Equifax Inc (EFX)

Conclusion

Equifax Inc is a data, analytics and technology company. Its three segments are Workforce Solutions, U.S. Information Solutions and International, covering credit information, identity verification, employment and income verification, and payroll automation. On 2026-11-09 the share traded at 188.33 USD, giving a market capitalisation of 22.1 billion USD and an enterprise value of 27.1 billion USD.

The verdict is fair. The fair value band runs from 166.98 to 250.47 USD with a midpoint of 208.72 USD, a margin of safety of 10.8% at the current price. Today's multiples sit below their own ten-year medians: the P/E is 29.8 against a median of 36.7, a premium of -18.9%, and EV/EBITDA is 13.5 against 19.3, a premium of -29.9%. The DCF gives 139.87 USD per share at a discount rate of 11.27%, well below the price. The reverse DCF implies revenue growth of 11.3% a year, against a five-year revenue CAGR of 8.0%, so the price assumes faster growth than the company has delivered.

Three numbers support the case: free cash flow conversion of 1.49x over the trailing twelve months, a Piotroski score of 8 out of 9, and an Altman Z-score of 3.49. Three numbers weaken it: the three-year EPS CAGR of -2.0%, ROIC of 9.8% against a WACC of 9.8% (a difference of -0.06%), and net debt of 2.5x EBITDA. Analysts have also cut next-year estimates in 15 revisions over the last 30 days, with none raised.

Financial health

Financial strength is yellow: the Altman Z-score is assessed good, while net debt to EBITDA, interest coverage and the current ratio are neutral. The current ratio is 1.09 and the quick ratio 0.89, while net debt to EBITDA is 2.5x and interest coverage 5.4x. Debt to equity is 1.16x. The Altman Z-score of 3.49 falls in the safe zone, though the model was designed for manufacturers and Equifax is a data business. Insolvency risk is low, about 0.9% by the estimate of the Ohlson model over one to two years. Debt to revenue growth over five years is -5.0%, so borrowing has not grown faster than sales.

Earnings quality

Earnings quality is green, held up by free cash flow conversion, the Piotroski score and the share count. Free cash flow conversion is 1.49x on a trailing basis and 1.07x over five years. The accrual ratio is -0.08, which means cash generation runs ahead of reported earnings. Stock-based compensation is 1.4% of revenue, and free cash flow after it is 1.02 billion USD. The share count has grown at a compound rate of only 0.2% over five years. The Piotroski score is 8 out of 9. The Beneish M-score is not available. The company beat estimates in 7 of the last 8 quarters, with an average surprise of 4.4%. Estimates are being cut: the current-year estimate changed by -0.6% over 90 days, and the next-year estimate by -5.7%.

Profitability

Profitability is green, with operating and net margins assessed good. The operating margin is 18.8% against a ten-year median of 18.2%, and the net margin is 11.3% against 11.7%. The gross margin is 55.2% against a median of 57.6%. Operating margin stability over the period is 0.57. ROIC is 9.8% against a WACC of 9.8%, a difference of -0.06%, which is neutral: the business earns roughly its cost of capital. The five-year median ROIC is 8.7%. Return on equity is 16.6%, but the DuPont split shows leverage at work. The net margin is 10.9%, asset turnover 0.51 and the equity multiplier 2.58x, so most of the return on equity comes from borrowing rather than from operating efficiency.

Growth

Growth is green: revenue growth is assessed good and revenue has risen in all ten of the last ten years. Revenue compounds at 5.9% over three years, 8.0% over five and 8.6% over ten. Earnings per share are weaker, with a compound rate of -2.0% over three years, 4.7% over five and 4.1% over ten; the three-year figure is the neutral signal. Free cash flow per share compounds at 104.1% over three years, 16.4% over five and 6.4% over ten. The three-year figure is far above the other periods and should not be read as a trend. The next-year EPS estimate implies growth of 12.1%, but estimates are being revised down.

Valuation

Valuation is yellow, with the verdict neutral on a margin of safety of 10.8%. Today's multiples sit below their ten-year medians: P/E 29.8 against 36.7 (a premium of -18.9%), EV/EBITDA 13.5 against 19.3 (-29.9%), P/FCF 20.0 against 37.1 (-45.9%), P/S 3.4 against 4.9 (-32.2%) and P/B 4.9 against 6.3 (-21.6%). The DCF gives 139.87 USD per share at a discount rate of 11.27%, with 47.7% of its value in the terminal period. The fair value from historical multiples is 277.57 USD. The fair value band is built on fixed assumptions, a 5% equity risk premium and capped growth, and is not a price target. The reverse DCF implies 11.3% growth against 8.0% delivered over five years. The dividend yield is 1.2% and the payout on free cash flow 23.6%.

Risks

If ROIC stays near the WACC of 9.8%, growth will add little value, and the margin of safety rests on the multiples reverting to their medians. Net debt of 2.5x EBITDA leaves less room to absorb a fall in earnings, and interest coverage of 5.4x would narrow if borrowing costs or debt rose. Continued downward estimate revisions, with 15 cuts to next year's estimate in the last 30 days, would make the implied growth of 11.3% harder to reach. The DCF at 139.87 USD sits far below the price, so the valuation depends heavily on the historical multiples and the fair value band. The Beneish M-score is not available. The analysis has no debt maturity schedule and no revenue by segment, so refinancing risk and the contribution of each division cannot be assessed.