Latest news with #EFX
Yahoo
2 days ago
- Business
- Yahoo
Is There An Opportunity With Equifax Inc.'s (NYSE:EFX) 20% Undervaluation?
Key Insights Using the 2 Stage Free Cash Flow to Equity, Equifax fair value estimate is US$311 Equifax's US$248 share price signals that it might be 20% undervalued Analyst price target for EFX is US$281 which is 9.8% below our fair value estimate Today we will run through one way of estimating the intrinsic value of Equifax Inc. (NYSE:EFX) by taking the forecast future cash flows of the company and discounting them back to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. It may sound complicated, but actually it is quite simple! Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Is Equifax Fairly Valued? We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF ($, Millions) US$1.18b US$1.47b US$1.90b US$1.90b US$1.92b US$1.95b US$1.99b US$2.03b US$2.08b US$2.14b Growth Rate Estimate Source Analyst x7 Analyst x6 Analyst x1 Analyst x1 Est @ 0.92% Est @ 1.57% Est @ 2.02% Est @ 2.34% Est @ 2.56% Est @ 2.72% Present Value ($, Millions) Discounted @ 7.3% US$1.1k US$1.3k US$1.5k US$1.4k US$1.3k US$1.3k US$1.2k US$1.2k US$1.1k US$1.1k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$13b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.1%. We discount the terminal cash flows to today's value at a cost of equity of 7.3%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = US$2.1b× (1 + 3.1%) ÷ (7.3%– 3.1%) = US$53b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$53b÷ ( 1 + 7.3%)10= US$26b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$39b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$248, the company appears a touch undervalued at a 20% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Important Assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Equifax as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.3%, which is based on a levered beta of 0.909. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Equifax SWOT Analysis for Equifax Strength Earnings growth over the past year exceeded its 5-year average. Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Weakness Earnings growth over the past year underperformed the Professional Services industry. Dividend is low compared to the top 25% of dividend payers in the Professional Services market. Opportunity Annual earnings are forecast to grow faster than the American market. Trading below our estimate of fair value by more than 20%. Threat Annual revenue is forecast to grow slower than the American market. Looking Ahead: Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For Equifax, there are three fundamental items you should look at: Risks: Take risks, for example - Equifax has 1 warning sign we think you should be aware of. Future Earnings: How does EFX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
Business Insider
4 days ago
- Health
- Business Insider
Akero Therapeutics' efruxifermin shows efficacy in Phase 2b MASH, fibrosis trial
Akero Therapeutics (AKRO) announced publication of 96-week final results from the Phase 2b HARMONY trial in The Lancet in adults with biopsy-confirmed metabolic dysfunction-associated steatohepatitis – MASH – and moderate or advanced fibrosis. Continued treatment with EFX from 24 to 96 weeks resulted in more participants exhibiting improvements in fibrosis and MASH, such that there was near complete reversal of disease in almost one-third of participants treated with the 50mg dose of EFX. In the modified intent-to-treat population at week 96, 49% of participants who received 50mg EFX achieved at least one stage fibrosis improvement without worsening of MASH evaluated by liver histology – the primary endpoint -, vs. 19% for placebo. The secondary endpoint of MASH resolution without fibrosis worsening was achieved by 40% of participants receiving 28mg EFX and 37% receiving 50mg EFX in the mITT population at week 96, vs. 19% for placebo. A composite endpoint of both MASH resolution and greater than or equal to1-stage fibrosis improvement was met by 35% and 28% of participants in the 50mg and 28mg EFX treatment groups, respectively, vs. 7% for placebo. EFX was generally well tolerated, with a safety profile consistent with previous trials. Confirmation of these potential benefits of EFX is being evaluated in the ongoing Phase 3 SYNCHRONY clinical trial program. Elevate Your Investing Strategy:
Globe and Mail
29-07-2025
- Business
- Globe and Mail
Fiserv Q2 Earnings Beat Estimates on Strong Margins, Revenues Miss
Fiserv, Inc. FI delivered mixed second-quarter 2025 results on the back of a robust segmental revenue performance and strong margins. The earnings beat, however, failed to impress the market as the company's shares declined 15.7% since the release of results on July 23. FI's adjusted earnings per share of $2.47 beat the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion missed the consensus estimate by a slight margin but gained 8.6% on a year-over-year basis. Processing and services revenues of $4.3 billion increased 4% year over year. This falls short of our estimate of $4.5 billion. The product segment's revenues were $1.2 billion, up 25.3% from the same quarter last year. This exceeds our estimate of $1.1 billion. Merchant Solutions' revenues reached $2.6 billion, a 9.7% increase from the previous year. However, this is below our estimate of $2.8 billion. Revenues of this segment were driven by Clover growth through new products, new markets, new partners and new geographies. Furthermore, continued scaling of the company's industry-leading distribution, adding new and existing enterprise merchant clients to its Commerce Hub platform, and driving VAS penetration improved the segment's performance. The Financial Solutions segment reported revenues of $2.6 billion, a 7.2% rise from the year-ago quarter. This exceeds our estimate of $2.5 billion. Strong growth in Zelle transactions, increasing demand for real-time payments, and rising transaction volumes of STAR and ACCEL debit networks drove revenues in this segment. Currently, Fiserv carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Recent Earnings Snapshots IQVIA Holdings Analytics Inc. IQV reported impressive second-quarter 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. IQV posted adjusted earnings of $2.81 per share, beating the Zacks Consensus Estimate by 1.8% and rising 6.4% on a year-over-year basis. The top line amounted to $4 billion, which surpassed the consensus estimate by 1.5% and grew 5.3% from the year-ago quarter. Equifax Inc. EFX reported impressive second-quarter 2025 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate. EFX registered adjusted earnings of $2 per share, surpassing the Zacks Consensus Estimate by 4.2% and increasing 9.9% from the year-ago quarter. The company registered revenues of $1.5 billion, beating the consensus estimate by 1.5% and increasing 7.4% on a year-over-year basis. Higher. Faster. Sooner. Buy These Stocks Now A small number of stocks are primed for a breakout, and you have a chance to get in before they take off. At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We've combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month. You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days. Download the report free now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Equifax, Inc. (EFX): Free Stock Analysis Report Fiserv, Inc. (FI): Free Stock Analysis Report IQVIA Holdings Inc. (IQV): Free Stock Analysis Report
