Equifax
EFX
$154.84
-7.35%
Equifax Incorporated is one of the three major credit bureaus in the United States, operating in the data and analytics industry. The company's core business involves providing consumer credit reports, credit scores, and related analytics to lenders, alongside a significant workforce solutions segment that offers income verification and human resources services. As a dominant player in a highly concentrated industry, Equifax's competitive identity is defined by its vast proprietary data assets, established relationships with financial institutions, and its ongoing transformation into a broader data and analytics platform. The current investor narrative is dominated by the stock's significant underperformance relative to the market, driven by concerns over a potential cyclical slowdown in credit-sensitive businesses, margin pressures, and the lingering impact of its 2017 data breach on regulatory and legal costs, which has led to a sharp de-rating in its valuation over the past year.…
EFX
Equifax
$154.84
Related headlines
Investment Opinion: Should I buy EFX Today?
Rating & Thesis: Hold. Equifax presents a highly bifurcated risk/reward profile where deep value arguments are counterbalanced by clear fundamental deterioration, making it unsuitable for a clear Buy or Sell recommendation until earnings visibility improves. Analyst sentiment leans bullish with maintained 'Overweight'/'Buy' ratings, but the lack of a consensus price target and the stock's 39% annual decline suggest the market is deeply skeptical.
Supporting Evidence: The primary valuation metric, the forward P/E of 15.9x, appears reasonable if the company hits analyst EPS estimates of ~$16.97. However, this is contrasted by a severely depressed trailing P/E of 40.5x and elevated PS ratio of 4.40. Revenue growth, while positive at 9.24% YoY, shows signs of plateauing sequentially. Profitability is the key concern, with net margin at 11.33% in Q4 but TTM EPS devastated by charges. The strong TTM free cash flow of $1.13B is a positive outlier, providing a margin of safety.
Risks & Conditions: The two biggest risks are a failure to achieve the projected earnings recovery and a further deceleration in revenue growth. This Hold rating would upgrade to a Buy if the company demonstrates a clear quarterly EPS rebound towards the $16+ annualized run-rate and stabilizes revenue growth above 8% YoY. It would downgrade to a Sell if the stock breaks decisively below its 52-week low of $153.91 on high volume, signaling a failure of the value support. Relative to its own distressed price history and the expectation of earnings normalization, the stock appears fairly valued to slightly undervalued, but this is entirely contingent on a successful earnings recovery.
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EFX 12-Month Price Forecast
The assessment is neutral due to the high uncertainty between a compelling value opportunity and a fundamental value trap. The forward valuation is attractive, but it is entirely predicated on a dramatic earnings recovery that the company has yet to demonstrate. The stock's technical oversold condition and strong cash flow provide a floor, while the lack of earnings visibility and plateauing growth cap the near-term upside. The stance would upgrade to bullish on confirmation of the EPS recovery (e.g., two consecutive quarters of EPS > $4.00) and would turn bearish on a breakdown below the $154 support level on deteriorating fundamentals.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Equifax's 12-month outlook, with a consensus price target around $201.29 and implied upside of +30.0% versus the current price.
Average Target
$201.29
13 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
13
covering this stock
Price Range
$124 - $201
Analyst target range
The stock is covered by 13 analysts, indicating substantial institutional interest. The consensus sentiment leans bullish, with recent institutional ratings from firms like Morgan Stanley, JP Morgan, and Wells Fargo maintaining 'Overweight' or equivalent 'Buy' ratings, while Goldman Sachs holds a 'Neutral' stance. The average target price implied by analyst EPS estimates is $16.97, but this appears to be an EPS estimate, not a price target; given the lack of a provided consensus price target, the implied upside cannot be calculated from the given data, though the maintained 'Buy' ratings from several major firms in early 2026 suggest analysts see value at current depressed levels. The target range for estimated EPS is $16.30 to $17.90, representing a relatively tight spread of about 9.8%, which indicates a high degree of consensus on near-term earnings potential; the high-end target likely assumes successful execution on growth initiatives and margin improvement, while the low-end may factor in continued macroeconomic headwinds or competitive pressures. The recent flurry of analyst actions in February 2026, all reiterating existing ratings, suggests a period of reassessment but no major change in the fundamental outlook, with the wide performance gap versus the market being the primary debate.
Bulls vs Bears: EFX Investment Factors
The bull and bear cases for Equifax are sharply divided, with the bear side currently holding stronger evidence due to the stock's severe technical breakdown, earnings collapse, and decelerating revenue trajectory. The bulls' case rests on a deep-value argument, strong cash flow, and analyst expectations for an earnings recovery. The single most important tension in the investment debate is whether the current forward P/E of 15.9x represents a compelling discount for a normalized earnings stream, or if it is a value trap masking fundamental deterioration in growth and profitability. The resolution hinges on the company's ability to demonstrate a clear rebound in bottom-line earnings and re-accelerate top-line growth in the coming quarters.
