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What's in Store for Equifax (EFX) this Earnings Season?

Equifax Inc.EFX is scheduled to report fourth-quarter 2015 results on Feb 10. Last quarter, the company posted a positive earnings surprise of 3.64%. Notably, Equifax beat the Zacks Consensus Estimate thrice in the last four quarters with an average positive surprise of 3.27%.

Let's see how things are shaping up for this announcement.

Factors to Consider

Equifax is a leading information services provider to consumers and businesses. The company reported better-than-expected third-quarter results which also improved year over year. Backed by the strong results, Equifax raised the full-year earnings outlook and issued encouraging fourth-quarter guidance.

Management's efforts such as strategic initiatives for product innovation, expansion of data assets through acquisitions and continuous share gains in North America are encouraging. Also, the company's strong correlation to consumer and financial markets as well as its U.S. and European exposure are likely to propel growth, going ahead. We believe that these factors will positively impact the results in the to-be-reported quarter.

However, intense competition from peers such as Automatic Data Processing Inc. ADP , Fiserv Inc., Moody's Corp. and uncertainty in the mortgage sector remain the concerns.

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 $1.11 per share is 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 a 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 a couple of stocks which you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

InterDigital, Inc. IDCC , with an Earnings ESP of +33.33% and a Zacks Rank #3.

Yelp Inc. YELP , with an Earnings ESP of +33.33% and a Zacks Rank #3.

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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

INTERDIGITL INC (IDCC): Free Stock Analysis Report

AUTOMATIC DATA (ADP): Free Stock Analysis Report

YELP INC (YELP): 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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