Equifax Inc.

Based on a comprehensive review of Equifax (EFX), the stock presents a challenging investment case at its current levels. While the company maintains moderate financial health and has recovered somewhat from its 52-week lows, several significant headwinds are evident.

From a technical perspective, EFX shows sustained weakness with substantial recent declines, underperforming the market and exhibiting high volatility. Fundamentally, the picture is mixed; while revenue shows modest growth, a sharp drop in the gross profit ratio signals potential cost pressures, and operational efficiency is merely satisfactory. Most concerning is the valuation, where extremely high multiples across all metrics—especially the TTM PE of 47.6 and PEG ratio of 3.25—suggest the stock is priced for perfection, leaving little room for error.

Recommendation: HOLD / CAUTION ADVISED

Given the combination of negative price momentum, mixed fundamentals, and a notably rich valuation, EFX does not appear to be worth buying at this time. The stock's high beta further increases its risk profile, making it susceptible to additional downside in a volatile market. Investors should wait for a more attractive entry point or clearer signs of sustained operational improvement and earnings growth that can justify its premium valuation.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, the 12-month outlook for Equifax (EFX) is cautious. The primary catalyst would be a significant acceleration in earnings growth to justify its premium valuation, potentially driven by successful cost management or new data product offerings. However, the key risks are substantial and include persistent cost pressures eroding profitability, high market volatility due to the stock's elevated beta, and a potential derating of its lofty valuation multiples if growth disappoints. In the absence of a specific analyst target, the outlook suggests range-bound to downward pressure, with a likely trading range between $160 and $210 as the market seeks a more sustainable valuation level. Investors are advised to adopt a patient stance.

Wall Street Consensus

Most Wall Street analysts are optimistic about Equifax Inc.'s 12-month outlook, with consensus target around $195.30, indicating expected upside potential.

Overall, EFX has investment potential but also faces challenges. Here are key factors to weigh before investing.

EFX has demonstrated significant weakness over the past year, characterized by substantial price declines and high volatility.

The stock's short-term performance is notably poor, with a sharp 11.93% decline over one month and a 7.19% drop over three months, significantly underperforming the market by 7.47% during the latter period. This negative momentum underscores persistent selling pressure relative to broader market conditions.

Currently trading at $193.37, EFX sits approximately 31% above its 52-week low but remains about 31% below its yearly high, indicating a recovery from the lows but still well-off peak levels. While the stock is not at extreme oversold levels, its high beta of 1.559 suggests it remains susceptible to above-average market volatility and downside risk.

Revenue & Profitability EFX's Q4 2025 revenue shows modest sequential growth to $1.55 billion, while profitability metrics demonstrate mixed performance. The net profit margin improved to 11.3%, though the operating profit margin remained stable at 18.3%. However, the gross profit ratio declined significantly from Q3's 57.1% to 10.9%, indicating potential cost pressures or business mix changes.

Financial Health The company maintains moderate leverage with a debt ratio of 42.9% and a debt-to-equity ratio of 1.11. Interest coverage remains adequate at 5.25x, though the cash ratio is low at 0.08, suggesting limited liquid assets relative to current obligations. Operating cash flow coverage ratios appear reasonable but warrant monitoring given the tight liquidity position.

Operational Efficiency EFX demonstrates modest operational efficiency with an asset turnover of 0.13 and return on equity of 3.8%. The 59 days sales outstanding indicates reasonable receivables management, while the fixed asset turnover of 0.43 suggests moderate utilization of long-term assets. These metrics point to satisfactory but not exceptional operational performance.

Valuation Level: Equifax's valuation appears elevated based on traditional metrics. The TTM PE ratio of 47.6 and forward PE of 37.5 are both significantly high, suggesting the market is pricing in substantial future growth expectations. This premium valuation is further supported by high multiples for PB ratio (4.7), EV/EBITDA (66.9), and particularly the PEG ratio of 3.25, which indicates the stock may be overvalued relative to its earnings growth prospects.

Peer Comparison: Without specific industry average data for comparison, a definitive peer assessment cannot be provided. However, given the exceptionally high EV/EBITDA multiple of 66.9 and elevated PE ratios, Equifax likely trades at a substantial premium to typical professional services or data analytics companies. Investors should seek comparable industry multiples to determine the exact valuation discrepancy relative to sector peers.

Volatility Risk: EFX exhibits significantly higher volatility than the broader market, as indicated by its Beta of 1.559, meaning its price movements are approximately 56% more volatile. This elevated sensitivity is corroborated by a substantial 1-year maximum drawdown of -37.6%, highlighting the potential for significant capital loss during market downturns.

Other Risks: The lack of reported short interest suggests the market does not harbor a strong negative sentiment or bearish conviction on the stock. However, this absence does not eliminate fundamental risks, which could include industry-specific regulatory pressures or earnings volatility, and investors should assess liquidity through average trading volumes and bid-ask spreads.