Equifax (EFX), the consumer credit reporting agency, has seen its shares deliver around 33% in gains year-to-date. Since the outbreak of the pandemic, an increase in demand for cloud-based applications and tools has been evident. Equifax collects and compiles information on over 800 million individual consumers and more than 88 million businesses globally.
Notably, several financial institutions, corporations, government agencies, and individuals rely on the comprehensive insights offered by the company’s products and services, to make important financial decisions with confidence.
Recently, the company reported its second-quarter earnings results, which topped analysts’ expectations. The company reported earnings of $1.74 per share, which more than doubled on a year-over-year basis and outpaced consensus estimates of $1.71. Revenues of $1.23 billion jumped 26% and beat the consensus estimate of $1.16 billion.
Following the results, Needham analyst Kyle Peterson maintained a Buy rating on the stock and increased the price target to $288 (15.3% upside potential) from $260.
Peterson’s analysis stated that the Q2 results beat were primarily due to record revenues, aided by strong Equifax Workforce Solutions (EWS) performance and the non-mortgage USIS business lines growth.
Given Equifax’s “continued ability to significantly outperform the US mortgage market, accelerating growth in non-mortgage businesses, and opportunities to enhance EPS growth through share repurchases and tuck-in M&A,” the analyst maintained his bullish stance on the stock.
For FY22 and beyond, Peterson expects that the addition of a large payroll processor to the TWN database and the impending deal with the SSA might act as catalysts for growth. (See Equifax stock charts on TipRanks)
Following the company’s above-consensus Q3 revenue outlook and updated full-year FY21 outlook, the analyst raised his price target “to reflect the strong operating momentum.”
Overall, Peterson believes that the risk-reward of the company is favorable, “given the accelerating organic growth, especially within the non-mortgage business lines.”
On TipRanks, Equifax is a Moderate Buy based on 4 Buy and 5 Hold ratings. The average Equifax price target of $253.89 implies upside potential of 1.7% from current levels.
According to the new TipRanks’ Risk Factors tool, Equifax stock is at risk mainly from two factors: Tech & Innovation, and Legal and Regulatory, which contribute 30% and 19%, respectively, to the total risk for the stock. Within the Tech & Innovation risk category, EFX has 8 risks, details of which can be found on the TipRanks website.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your analysis before making any investment.
