Equifax Inc (NYSE:EFX): Earnings Expected To Remain Subdued

Based on Equifax Inc’s (NYSE:EFX) earnings update in March 2018, the consensus outlook from analysts appear bearish, with earnings expected to decline by -0.78% in the upcoming year relative to the past 5-year average growth rate of 14.12%. Currently with a railing-twelve-month profit of US$524.90m, the consensus growth rate suggests that earnings will drop to US$520.80m by 2019. Below is a brief commentary on the longer term outlook the market has for Equifax. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Equifax

Exciting times ahead?

The view from 14 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for EFX, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
NYSE:EFX Future Profit July 24th 18
NYSE:EFX Future Profit July 24th 18
This results in an annual growth rate of 14.59% based on the most recent earnings level of US$587.30m to the final forecast of US$793.80m by 2021. This leads to an EPS of $5.92 in the final year of projections relative to the current EPS of $4.89. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, EFX’s profit margin will have expanded from 17.47% to 20.09%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Equifax, I’ve put together three fundamental aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Equifax worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Equifax is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Equifax? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.