Equifax - "The Big Three" (BUY - 170)

Equifax Inc. provides information solutions and human resources business process outsourcing services for businesses, governments, and consumers. The company operates through four segments: U.S. Information Solutions (USIS), International, Workforce Solutions, and Global Consumer Solutions.

The USIS segment offers consumer and commercial information services, such as credit information and credit scoring, credit modeling and portfolio analytics, locate, fraud detection and prevention, identity verification, and other consulting; mortgage loan origination information; financial marketing; and identity management services.

The International segment provides information service products, which include consumer and commercial services, such as credit and financial information, and credit scoring and modeling; and credit and other marketing products and services, as well as offers information, technology, and services to support debt collections and recovery management.

The Workforce Solutions segment provides employment, income, and social security number verification services; and payroll-based transaction and employment tax management services. The Global Consumer Solutions segment offers credit information, credit monitoring, and identity theft protection products directly to consumers through Internet.

The company serves customers in financial service, mortgage, employers, consumer, commercial, telecommunication, retail, automotive, utility, brokerage, healthcare, and insurance industries, as well as state and federal governments.

The company operates in the United States, Canada, Australia, New Zealand, India, the United Kingdom, Spain, Portugal, Argentina, Chile, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru, Uruguay, Brazil, the Republic of Ireland, Russia, India, Cambodia, Malaysia, Singapore, and the United Arab Emirates.

Equifax Inc. was founded in 1899 and is headquartered in Atlanta, Georgia.

Equifax share price, revenues, EV, gross margin

Equifax is another consumer credit rating agency, that is among the "Big Three". Share price has been stuck in a range the last couple years, due to declining gross-margin and slightly lower revenue growth.

In September of 2017, Equifax announced a data breach that exposed the personal information of 147 million people. Share price tumbled as a response, and has been subdued due to ongoing compensatory claims of affected individuals, via the Federal Trade Commission. 


However, this isn't a reason for concern due to the position of Equifax being a part of a global oligopoly, that is set to continue to dominate throughout the world the coming years. Furthermore, once all claims of the data-breach have been dealt with, the share price is set to rise in accordance with the constituent fundamentals of the company.

Main growth areas for Equifax are emerging markets as more people get access to financial services, which increases the demand for consumer credit ratings, benefiting Equifax.

Consensus EBITDA projections, 2019, 2020 and 2021

Given the solid fundamentals of Equifax, and their oligopolistic position, compounded by the fact that a resolution to the data-breach 2017 being imminent, we see reason for the stock to be propelled higher.

Therefore, we set a target price for Equifax for 170$ until Q2, 2020.