Yahoo
26-07-2025
- Business
- Yahoo
Equifax (NYSE:EFX) Is Experiencing Growth In Returns On Capital
To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, we've noticed some promising trends at Equifax (NYSE:EFX) so let's look a bit deeper. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. What Is Return On Capital Employed (ROCE)? If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Equifax is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.11 = US$1.1b ÷ (US$12b - US$1.9b) (Based on the trailing twelve months to June 2025). Thus, Equifax has an ROCE of 11%. In isolation, that's a pretty standard return but against the Professional Services industry average of 14%, it's not as good. View our latest analysis for Equifax In the above chart we have measured Equifax's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Equifax . What Can We Tell From Equifax's ROCE Trend? Equifax is displaying some positive trends. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 11%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 39%. So we're very much inspired by what we're seeing at Equifax thanks to its ability to profitably reinvest capital. What We Can Learn From Equifax's ROCE A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Equifax has. And with a respectable 57% awarded to those who held the stock over the last five years, you could argue that these developments are starting to get the attention they deserve. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. On a separate note, we've found 1 warning sign for Equifax you'll probably want to know about. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
23-07-2025
- Business
- Yahoo
Equifax Inc (EFX) Q2 2025 Earnings Call Highlights: Record Revenue and Strategic Growth Amid ...
Revenue: $1.54 billion, up 8% in constant currency and 7% reported. Adjusted EPS: $2 per share, $0.10 above the midpoint of April guidance. Adjusted EBITDA Margin: 32.5%. Workforce Solutions Revenue: Up 8%, with Verifier revenue growth at 10%. USIS Revenue: Up 9%, with non-mortgage revenue growth over 4%. International Revenue Growth: 6% in constant currency. Share Repurchase: $127 million under a $3 billion program. Free Cash Flow: $239 million in Q2 2025. Vitality Index: 14%, 400 basis points above long-term framework. Full Year Revenue Guidance Increase: $35 million due to FX impact. Full Year Adjusted EPS Guidance Increase: $0.03 per share due to FX impact. Warning! GuruFocus has detected 3 Warning Sign with EFX. Release Date: July 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Equifax Inc (NYSE:EFX) reported its highest ever quarterly revenue of $1.54 billion, up 8% in constant currency. Adjusted EPS of $2 per share exceeded the midpoint of guidance by $0.10, driven by strong revenue growth and cost management. The company saw strong performance in its Workforce Solutions segment, with revenue up 8%, led by double-digit growth in government and consumer lending. Equifax Inc (NYSE:EFX) increased its Vitality outlook for 2025 from 11% to 12%, indicating strong new product innovation and growth potential. The company repurchased $127 million in shares under its new $3 billion share repurchase program, demonstrating a commitment to returning value to shareholders. Negative Points The mortgage market remains weak, with hard mortgage credit inquiries down about 8.5% year-over-year. Economic uncertainty, including inflation and tariffs, is impacting hiring trends, leading to a weaker talent market. International revenue growth was slightly below expectations due to economic weakness in Canada. Higher litigation costs are impacting corporate expenses, with expectations of continued elevated levels in the second half of 2025. The government segment faces near-term volatility due to changes in federal program structures and funding, impacting revenue growth. Q & A Highlights Q: Can you give some more perspective on the TWN state agency headwinds? Is this more headwinds tied to the programs that are impacted by the federal government data expense subsidization changes? Or is it something else? A: Yes, Jeff, that is the challenge that we're still feeling from the changes the Biden administration made in 2024 around some of the data reimbursements. It's a little bit dynamic as the states are dealing with contract timing that happens throughout the year. Some states are able to sort through it with their budgets, while others are taking longer. We are seeing momentum in commercial discussions, which we hope will be fruitful in the second half, but those aren't contracted yet. Q: What are the new mortgage pre-qual products that are already driving strength for share in the quarter? A: We've been in the marketplace with the TWN indicator for about six months. The discussions are positive, and there isn't a single mortgage originator that isn't interested in the solution. It's helping us commercially win some share in the pre-qual, preapproval stage. We expect the TWN indicator to take hold as we get into the second half of 2026. Q: What is mortgage revenue as a percentage of total revenues in the second quarter just reported? And what are you seeing in terms of non-mortgage lender and consumer credit activity? A: Mortgage revenue was 22% of total revenues, flat from previous periods. In terms of non-mortgage, auto has remained relatively strong, and FI is expected to be stronger in the third quarter. We expect other businesses to continue performing well, with improvements across commercial and some payment spaces. Q: I wanted to revisit the government business again. What exactly changed in the second half of the year? A: It's not a single state issue. It's dynamic and challenging due to changes made last year in the prior administration around cost sharing between the federal and state governments. States have different contractual periods, and we don't always know how they will respond. Most states are in deficit positions, which impacts their ability to fund additional costs. Q: Can you talk about Vantage score and what you're expecting in terms of price competition in the mortgage market? A: It's early to determine the impact of Vantage score on price competition. We have access to Vantage Score and will work with our customers around that as an option. Conversations are new and will unfold as we go through the second half of the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data
