What Should We Expect From Equifax Inc’s (NYSE:EFX) Earnings In The Next Couple Of Years?
The latest earnings announcement Equifax Inc’s (NYSE:EFX) released in December 2017 confirmed that the company experienced a robust tailwind, eventuating to a double-digit earnings growth of 20.15%. Below, I’ve presented key growth figures on how market analysts perceive Equifax’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. View our latest analysis for Equifax
Analysts’ outlook for next year seems pessimistic, with earnings falling by a double-digit -12.71%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates reaching double digit 11.76% compared to today’s level and continues to increase.
While it is useful to be aware of the rate of growth each year relative to today’s level, it may be more valuable gauging the rate at which the business is moving every year, on average. The pro of this approach is that we can get a better picture of the direction of Equifax’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 7.04%. This means that, we can presume Equifax will grow its earnings by 7.04% every year for the next couple of years.
Next Steps:
For Equifax, there are three pertinent factors you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is EFX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EFX is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EFX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
