AnalystConsensusTarget updated the narrative for EFX

Equifax's fair value estimate has been revised down from $277.70 to $272.00. Analysts cite ongoing revenue growth and margin pressures resulting from new industry headwinds and increased competition in the credit services market.

Analyst Commentary

Analyst opinions on Equifax reflect a mix of recognition for the group's strategic assets and caution about emerging industry pressures. The following summarizes recent Street research perspectives:

Bullish Takeaways

• Bullish analysts underscore Equifax's ownership of high-quality, defensible assets, such as its well-known credit bureau and The Work Number database. Both of these create high entry barriers for competitors.
• Current valuation is supported by the expectation that Equifax will be able to manage and strategically adapt to new headwinds, minimizing long-term revenue erosion.
• Some experts believe the company's diversified solutions portfolio positions it for continued growth, particularly in certain end markets that are less sensitive to the volatility of the mortgage sector.
• Opportunities remain for Equifax to innovate and strengthen its competitive position, even as industry dynamics evolve.

Bearish Takeaways

• Bearish analysts highlight margin pressures and heightened competition as notable risks, particularly given the launch of FICO’s Mortgage Direct License Program. This introduces the potential for tri-merge resellers to bypass credit bureaus like Equifax.
• Some analysts have lowered price targets and cut future earnings forecasts, citing the likelihood of near- to mid-term revenue headwinds and uncertainty around resellers' infrastructure capabilities to adapt to FICO's new model.
• Regulatory uncertainty and the possibility of share loss to alternative scoring providers such as VantageScore continue to weigh on sentiment and valuation.
• The recent movement of the stock, alongside strong performance from FICO, suggests the market is pricing in both the challenges facing Equifax and the limitations on upside potential given current industry developments.

What's in the News

• Klarna and Afterpay have decided to withhold most "buy now, pay later" loan data from credit bureaus until reassured that customers will not be unfairly penalized, even as credit scores begin to incorporate BNPL information. Affirm, however, has started sharing its customer data with Experian and TransUnion (The Wall Street Journal).
• Equifax has completed a major buyback, repurchasing over 1.7 million shares for $427.39 million as part of its ongoing capital return program.
• The company raised its full-year 2025 revenue guidance midpoint by $40 million and now expects reported revenue growth between 6.1% and 6.7% and organic local currency growth between 6.5% and 7.1%.
• Equifax launched Ignite AI Advisor, a new generative AI-powered tool designed to help lenders identify growth opportunities and make informed decisions quickly, particularly aimed at smaller and mid-sized financial institutions.

Valuation Changes

• Fair Value Estimate: Lowered from $277.70 to $272.00. This reflects increased caution regarding future earnings.
• Discount Rate: Declined marginally from 7.30% to 7.28%. This indicates a slightly reduced risk premium in the valuation model.
• Revenue Growth: Revised down from 10.13% to 9.42%. This suggests tempered expectations for top-line expansion.
• Net Profit Margin: Decreased from 16.88% to 16.12%. This signals anticipated pressure on profitability.
• Future P/E Ratio: Reduced from 32.05x to 31.32x. This implies a modest contraction in expected earnings multiples.