EQUIFAX INC (EFX): what the price requires

At today's price, EQUIFAX INC (EFX) is priced for +21.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-13 · Source: https://boothcheck.com/report/EFX

Headline

FieldValue
TickerEFX
CompanyEQUIFAX INC
Current price$172.11/sh
CompositionWorkforce Solutions 43% / U.S. Information Solutions 34% / International 23%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed12.1%
Operating margin today17.8%
Margin compression implied-5.7pp
Implied growth21.2%
Multiple paid24x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.5pp.

How unusual the bet is: elevated

ReferenceValue
vs own history+1.23σ
cohort percentile (of 16 peers)81
sustained it ~5 years at this level36%
implied end-window share0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.48x5expensive
Earnings2.89x5expensive
Relative1.38x4expensive
Growth0.80x3justifies

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$287.430.60xyesFCF base $1.2B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.5%, 6yr projection
DCF Exit MultipleGrowth$215.940.80xyesExit EV/EBITDA: 11.8x / 13.8x / 15.8x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$109.871.57xyesP/E 17.33x (blended: sector 12x + trailing (TTM) 30x), scenarios: 14.4x / 17.3x / 20.3x (bear / base = sector held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$62.532.75xyesBV/sh $37.59, ROE (TTM) 15.4%, ke 9.3%
Two-Stage Excess ReturnAsset$79.662.16xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$149.551.15xyesRev $6.3B, growth 10% (input: historical growth; tapered), Terminal P/S: 2.7x / 3.3x / 3.9x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$96.241.79xyesEPS $5.68, growth 17% (input: historical EPS growth), PEG=1.76 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$44.513.87xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.08B × (1−27%) / WACC 7.5% → EPV (no growth)
Residual IncomeAsset$81.452.11xyesBV $37.59 + 5yr PV of (ROE (TTM) 15.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$69.312.48xyes√(22.5 × EPS $5.68 × BVPS $37.59) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings$59.522.89xyesFCF $1139.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$51.633.33xyesSBC-adj FCF $1.05B (FCF $1.14B − SBC $0.09B) capitalized at Kₑ
Ben Graham FormulaEarnings$183.270.94xyesEPS $5.68 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$10.9315.75xyesBV $37.59 × (ROIC 2.2% / WACC 7.5%)
P/Sales SectorRelative$156.001.10xyesRevenue $6.28B × sector P/S 3.0x
PEG Fair ValueRelative$144.361.19xyesEPS $5.68 × (PEG 1.5 × growth 16.9% (input: historical EPS growth)) → PE 25.4x
Earnings YieldEarnings$61.412.80xyesEPS $5.68 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$6.2b
Net debt / NOPAT (after-tax)7.66x
Net debt / operating income (pre-tax)5.63x
Interest coverage5.1x
Share count CAGR (buyback)-0.6%
Burning cashno

Bullet Takeaways

Equifax is a data-moat premium: only the growth-DCF reaches the $153.83 price while asset, earnings-power, and peer-multiple frames mark from $46 to $104, the expected fingerprint of a credit and employment-data bureau whose core asset (The Work Number database) sits off the balance sheet.

Workforce Solutions is the crown jewel, growing revenue 10% in the first quarter of 2026 with Verification Services up 14% at a 52.3% adjusted EBITDA margin (up from 50.1%), and total company revenue hit a record $1.649 billion, up 14% and above guidance, with over $1 billion of free cash flow expected in 2026.

The price embeds about 18% annual operating growth for five years (roughly 22x operating income), within the recent pace but demanding in duration; the risks are moat erosion (the company itself calls its market highly competitive), mortgage-cycle and rate sensitivity, privacy regulation, and net debt near 5.4x operating income.

Bull Case

Valuing a credit and data bureau is unlike valuing almost any other industrial: the asset is not on the balance sheet. Equifax's value is its data, a proprietary, accumulated record of credit and, more importantly, employment and income, and accounting captures almost none of it. That is why the asset-based and earnings-power models mark the stock far below the price (the earnings power value frame near $46, the simple excess-return model near $63) while only the growth-DCF reaches $154. For a data monopoly, that pattern is not a warning, it is the expected fingerprint of a moat the static frames cannot price.

The crown jewel is Workforce Solutions, and it is performing like the best business Equifax owns. In the first quarter of 2026 Workforce Solutions revenue grew a strong 10%, with Verification Services up 14% led by mid-double-digit government growth, and it did so at a 52.3% adjusted EBITDA margin, up from 50.1% a year earlier. That margin is the tell of a near-monopoly: The Work Number aggregates payroll records that lenders, employers, and government agencies need and cannot easily get elsewhere, and the 10-K lists employment and income verification services as a distinct, durable product line within the segment mix (FY2025 10-K, accession 0000033185-26-000010). Every new payroll contributor widens the moat, because the database becomes more complete and therefore more valuable to every buyer.

The whole company is compounding and converting to cash. Total first-quarter revenue hit a record $1.649 billion, up 14% and $37 million above the midpoint of guidance, and Equifax expects over $1 billion of free cash flow in 2026 with cash conversion of at least 100%. Inverting the price shows the bet is demanding but not extreme: at about 22x company-wide operating income, the market is asking for roughly 18% annual operating growth for five years, which is within what Equifax has recently delivered, and the multiple sits in the lower half of its peer group (Transunion, Moody's, S&P Global). The bet is on durable compounding from the data moat, and the recent results, especially the margin expansion in Workforce Solutions, are exactly the evidence that the moat is intact and widening.

