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Equifax (EFX) to Report Q3 Earnings: What's in the Cards?

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Equifax Inc. EFX is scheduled to report third-quarter 2015 results on Oct 21. Last quarter, the company posted a positive earnings surprise of 4.55%. Let's see how things are shaping up for this announcement.

Factors to Consider

Equifax reported better-than-expected second-quarter 2015 results, which improved year over year as well. The year-over-year upside was supported by revenue growth across all its business segments, except International.

Recently, Equifax made a non-binding offer to acquire Veda Group Limited, the leading Australian credit information provider, to broaden its global operations. If successful, this would be Equifax's biggest acquisition surpassing the $1 billion CSC Credit Services buyout in 2012. We believe that the recent move will give Equifax a substantial foothold in the country.

Management's efforts such as strategic initiatives for product innovation, expansion of data assets through acquisitions and continuous share gains in North America raise optimism.

Also, the company's strong correlation with the consumer and financial markets as well as its exposure in the U.S. and Europe are likely to propel growth, going ahead. However, competition from the likes of Automatic Data Processing Inc. ADP , Fiserv Inc., Moody's Corp. and uncertainty in the mortgage sector raise concern.

Earnings Whispers

Our proven model does not conclusively show that Equifax is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: ESP for Equifax is 0.00% since the Most Accurate estimate of $1.10 per share stands in line with the Zacks Consensus Estimate.

Zacks Rank: Equifax's Zacks Rank #2 when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some other companies, which you may consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

  • Fiserv, Inc. FISV with Earnings ESP of +3.09% and a Zacks Rank #2
  • Apple Inc. AAPL with Earnings ESP of +1.60% and a Zacks Rank #3 (Hold)

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

EQUIFAX INC (EFX): Free Stock Analysis Report

AUTOMATIC DATA (ADP): Free Stock Analysis Report

FISERV INC (FISV): Free Stock Analysis Report

APPLE INC (AAPL): Free Stock Analysis Report

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


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

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