Bullish
- Strong Free Cash Flow Generation: Equifax generates robust free cash flow, with TTM FCF of $1.13B, providing significant financial flexibility. This cash flow supports dividends, buybacks, and debt service, underpinning financial stability despite earnings volatility.
- Attractive Forward P/E Valuation: The stock's forward P/E of 15.9x is reasonable for a market leader, especially compared to its distorted trailing P/E of 40.5x. This suggests the market has priced in significant pessimism, offering a potential entry point if earnings recover as expected.
- Analyst Consensus on Earnings Recovery: Analysts show strong consensus on a significant EPS recovery, with an average estimate of $16.97 and a tight range of $16.30 to $17.90. This indicates a high degree of confidence in the company's normalized earnings power over the next year.
- Dominant Market Position & Recurring Revenue: As one of the three major U.S. credit bureaus, Equifax benefits from a highly concentrated industry and essential, recurring revenue streams from lenders. Its Workforce Solutions segment, contributing ~40% of revenue, provides diversification and stability.
Bearish
- Severe Profitability & Earnings Distortion: Trailing twelve-month EPS is a mere $0.02, indicating significant one-time charges or non-operating issues are severely impacting the bottom line. While the forward P/E is reasonable, the current earnings collapse creates high uncertainty and valuation risk.
- Revenue Growth Deceleration & Plateau: Recent quarterly revenue growth of 9.24% YoY in Q4 2025 is positive, but sequential revenue has been flat ($1.44B to $1.55B over four quarters). This plateau suggests core growth momentum may be stalling, a critical concern for a stock previously valued on growth.
- High Beta & Extreme Underperformance: With a beta of 1.31, EFX is 31% more volatile than the market, amplifying downside risk. This is evidenced by its 39% annual loss versus the S&P 500's 23% gain, indicating deep fundamental or sector-specific concerns driving selling pressure.
- Elevated Valuation on Sales & Book Value: Despite the price decline, the stock trades at a Price/Sales ratio of 4.40 and a Price/Book ratio of 5.81. These multiples remain elevated and suggest the market still ascribes a premium, which could compress further if growth disappoints.
EFX Technical Analysis
The stock is in a pronounced and sustained downtrend, having declined 39.13% over the past year, significantly underperforming the S&P 500, which gained 22.86% over the same period. Currently trading at $163.71, the price sits just 6.4% above its 52-week low of $153.91 and is 40.7% below its 52-week high of $275.91, positioning it in deeply oversold territory and suggesting it is trading at distressed levels, which may represent a value opportunity if the fundamental outlook stabilizes. Recent momentum shows a slight short-term bounce, with a 2.36% gain over the past month, which contrasts sharply with the severe longer-term losses, indicating a potential attempt at stabilization or a dead-cat bounce; however, the 3-month and 6-month changes remain deeply negative at -11.16% and -25.87%, respectively, confirming the primary downtrend remains intact. The stock exhibits high volatility with a beta of 1.31, meaning it is 31% more volatile than the broader market, which amplifies both risk and potential reward; key technical levels to watch are the 52-week low near $154 as critical support, a break below which could signal further capitulation, and the 52-week high near $276 as a distant resistance level, with any sustained move above the $200 level needed to suggest a meaningful trend reversal.
Beta
1.31
1.31x market volatility
Max Drawdown
-44.8%
Largest decline past year
52-Week Range
$154-$276
Price range past year
Annual Return
-39.5%
Cumulative gain past year
| Period | EFX Return | S&P 500 |
|---|---|---|
| 1m | -5.7% | +0.3% |
| 3m | -14.7% | +12.3% |
| 6m | -29.3% | +8.9% |
| 1y | -39.5% | +24.0% |
| ytd | -27.7% | +8.7% |
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EFX Fundamental Analysis
Revenue growth has been positive but appears to be decelerating; the most recent quarterly revenue (Q4 2025) was $1.55 billion, representing a year-over-year growth of 9.24%, but this follows a pattern of sequential quarterly revenue that has been relatively flat ($1.44B, $1.54B, $1.54B, $1.55B from Q1 to Q4 2025), indicating growth momentum may be plateauing. The company remains profitable, with Q4 2025 net income of $175.7 million and a net margin of 11.33%, yet profitability has been inconsistent, as evidenced by a trailing twelve-month EPS of just $0.02, suggesting significant non-operating or one-time charges are impacting bottom-line results; the gross margin for the latest quarter was 44.6%, but the reported gross profit ratio of 10.96% indicates a significant portion of costs are classified within cost of revenue, highlighting the data-intensive nature of the business. Financially, Equifax carries a moderate debt load with a debt-to-equity ratio of 1.11, and it generates substantial free cash flow, with TTM free cash flow of $1.13 billion, providing ample liquidity for dividends, share repurchases, and debt service, as reflected in a healthy current ratio of 0.60 and an ROE of 14.34%, indicating reasonable efficiency in generating returns on shareholder equity.
Quarterly Revenue
$1.6B
2025-12
Revenue YoY Growth
+0.09%
YoY Comparison
Gross Margin
+0.10%
Latest Quarter
Free Cash Flow
$1.1B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is EFX Overvalued?