Bear Case

The moat-erosion question is the one that should keep an Equifax holder up at night, because the company's own filing concedes that its market is contested. The 10-K states that the market for its products and services is highly competitive and subject to constant change, that competitors vary widely in size and nature, and that the demand for some products may be negatively affected, warning this could harm its ability to compete and its results of operations (FY2025 10-K, accession 0000033185-26-000010). A data advantage feels permanent until a competitor, a regulator, or a large payroll processor decides to build or open an alternative dataset. The Work Number's dominance rests on payroll providers continuing to contribute records to Equifax rather than to a rival or to themselves, and that is a commercial relationship, not a law of nature.

The cyclical and regulatory exposures are immediate. A large share of Workforce Solutions and U.S. Information Solutions revenue is tied to mortgage and consumer-lending activity, which moves with interest rates. Equifax flagged that it is maintaining rather than raising guidance partly because of uncertainty around rates and U.S. mortgage activity, and the mortgage business is inherently volatile: the same 14% mortgage growth that helped this quarter can reverse when rates rise and originations fall. On top of that, a credit bureau is a perennial target for privacy regulation and litigation, a risk the 2017 data breach made concrete, and tighter rules on data use could constrain the very products that drive the premium.

The valuation and balance sheet leave little cushion for any of that. The price is justified only by the growth-DCF; the asset, earnings-power, and peer-multiple frames all say richly valued, with the free-cash-flow capitalization near $60 and the earnings power value near $46 against a $154 price (June 27, 2026). The implied 18% operating growth must persist for five years, and only about 40% of comparable fast-growers have sustained that pace. Net debt sits near 5.4x operating income with interest coverage of about 5.3x, a meaningful load for a company whose earnings are partly cyclical. If the data moat erodes even modestly, or mortgage stays weak, the growth-DCF that alone supports the price compresses toward the methods that do not, and the downside is the distance between $154 and frames that mark half that.

Valuation

Equifax is the textbook moat-premium case in the X-ray. The asset-based frames mark well below the price: simple excess return near $63, two-stage excess return near $80, residual income near $81. The earnings-power frames sit lower still, near $46 (earnings power value) to $60 (free-cash-flow yield). The relative-multiple frames land near $96 to $104. Only the growth-DCF frames reach the price: the perpetual-growth DCF marks about $303 and the exit-multiple DCF near $201. The characterization is precise: asset, earnings-power, and peer-multiple models all say richly valued, and only the growth-DCF reaches the price. For a data bureau whose core asset is an off-balance-sheet database, that is the expected signature of a durability premium.

Inverting the price quantifies the bet. At $153.83 the market pays about 22x company-wide operating income, implying roughly 18% annual operating-profit growth for five years at a 9.1% cost of capital. That near-term pace is within what Equifax has recently delivered, so the stretch is duration and persistence, not an implausible next step. The implied operating margin near 10.4% actually sits below the current 18.3%, which means the inversion is not even demanding margin expansion, just sustained top-line compounding.

How unusual is it? Against Equifax's own history the pace is in range. Against its sector the multiple sits in the lower half of the peer group, which is mildly favorable given the quality of Workforce Solutions. Against the base rate, only about 40% of comparable fast-growers sustained this run, the standard caution. The honest read: this is a high-quality data franchise priced for its data moat to keep compounding, where the growth-DCF carries the valuation and the risk is that the moat or the mortgage cycle disappoints.

Catalysts

The most recent print was the first-quarter 2026 report, a record. Revenue was $1.649 billion, up 14% (13% in local currency) and $37 million above the midpoint of February guidance. Workforce Solutions revenue grew 10% with Verification Services up 14%, led by mid-double-digit government growth, and Mortgage and Diversified Markets each up 14%, at a 52.3% adjusted EBITDA margin. The company maintained full-year 2026 guidance, including mortgage revenue growth of over 20%, and reaffirmed expectations of over $1 billion of free cash flow with at least 100% cash conversion.

The guidance posture is itself a signal: Equifax maintained rather than raised constant-dollar revenue growth guidance, citing uncertainty around interest rates and U.S. mortgage activity. That caution makes the rate and mortgage backdrop the near-term swing factor, since a stronger-than-expected first quarter is being offset by expectations of slightly slower growth later in the year.

The forward thesis tracks the data moat, the mortgage cycle, and margin. The supportive drivers are Workforce Solutions verification growth (government and employer demand), the expanding records in The Work Number, and high cash conversion. The risks are mortgage and rate sensitivity, competition in data services, and privacy regulation. Watch the Workforce Solutions revenue and margin trend at each print, the mortgage revenue trajectory against the over-20% guide, the pace of new payroll-record contributors to the verification database, and any regulatory developments, since those determine whether the growth-DCF that alone supports the valuation stays intact.

Sources: Equifax Q1 2026 results and 8-K (investor.equifax.com, sec.gov); Equifax Q1 2026 earnings highlights (Yahoo Finance); Equifax Q1 2026 earnings transcript (Motley Fool, AOL, Globe and Mail).

Peer Cohorts (Per Segment, With Filing Citations)

Workforce Solutions (reported)

U.S. Information Solutions (reported)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive EFX report on boothcheck