Bank of America Securities has given Equifax Inc (NYSE:EFX). a Sell rating due to its underperformance in the mortgage market and a decrease in Workforce Solutions revenues. The rating came after Equifax missed its Q3 earnings per share target, leading to a downgrade in its 2023 earnings per share guidance. The full-year 2023 earnings per share prediction has been curtailed by 4% at the mid-point, influenced by a weaker mortgage market, foreign exchange rates, and partially offset by the Boa Vista acquisition.
Equifax's lower than expected Q3 organic sales and missed EBITDA margins across all segments further solidified the Sell rating. The company's stock price has seen a decline of -10.08% over the past six months, from $194.800 to $175.160.
Equifax Inc.'s Q3 2023 results fell short of expectations, with adjusted earnings at $1.76 per share. Total revenues were $1.32 billion, missing consensus by 0.7%, but showing a YoY growth of 6% (reported) and 6.5% (local currency).
Workforce Solutions posted revenues of $577.2 million, a 3% YoY increase but below estimates of $602.2 million. The USIS segment reported revenues of $426 million, a 7% YoY increase, above estimates by 0.9%. The International division reported revenues of $315.9 million, reflecting a 10% and 12% YoY growth on reported and local-currency basis respectively.
Q3's adjusted EBITDA was $436.1 million, an 8% YoY increase and above estimates by 1.1%, with an overall margin of 33.1%, up by 60 basis points from the previous year.
Equifax ended the quarter with cash and cash equivalents of $412.6 million, generated operational cash flow of $381.7 million, distributed dividends worth $48.1 million, had long-term debt of $5.5 billion, and capital expenditures of $134.3 million.
For Q4 2023, Equifax anticipates revenues between $1.31-$1.33 billion and adjusted EPS between $1.72-$1.82. Full year 2023 projections are revenues between $5.25-$5.27 billion and adjusted EPS between $6.62-$6.72.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.