Will Equifax (EFX) Fall Short of Earnings Estimates in Q1? - Analyst Blog
Equifax Inc. EFX is scheduled to report first-quarter 2015 results on Apr 22. Last quarter, the company’s earnings came in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Factors to Consider
Equifax reported modest fourth quarter numbers, with the top line surpassing the Zacks Consensus Estimate and the bottom line just meeting the mark. The company’s revenues increased on a year over year basis aided by strong growth across its business segments.
Management’s efforts such as strategic initiatives for product innovation, expansion of data assets through acquisitions and continuous share gains in North America raise optimism.
Also, the company’s strong correlation to consumer and financial markets as well as its U.S. and European exposure are likely to propel growth going ahead. However, competition from the likes of Automatic Data Processing Inc., Fiserv Inc., Moody’s Corp. and uncertainty in the mortgage sector raise concerns.
Earnings Whispers?
Our proven model does not conclusively show that Equifax is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: ESP for Equifax is -0.98%. This is because the Most Accurate estimate stands at $1.01 per share, lower than the Zacks Consensus Estimate of $1.02 per share.
Zacks Rank: Equifax’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Broadcom Corp. BRCM, with an Earnings ESP of +5.00% and a Zacks Rank #1 (Strong Buy)
Apple Inc. AAPL, with an Earnings ESP of +2.79% and a Zacks Rank #2 (Buy)
Facebook, Inc. FB, with an Earnings ESP of +8.33% and a Zacks Rank #2
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