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Equifax (EFX) Rides on Product Strength, Debt Woes Stay

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·3 min read
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Equifax Inc. EFX is currently benefiting from a solid product portfolio and client base diversification.

The company recently reported first-quarter 2021 adjusted earnings of $1.97 per share that beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year.

Product Strength, Diversification are Positives

Equifax serves a wide range of industries, such as financial, mortgage, consumer, employees, telecommunications, automotive, commercial, retail, government, resellers, and others. This diversified client base is extremely beneficial, as it helps the company to handle competition from the likes of Verisk Analytics VRSK, Exponent EXPO and CBIZ CBZ, and balance weakness in any sector with strength in the others.

The company is benefiting from a solid product portfolio and clear understanding of the sectors it serves. Customers find considerable significance in the company’s offerings as they use the credit information, and related analytical services and data to process applications for new credit cards, automobile loans, home and equity loans, and other consumer loans.

We believe synergies from acquisitions, in addition to continued general consumer credit activity, product innovation, initiatives to foster enterprise growth and efficient business executions, will boost Equifax’s revenues over the long run.

Debt Woes Stay

Equifax has a debt-laden balance sheet. Total debt at the end of first-quarter 2021 was $4.38 billion, flat sequentially. The company’s cash and cash equivalent of $766 million at the end of the first quarter was well below this debt level, underscoring that the company doesn’t have enough cash to meet this debt burden. Further, the cash level can't meet the short-term debt of $1.1 billion.

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Equifax, Inc. (EFX) : Free Stock Analysis Report
 
Exponent, Inc. (EXPO) : Free Stock Analysis Report
 
Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report
 
CBIZ, Inc. (CBZ) : Free Stock Analysis Report
 
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Zacks Investment Research