Intrinsic value of Equifax - EFX

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$139.51

  Intrinsic Value

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  Value-price divergence*

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$139.51

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EFX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 16.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  18.06
  20.30
  18.77
  17.39
  16.15
  15.04
  14.03
  13.13
  12.32
  11.59
  10.93
  10.33
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
Revenue, $m
  3,145
  3,783
  4,494
  5,275
  6,127
  7,049
  8,038
  9,093
  10,214
  11,397
  12,642
  13,949
  15,316
  16,744
  18,232
  19,782
  21,394
  23,070
  24,813
  26,623
  28,504
  30,460
  32,493
  34,607
  36,807
  39,096
  41,480
  43,964
  46,554
  49,254
  52,072
Variable operating expenses, $m
 
  2,719
  3,155
  3,634
  4,157
  4,723
  5,330
  5,978
  6,665
  7,391
  8,155
  8,560
  9,399
  10,275
  11,188
  12,139
  13,128
  14,157
  15,226
  16,337
  17,491
  18,691
  19,939
  21,236
  22,586
  23,991
  25,454
  26,978
  28,567
  30,224
  31,953
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,327
  2,719
  3,155
  3,634
  4,157
  4,723
  5,330
  5,978
  6,665
  7,391
  8,155
  8,560
  9,399
  10,275
  11,188
  12,139
  13,128
  14,157
  15,226
  16,337
  17,491
  18,691
  19,939
  21,236
  22,586
  23,991
  25,454
  26,978
  28,567
  30,224
  31,953
Operating income, $m
  818
  1,064
  1,339
  1,641
  1,970
  2,326
  2,708
  3,116
  3,549
  4,006
  4,487
  5,389
  5,918
  6,469
  7,044
  7,643
  8,266
  8,913
  9,587
  10,286
  11,013
  11,768
  12,554
  13,371
  14,221
  15,105
  16,026
  16,986
  17,986
  19,030
  20,118
EBITDA, $m
  1,087
  1,567
  1,862
  2,185
  2,538
  2,920
  3,330
  3,767
  4,231
  4,721
  5,237
  5,778
  6,345
  6,936
  7,553
  8,195
  8,863
  9,557
  10,279
  11,029
  11,808
  12,618
  13,460
  14,336
  15,247
  16,196
  17,184
  18,213
  19,285
  20,404
  21,571
Interest expense (income), $m
  85
  112
  147
  185
  228
  274
  324
  378
  435
  496
  560
  627
  698
  772
  850
  931
  1,015
  1,102
  1,193
  1,287
  1,386
  1,488
  1,594
  1,704
  1,819
  1,938
  2,062
  2,192
  2,326
  2,467
  2,613
Earnings before tax, $m
  728
  952
  1,192
  1,455
  1,742
  2,052
  2,384
  2,738
  3,114
  3,510
  3,927
  4,762
  5,219
  5,697
  6,194
  6,712
  7,251
  7,811
  8,394
  8,999
  9,627
  10,281
  10,960
  11,667
  12,402
  13,167
  13,964
  14,794
  15,660
  16,563
  17,505
Tax expense, $m
  233
  257
  322
  393
  470
  554
  644
  739
  841
  948
  1,060
  1,286
  1,409
  1,538
  1,672
  1,812
  1,958
  2,109
  2,266
  2,430
  2,599
  2,776
  2,959
  3,150
  3,348
  3,555
  3,770
  3,994
  4,228
  4,472
  4,726
Net income, $m
  489
  695
  870
  1,062
  1,272
  1,498
  1,741
  1,999
  2,273
  2,563
  2,867
  3,476
  3,810
  4,159
  4,522
  4,900
  5,293
  5,702
  6,127
  6,569
  7,028
  7,505
  8,001
  8,517
  9,053
  9,612
  10,194
  10,800
  11,432
  12,091
  12,779

