Yahoo Finance Equifax Inc. (NYSE:EFX): Will The Growth Last?
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Equifax Inc.'s (NYSE:EFX) announced its latest earnings update in December 2018, which confirmed that the company endured a substantial headwind with earnings deteriorating by -49%. Below, I've presented key growth figures on how market analysts perceive Equifax's earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
See our latest analysis for Equifax
Market analysts' prospects for next year seems buoyant, with earnings increasing by a robust 49%. This growth seems to continue into the following year with rates reaching double digit 84% compared to today’s earnings, and finally hitting US$665m by 2022.
While it’s useful to understand the growth year by year relative to today’s level, it may be more valuable to estimate the rate at which the company is rising or falling on average every year. The pro of this method 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 compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 25%. This means, we can anticipate Equifax will grow its earnings by 25% every year for the next couple of years.
Next Steps:
For Equifax, there are three essential factors you should look at:
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!
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