Given the company's positive net income, the primary valuation metric is the Price-to-Earnings (P/E) ratio. The trailing P/E is elevated at 40.5x, which is distorted by the low TTM EPS of $0.02, while the forward P/E is a more reasonable 15.9x, indicating the market expects a significant earnings recovery in the coming year. Compared to industry averages, Equifax trades at a premium on a Price-to-Sales basis, with a PS ratio of 4.40, though direct industry comps are not provided in the data; the forward P/E of 15.9x suggests the market is pricing in normalized earnings, but the high trailing multiple reflects recent profitability challenges. Historically, the stock's own valuation has compressed dramatically from levels seen in 2023 and early 2024, where its P/E ratio frequently exceeded 50x; the current trailing P/E of 40.5x, while high, is below its recent historical peaks but remains elevated relative to its forward multiple, suggesting the market has already priced in significant pessimism but awaits clearer evidence of an earnings rebound.
PE
40.5x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 27x~73x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Equifax faces significant financial risk from its severely distorted profitability, with TTM EPS of just $0.02 indicating large, non-recurring charges that obscure operational performance. While the company generates strong free cash flow ($1.13B TTM) and maintains a manageable debt-to-equity ratio of 1.11, its revenue growth has plateaued sequentially, raising concerns about its ability to justify its current sales multiple (PS of 4.40). Furthermore, the reported gross profit ratio of 10.96% in the latest quarter, starkly lower than the 44.6% gross margin, suggests high data-related costs within COGS, creating ongoing margin pressure.
Market & Competitive Risks: The stock trades at a premium valuation on a sales basis (PS 4.40) despite its significant underperformance, creating valuation compression risk if growth continues to decelerate. Its high beta of 1.31 means it is highly sensitive to broader market downturns, which could be exacerbated by its cyclical exposure to credit-sensitive businesses. Recent news highlights competitive threats from AI-driven lending platforms like Upstart, which, while not a direct competitor, represent a disruptive force in the credit assessment landscape that could pressure Equifax's traditional model over the long term.
Worst-Case Scenario: The worst-case scenario involves a combination of an economic downturn reducing credit inquiry volumes, failure to achieve the analyst-expected EPS recovery, and a further de-rating of its valuation multiples. This could trigger a break below the critical 52-week low support of $153.91. A realistic downside could see the stock re-test its recent lows, implying a potential loss of approximately -6.4% from the current price of $163.71. A more severe bear case, factoring in a deeper recession and multiple compression, could see a drawdown approaching the stock's maximum observed drawdown of -43.78% from its high.
FAQ
The key risks are, in order of severity: 1) Earnings Recovery Failure: The catastrophic TTM EPS of $0.02 may not rebound as analysts expect, leaving the stock overvalued. 2) Cyclical Downturn: With a beta of 1.31 and core credit business, an economic slowdown could crush revenue growth. 3) Valuation Compression: Even if earnings recover, the PS ratio of 4.40 remains high and could compress further. 4) Competitive & Regulatory: Disruption from AI lending models and ongoing costs from the 2017 data breach pose persistent threats.
The 12-month forecast is highly uncertain, centered on whether the company achieves its earnings recovery. The base case (50% probability) sees the stock trading between $190 and $220 as EPS normalizes near the $16.97 consensus. The bull case (30% probability) projects a rally to $240-$275 if execution exceeds expectations and sentiment improves. The bear case (20% probability) warns of a drop to $154-$170 if the recovery stalls. The most likely scenario is the base case, but it is heavily dependent on the company proving its profitability in the next two quarters.
EFX's valuation is schizophrenic and depends entirely on the time frame. On a trailing basis, it appears extremely overvalued with a P/E of 40.5x on TTM EPS of $0.02. On a forward basis, assuming analyst estimates are correct, it appears reasonably or slightly undervalued at a P/E of 15.9x. Compared to its own history, where P/E frequently exceeded 50x, the current multiple represents a significant de-rating. The market is currently valuing EFX as if a major earnings recovery is probable but not certain, placing it in a fair value range with a skew to the downside if execution fails.
EFX is a high-risk, high-potential-reward stock that may be a good buy only for specific investors. For value-oriented contrarians who believe the analyst EPS forecast of ~$16.97 is achievable, the current forward P/E of 15.9x could be attractive. The stock is deeply oversold, trading near its 52-week low after a 39% annual decline. However, it is not a good buy for growth investors or the risk-averse, as the thesis hinges entirely on an unproven earnings recovery, and significant downside risk remains if that recovery falters.
EFX is unsuitable for short-term trading due to its high volatility (beta 1.31) and lack of near-term positive catalysts. It is best approached as a long-term (3+ year) contrarian value investment. The thesis requires time for the earnings recovery to play out and for the market to re-assess the stock's value. The low dividend yield of 0.87% does not provide meaningful income support. Investors must be prepared for significant price swings and should have a horizon long enough to weather potential further volatility while the fundamental story develops.