Equifax (EFX): Assessing Valuation Following Strong Q2 Results and Upbeat Guidance for 2025

Equifax (NYSE:EFX) just delivered an upbeat surprise with its second-quarter 2025 results, topping both earnings and revenue estimates and immediately lifting guidance for the quarters ahead. Management now projects higher revenue and adjusted EPS for both Q3 and the full year, which underscores their conviction in the company’s positive momentum. For investors watching the stock, this signals a potential shift in sentiment and may prompt a closer look at whether recent moves set the stage for the next leg up or if caution is warranted.

After a tough year that saw Equifax shares drop about 15%, the recent results and raised outlook have been a welcome change for holders searching for signs of a turnaround. Over the past month the stock has rebounded by about 4%, trimming some of the losses from the last three months. The improvement comes alongside other company developments such as a continued commitment to dividends and expanding technology partnerships, suggesting a mix of defensive strength with growth ambitions. Still, the share price continues to lag its three- and five-year returns, which hints that market optimism is only slowly catching up to fundamental progress.

Now, with expectations reset and management talking up future growth, investors may be asking whether Equifax is trading at an attractive valuation or if the recent optimism is already reflected in the price.

Most Popular Narrative: 9.1% Undervalued

According to community narrative, Equifax is currently trading below its estimated fair value. This suggests analysts see upside potential based on future growth expectations and market trends that are factored into the latest discounted cash flow calculations. The narrative consensus points to a fair value target that is meaningfully above the current price. This highlights analyst optimism about the company’s long-term positioning and earnings outlook.

Analysts are assuming Equifax's revenue will grow by 10.0% annually over the next 3 years. Structural expansion of government verification requirements (for example, semiannual redeterminations, added work requirements, and a focus on improper payments) and a rising total addressable market for eligibility verification services are expected to benefit long-term revenue growth and reduce business cyclicality as Equifax's solutions become more critical to federal and state programs.

Wondering how Equifax manages to shake off short-term ups and downs? The answer lies in bold revenue assumptions, profit margin targets, and a long runway fueled by essential new services. Curious about which game-changing catalysts are propelling this valuation and what future numbers could make or break the bullish case? Take a closer look at the surprising factors driving this narrative fair value.

Result: Fair Value of $280.5 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent legal costs and unpredictable government budgets could still dampen Equifax’s upside and present challenges for even the most optimistic analyst forecasts.

Find out about the key risks to this Equifax narrative.

Another View: Earnings Multiple Raises a Red Flag

While the discounted cash flow model points to undervaluation, a look at Equifax’s earnings multiple against the industry average suggests the shares may actually be pricey. Which approach better captures the true story in this situation?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Equifax for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Equifax Narrative

If you think there’s another angle to the Equifax story or want to dive into the numbers on your own terms, you can explore and build your own in just a few minutes, or simply do it your way.

A great starting point for your Equifax research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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