively and small business owners better understand their business worth”.

The Deal

BizEquity’s patented cloud-based service is being used by several small business houses to better understand and address their insurance, wealth management, and lending needs and potential.

As part of the expanded arrangement, Equifax will offer BizEquity a new leading indicator, Equifax Marketing Data Services (MDS). BizEquity has covered the valuation up to 143 million private businesses so far.

Equifax claims that the new valuation tool will enable financial professionals provide real-time information to businesses about their current valuation as well as their performance. Also, it will help in determining further lending, insurance and wealth management opportunities. However, compared with traditional business valuation methods, the new offering will only take a fraction of time, thereby saving both time and effort for financial professionals.

According to Scott Wagner, senior vice president at Equifax, “Our MDS file has helped hundreds of financial and commercial institutions better market their product and services to business leaders and owners.” He added, “The addition of the BizEstimate model and attribute will help the clients we serve by providing a forward indicator of risk and revenue opportunities.”

Customers are now looking for solutions to streamline data collection capabilities. We believe that by leveraging BizEquity’s services, Equifax will be able to offer better data, technology and advisory solutions, besides being positioned as a leader in important markets.

We also believe that the agreement will benefit the company by expanding its customer base and boosting its top-line performance.

Notably, Equifax’s international revenues (including Europe, the Asia-Pacific, Canada and Latin America) surged 37% year over year to $216.6 million in the first quarter of 2017. On a constant-currency basis, revenues soared 41%. Growth was mainly driven by the Veda Group acquisition, which increased the Asia-Pacific region’s contribution to revenues to $72 million from $27.6 million. Moreover, revenues increased 20%, 15% and 2% in Latin America, Canada and Europe, respectively.

Last Words

We believe that management’s efforts, such as strategic initiatives for product innovation, expansion of data assets through acquisitions and continuous share gains in North America, should act as tailwinds. Also, the company’s strong correlation with the consumer and financial markets, and exposure in the U.S. and Europe are likely to propel growth, moving ahead.

However, we expect the company’s investments in new initiatives to weigh on its upcoming quarterly earnings. Additionally, uncertainty surrounding IT spending and the strengthening U.S. dollar are a few concerns. Moreover, increasing competition from the likes of Fiserv and Total System Services are the other factors likely to affect earnings in the near term.

Notably, the stock movement has been disappointing when compared with the Zacks categorized Financial Transaction Services industry in the last one year. Equifax gained 9.7% during the said period compared with the industry’s return of 15.1%.

Currently, Equifax has a Zacks Rank #3 (Hold).

A better-ranked stock in the technology sectors is DXC Technology Company. (DXC - Free Report) , carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXC Technology has a long-term EPS growth rate of 8%.

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