Equifax Inc

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EFX : NYSE : Financial
$120.27 -0.04 | -0.033%
Today's Range: 119.58 - 121.72
Avg. Daily Volume: 892300.0
01/17/17 - 11:33 AM ET

Financial Analysis


EQUIFAX INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. EQUIFAX INC has very weak liquidity. Currently, the Quick Ratio is 0.44 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 23.25% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)804.2667.4
EBITDA ($mil)289.1223.7
EBIT ($mil)218.4174.3
Net Income ($mil)132.8117.9


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)135.3142.4
Total Assets ($mil)6806.64541.4
Total Debt ($mil)2843.01332.7
Equity ($mil)2746.12227.9


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin64.1966.06
EBITDA Margin35.9433.51
Operating Margin27.1626.12
Sales Turnover0.440.58
Return on Assets7.019.14
Return on Equity17.3918.63
Debt Q3 FY16 Q3 FY15
Current Ratio0.510.84
Debt/Capital0.510.37
Interest Expense24.315.8
Interest Coverage8.9911.03


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)119.6118.3
Div / share0.330.29
EPS1.090.98
Book value / share22.9618.83
Institutional Own % n/a n/a
Avg Daily Volume894275.0570051.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 36.22 for the Professional Services industry and a premium compared to the S&P 500 average of 25.49. To use another comparison, its price-to-book ratio of 5.26 indicates a significant premium versus the S&P 500 average of 2.84 and a significant discount versus the industry average of 7.45. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, EQUIFAX INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EFX 30.60 Peers 36.22   EFX 19.81 Peers 17.42

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

EFX is trading at a discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

EFX is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
EFX 20.01 Peers 20.37   EFX 0.56 Peers 6.07

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

EFX is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

EFX trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EFX 5.26 Peers 7.45   EFX 15.16 Peers 62.78

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

EFX is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, EFX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EFX 4.80 Peers 3.70   EFX 14.80 Peers 33.26

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

EFX is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

EFX significantly trails its peers on the basis of sales growth

 

 

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