Assessing Equifax Shares After 18% Drop and New Credit Reporting Partnerships in 2025

If you own Equifax stock or are thinking about jumping in, you are probably feeling a little caught between curiosity and caution right now. The company’s shares have had a bit of a rollercoaster run lately, and that can make it tough to know what your next move should be. Over the last year, Equifax dropped nearly 18.4%, while short-term returns look choppy too, with a -2.6% move in just the last week. But zoom out, and the longer view feels quite different. Over the past three and five years, Equifax has actually delivered impressive gains of 54.4% and 51.0% respectively. Clearly, shifts in the broader credit and data markets have influenced risk sentiment toward this stock.

There is plenty to unpack about the company’s future growth and its current price tag. In fact, Equifax’s valuation score, a composite measure that checks whether the stock is undervalued on six key metrics, currently stands at 3. That means Equifax appears undervalued in three out of six checks, hinting at some upside for value-focused investors.

So how do you figure out whether Equifax is actually a bargain? In the next section, I will dig deeper into the main valuation approaches and what they say about Equifax’s potential. Stick around as at the end, I will show you an even more insightful lens for evaluating value that many investors overlook.

Why Equifax is lagging behind its peers

Approach 1: Equifax Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's true value by forecasting its future cash flows and then discounting those flows back to today's value. This approach helps assess whether a stock’s current price reflects its actual earnings power over time.

For Equifax, the DCF analysis starts with its most recent Free Cash Flow of $800 Million. Analysts provide projections for the next five years, after which future growth is based on careful extrapolations. By 2029, Free Cash Flow is projected to reach just over $2 Billion, highlighting strong anticipated financial performance.

Based on these projections, the model calculates Equifax’s intrinsic value at $362.69 per share. Comparing this to the market price, the DCF approach suggests Equifax is trading at a 37.4% discount to its intrinsic value. This may indicate it is significantly undervalued right now.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Equifax.

Our Discounted Cash Flow (DCF) analysis suggests Equifax is undervalued by 37.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Equifax Price vs Earnings (PE Ratio)

For profitable companies like Equifax, the Price-to-Earnings (PE) ratio is often the go-to metric for valuation. The PE ratio helps investors understand how much they are paying for each dollar of current earnings, making it especially meaningful when a company is generating consistent profits.

Growth expectations and risk play a major role in what counts as a "normal" or "fair" PE ratio. A company with higher growth prospects or lower risk can typically command a higher PE, while those facing uncertainty or industry headwinds might deserve a lower multiple.

Currently, Equifax trades at a PE ratio of 44x. To give context, the average PE for its Professional Services industry peers is 25x, with direct peers averaging around 34x. These comparisons suggest Equifax is priced above the sector norm. However, there is more nuance when predicting what the ideal multiple should be for this specific company.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio is a tailored metric that factors in not just the industry and peers, but also Equifax’s specific earnings growth, profit margins, scale, and risks. It aims to calculate what multiple the company truly deserves rather than leaning only on averages.

For Equifax, the Fair Ratio is 35x, which is notably lower than its current 44x PE. This suggests that compared with its fundamentals and outlook, the stock may be overvalued based on this key multiple, despite its premium growth positioning.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Equifax Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, intuitive method of investment analysis that lets you attach your personal story and expectations about a company, such as where you think its fair value, revenues, earnings, and margins are headed, to a customized financial forecast. Narratives seamlessly connect your view of Equifax’s future to a calculated fair value, making it much easier to see if the current price matches your outlook or if there is a buying or selling opportunity.

Available to millions of investors on the Simply Wall St Community page, Narratives are easy for anyone to use. They do not just capture your perspective; they also auto-update as fresh news or earnings come in, ensuring your forecast is always aligned with the latest information. For example, when considering Equifax, one group of investors may build a bullish Narrative around robust government verification growth, cloud migration, and a projected price target of $300, while others may focus on risks like litigation, macro uncertainty, and project a more cautious value as low as $240. Narratives let you see these different possibilities in one place and make confident, well-informed decisions based on your personal investment thesis.

Do you think there's more to the story for Equifax? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com