Equifax (EFX) Q1 Earnings & Revenues Top Estimates, Rise Y/Y

Equifax Inc. EFX reported better-than-expected first-quarter 2022 results.

Adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. The reported figure exceeded the guided range of $2.08-$2.18. 

Revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis. The reported figure exceeded the guided range of $1.32-$1.34 billion.

Equifax reported its ninth consecutive quarter of solid double-digit revenue growth. The company completed the acquisition of Efficient Hire to boost differentiated data and strengthen its Workforce Solutions segment, and that of Data-Credito, the largest credit bureau in the Dominican Republic. The company has been leveraging the EFX Cloud to drive new products, innovation and growth.

Over the past year, shares of Equifax have gained 14.9% against the 29.7% decline of the industry it belongs to. The Zacks S&P 500 composite grew 6.8% in the same time frame.

Image Source: Zacks Investment Research

Let’s check out the numbers in detail:

Segmental Revenues

Revenues in the USIS division came in at $432.9 million, down 6% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $343.8 million were down 2% from the year-ago quarter. Mortgage Solutions’ revenues of $43.4 million declined 20% year over year. Financial Marketing Services’ revenues came in at $45.7 million, down 14% year over year.

Revenues in the International division totaled $281.3 million, up 6% year over year on a reported basis and 10% on a local-currency basis. Asia Pacific revenues of $86.5 million fell 1% year over year on a reported basis but grew 6% on a local-currency basis. Revenues from Europe came in at $85.8 million, up 11% year over year on a reported basis and 16% on a local-currency basis. Latin America revenues of $47.4 million grew 14% year over year on a reported basis and 23% on a local-currency basis. Canada revenues of $61.6 million grew 1% year over year on a reported basis and 2% on a local-currency basis.

Revenues in the Workforce Solutions segment totaled $649 million, up 33% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $513.3 million were up 33% year over year. Employer Services revenues of $135.7 million grew 33% year over year.

Operating Results

Adjusted EBITDA in the first quarter of 2022 came in at $484.2 million, up 12% from the year-ago quarter. Adjusted EBITDA margin fell to 35.5% from 35.6% in the year-ago quarter.

Adjusted EBITDA margin for USIS was 39.3% compared with 42.1% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 25.4% compared with 26.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 54.6% compared with 58.9% a year ago.

Equifax, Inc. Price, Consensus and EPS Surprise

Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote

Balance Sheet and Cash Flow

Equifax exited first-quarter 2022 with cash and cash equivalents of $200.9 million compared with $224.7 million at the end of the prior quarter. Long-term debt of $4.47 billion was flat sequentially.

The company utilized $198.5 million of cash from operating activities while capex was $156.5 million. Also, Equifax paid out dividends of $47.9 million to shareholders in the reported quarter.

Second-Quarter and Full-Year 2022 Guidance

For the second quarter of 2022, Equifax expects revenues between $1.31 and $1.33 billion. The Zacks Consensus Estimate of $1.32 billion lies within the guidance.

Adjusted EPS is anticipated in the range of $1.98-$2.08. The Zacks Consensus Estimate of $2.17 lies above the guidance.

For full-year 2022, revenues are now expected between $5.15 billion and $5.25 billion compared with the prior guidance of $5.25-$5.35 billion. The Zacks Consensus Estimate of $5.32 billion exceeds the updated guidance.

Adjusted EPS is now anticipated in the range of $8.00-$8.30 compared with the prior guidance of $8.50-$8.80. The Zacks Consensus Estimate of $8.69 exceeds the updated guidance.

Currently, Equifax carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some top-ranked stocks in the broader Business Services sector that investors may consider are Cross Country Healthcare CCRN, NV5 Global NVEE and Clean Harbors CLH, each sporting a Zacks Rank #1.

Cross Country Healthcare has a trailing four-quarter earnings surprise of 41.5%, on average.

Cross Country Healthcare’s shares have surged 68.8% in the past year. The company has a long-term earnings growth of 6.5%.

NV5 Global has an expected earnings growth rate of 6.1% for the current year. It has delivered a trailing four-quarter earnings surprise of 22.2%, on average.

NV5 Global’s shares have surged 40.8% in the past year. The company has a long-term earnings growth of 14.2%.

Clean Harbors has an expected earnings growth rate of 17% for the current year. The company has a trailing four-quarter earnings surprise of 43.2%, on average.

Clean Harbors’ shares have surged 27.3% in the past year.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.