Intrinsic Value Equifax Inc. (0II3.L)

• Previous Close: £201.29
• Intrinsic Value: £101.24
• Upside potential: -50%

Stock Valuation Context

Business Model And Market Position

Equifax Inc. operates as a global data, analytics, and technology company specializing in information solutions for businesses, governments, and consumers. The company’s core revenue model is driven by its three key segments: Workforce Solutions, U.S. Information Solutions (USIS), and International. Workforce Solutions provides employment verification, payroll processing, and identity protection services, catering primarily to employers and government agencies. USIS focuses on credit reporting, fraud detection, and financial marketing services, serving financial institutions, mortgage lenders, and other industries. The International segment extends these offerings globally, with a presence in over 20 countries, emphasizing credit scoring and debt recovery services. Equifax holds a dominant position in the credit reporting industry, competing with Experian and TransUnion, and leverages its vast proprietary datasets to deliver actionable insights. Its diversified client base across financial services, healthcare, and telecommunications underscores its resilience to sector-specific downturns. The company’s strategic investments in AI and cloud-based platforms enhance its competitive edge, positioning it as a leader in data-driven decision-making tools.

Revenue Profitability And Efficiency

Equifax reported revenue of $5.68 billion for the fiscal year, with net income of $604.1 million, reflecting a net margin of approximately 10.6%. The company generated $1.32 billion in operating cash flow, demonstrating strong cash conversion capabilities. Capital expenditures totaled $511.5 million, indicating ongoing investments in technology and infrastructure to support growth initiatives.

Earnings Power And Capital Efficiency

Diluted EPS stood at $4.84, highlighting the company’s ability to translate top-line growth into shareholder returns. Equifax’s capital efficiency is supported by its scalable data platforms, which require incremental investment to expand services. The company’s beta of 1.675 suggests higher volatility relative to the market, reflecting sensitivity to economic cycles impacting credit demand.

Balance Sheet And Financial Health

Equifax maintains a solid balance sheet with $169.9 million in cash and equivalents, though its total debt of $5.01 billion indicates a leveraged position. The company’s ability to service debt is supported by consistent operating cash flows, but investors should monitor debt levels relative to earnings stability in fluctuating economic conditions.

Growth Trends And Dividend Policy

Equifax has demonstrated steady growth, driven by expansion in workforce solutions and international markets. The company pays a dividend of $1.67 per share, offering a modest yield, with a focus on reinvesting profits into strategic acquisitions and technology upgrades to sustain long-term growth.

Valuation And Market Expectations

With a market capitalization of $32.38 billion, Equifax trades at a premium, reflecting its leadership in credit data and analytics. Investors appear to price in continued growth in high-margin segments, particularly workforce solutions and international expansion, despite macroeconomic headwinds.

Strategic Advantages And Outlook

Equifax’s competitive advantages lie in its extensive data assets, global footprint, and investments in AI-driven analytics. The company is well-positioned to capitalize on increasing demand for credit and identity verification services, though regulatory scrutiny and economic downturns remain key risks. Strategic acquisitions and technology adoption will likely drive future performance.

Sources

Company filings, Bloomberg