It hasn't been a great morning session for Equifax investors, who have watched their shares sink by -3.9% to a price of $252.01. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Equifax's Valuation Is in Line With Its Sector Averages:
Equifax Inc. operates as a data, analytics, and technology company. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 20.04 and an average price to book (P/B) ratio of 1.86. In contrast, Equifax has a trailing 12 month P/E ratio of 55.9 and a P/B ratio of 6.36.
Equifax has moved 27.8% over the last year compared to 31.8% for the S&P 500 — a difference of -4.0%. Equifax has a 52 week high of $309.63 and a 52 week low of $202.2.
Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,412 | $3,508 | $4,128 | $4,924 | $5,122 | $5,265 |
| Interest Income (M) | $104 | $112 | $142 | $146 | $183 | $241 |
| Operating Margins | 13% | -10% | 16% | 23% | 21% | 18% |
| Net Margins | 9% | -11% | 13% | 15% | 14% | 10% |
| Net Income (M) | $310 | -$384 | $520 | $744 | $696 | $545 |
| Depreciation & Amort. (M) | $310 | $331 | $391 | $480 | $560 | $611 |
| Diluted Shares (M) | 121 | 122 | 123 | 124 | 123 | 124 |
| Earnings Per Share | $2.56 | -$3.15 | $4.24 | $6.02 | $5.65 | $4.4 |
| EPS Growth | n/a | -223.05% | 234.6% | 41.98% | -6.15% | -22.12% |
| Avg. Price | $113.25 | $123.86 | $152.91 | $231.95 | $214.59 | $250.19 |
| P/E Ratio | 43.9 | -38.95 | 35.73 | 37.96 | 37.71 | 56.35 |
| Free Cash Flow (M) | $350 | -$86 | $525 | $866 | $133 | $516 |
| CAPEX (M) | $322 | $400 | $421 | $469 | $624 | $601 |
| EV / EBITDA | 21.15 | -4175.53 | 20.94 | 21.12 | 20.23 | 24.04 |
| Total Debt (M) | $2,660 | $3,406 | $5,503 | $6,150 | $6,784 | $6,705 |
| Net Debt / EBITDA | 3.21 | -698.81 | 3.58 | 3.66 | 4.02 | 4.2 |
| Current Ratio | 1.09 | 0.89 | 1.0 | 0.49 | 0.68 | 0.67 |
Equifax has growing revenues and increasing reinvestment in the business and generally positive cash flows. Additionally, the company's financial statements display decent operating margins with a positive growth rate and positive EPS growth. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.67. Finally, we note that Equifax has significant leverage levels.
