Equifax shares fell by -1.1% during the day's morning session, and are now trading at a price of $226.44. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
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 15.92 and an average price to book (P/B) ratio of 1.78. In contrast, Equifax has a trailing 12 month P/E ratio of 42.8 and a P/B ratio of 5.62.
Equifax has moved -14.7% over the last year compared to 17.9% for the S&P 500 — a difference of -32.6%. Equifax has a 52 week high of $281.07 and a 52 week low of $199.98.
Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,508 | $4,128 | $4,924 | $5,122 | $5,265 | $5,681 |
| Interest Income (M) | $112 | $142 | $146 | $183 | $241 | $215 |
| Operating Margins | -10% | 16% | 23% | 21% | 18% | 18% |
| Net Margins | -11% | 13% | 15% | 14% | 10% | 11% |
| Net Income (M) | -$384 | $520 | $744 | $696 | $545 | $604 |
| Depreciation & Amort. (M) | $331 | $391 | $480 | $560 | $611 | $670 |
| Diluted Shares (M) | 122 | 123 | 124 | 123 | 124 | 125 |
| Earnings Per Share | -$3.15 | $4.24 | $6.02 | $5.65 | $4.4 | $4.84 |
| EPS Growth | n/a | 234.6% | 41.98% | -6.15% | -22.12% | 10.0% |
| Avg. Price | $123.86 | $152.91 | $231.95 | $214.59 | $247.29 | $229.02 |
| P/E Ratio | -38.95 | 35.73 | 37.96 | 37.71 | 55.7 | 46.93 |
| Free Cash Flow (M) | -$86 | $525 | $866 | $133 | $516 | $813 |
| CAPEX (M) | $400 | $421 | $469 | $624 | $601 | $512 |
| EV / EBITDA | -4175.53 | 20.94 | 21.12 | 20.23 | 23.81 | 19.83 |
| Total Debt (M) | $3,406 | $5,503 | $6,150 | $6,784 | $6,705 | $5,725 |
| Net Debt / EBITDA | -698.81 | 3.58 | 3.66 | 4.02 | 4.2 | 3.25 |
| Current Ratio | 0.89 | 1.0 | 0.49 | 0.68 | 0.67 | 0.75 |
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 a strong EPS growth trend. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.75. Finally, we note that Equifax has significant leverage levels.
