Shares of Equifax Inc. (EFX) scaled its 52-week high of $79.13 on Aug 26, following the announcement of completed acquisition of India-based NettPositive Business Analytics Pvt. Ltd., which offers business intelligence solutions to the financial services, insurance, retail and telecommunications industries in India, the Middle East and Africa.
The company already holds a majority share in this analytics firm since 2012, and is soon expected to acquire the remaining 49%, subject to approvals. The complete acquisition of NettPositive blends well with Equifax’s business strategy of tapping relevant growth opportunities in emerging markets.
Notably, this leading electronic payment provider has been riding strong growth momentum, with shares rising 5.9% since the company reported second-quarter 2014 results in the third week of July.
Yesterday’s closing price represented a robust one-year return of about 25.8% against a return of 202.2% clocked by the S&P 500 index. Average volume of shares traded over the last three months stands at approximately 326K.
Equifax also maintained its earnings streak in all the past four quarters, with an average beat of 2.2%. On Jul 23, the company reported second-quarter 2014 earnings per share (EPS) of 96 cents, beating the Zacks Consensus Estimate by 2% and the year-ago quarter figure by 5%.
The momentum of this Zacks Rank #2 (Buy) stock has been driven by the company’s strategic growth initiatives, adequate liquidity and competitiveness over other larger players.
Solid Growth Outlook
Equifax’s strong growth guidance raises optimism in the stock. The company’s growth prospects have boosted investors’ sentiment as well.
Management also remains optimistic, as reflected in its EPS projection of 96–99 cents and top-line guidance of $620–625 million in third-quarter 2014. Moreover, Equifax is expected to generate revenues of about $2.44–2.47 billion and EPS of $3.83–3.91 in 2014. The yearly guidance is higher than previously estimated revenues of $2.43–2.48 billion and EPS of $3.75–3.89.