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  129
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,664
  7,866
  9,342
  10,967
  12,739
  14,654
  16,711
  18,905
  21,234
  23,694
  26,283
  29,000
  31,842
  34,810
  37,905
  41,126
  44,478
  47,963
  51,585
  55,349
  59,261
  63,326
  67,552
  71,948
  76,521
  81,281
  86,238
  91,402
  96,785
  102,399
  108,257
Adjusted assets (=assets-cash), $m
  6,535
  7,866
  9,342
  10,967
  12,739
  14,654
  16,711
  18,905
  21,234
  23,694
  26,283
  29,000
  31,842
  34,810
  37,905
  41,126
  44,478
  47,963
  51,585
  55,349
  59,261
  63,326
  67,552
  71,948
  76,521
  81,281
  86,238
  91,402
  96,785
  102,399
  108,257
Revenue / Adjusted assets
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
Average production assets, $m
  1,588
  1,911
  2,269
  2,664
  3,094
  3,560
  4,059
  4,592
  5,158
  5,755
  6,384
  7,044
  7,735
  8,456
  9,207
  9,990
  10,804
  11,651
  12,530
  13,445
  14,395
  15,382
  16,409
  17,476
  18,587
  19,743
  20,948
  22,202
  23,510
  24,873
  26,296
Working capital, $m
  -587
  -159
  -189
  -222
  -257
  -296
  -338
  -382
  -429
  -479
  -531
  -586
  -643
  -703
  -766
  -831
  -899
  -969
  -1,042
  -1,118
  -1,197
  -1,279
  -1,365
  -1,453
  -1,546
  -1,642
  -1,742
  -1,847
  -1,955
  -2,069
  -2,187
Total debt, $m
  2,672
  3,335
  4,211
  5,174
  6,225
  7,361
  8,581
  9,882
  11,263
  12,722
  14,257
  15,868
  17,553
  19,313
  21,148
  23,059
  25,047
  27,113
  29,261
  31,493
  33,813
  36,223
  38,730
  41,336
  44,048
  46,870
  49,810
  52,872
  56,065
  59,394
  62,868
Total liabilities, $m
  4,001
  4,664
  5,540
  6,503
  7,554
  8,690
  9,910
  11,211
  12,592
  14,051
  15,586
  17,197
  18,882
  20,642
  22,477
  24,388
  26,376
  28,442
  30,590
  32,822
  35,142
  37,552
  40,059
  42,665
  45,377
  48,199
  51,139
  54,201
  57,394
  60,723
  64,197
Total equity, $m
  2,663
  3,201
  3,802
  4,464
  5,185
  5,964
  6,801
  7,694
  8,642
  9,644
  10,697
  11,803
  12,960
  14,168
  15,427
  16,738
  18,103
  19,521
  20,995
  22,527
  24,119
  25,774
  27,494
  29,283
  31,144
  33,081
  35,099
  37,201
  39,392
  41,677
  44,061
Total liabilities and equity, $m
  6,664
  7,865
  9,342
  10,967
  12,739
  14,654
  16,711
  18,905
  21,234
  23,695
  26,283
  29,000
  31,842
  34,810
  37,904
  41,126
  44,479
  47,963
  51,585
  55,349
  59,261
  63,326
  67,553
  71,948
  76,521
  81,280
  86,238
  91,402
  96,786
  102,400
  108,258
Debt-to-equity ratio
  1.003
  1.040
  1.110
  1.160
  1.200
  1.230
  1.260
  1.280
  1.300
  1.320
  1.330
  1.340
  1.350
  1.360
  1.370
  1.380
  1.380
  1.390
  1.390
  1.400
  1.400
  1.410
  1.410
  1.410
  1.410
  1.420
  1.420
  1.420
  1.420
  1.430
  1.430
Adjusted equity ratio
  0.388
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407
  0.407

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  489
  695
  870
  1,062
  1,272
  1,498
  1,741
  1,999
  2,273
  2,563
  2,867
  3,476
  3,810
  4,159
  4,522
  4,900
  5,293
  5,702
  6,127
  6,569
  7,028
  7,505
  8,001
  8,517
  9,053
  9,612
  10,194
  10,800
  11,432
  12,091
  12,779
Depreciation, amort., depletion, $m
  269
  503
  523
  545
  568
  594
  622
  651
  682
  715
  750
  389
  427
  467
  509
  552
  597
  644
  692
  743
  795
  850
  907
  966
  1,027
  1,091
  1,157
  1,227
  1,299
  1,374
  1,453
Funds from operations, $m
  840
  1,198
  1,393
  1,607
  1,840
  2,092
  2,362
  2,650
  2,956
  3,278
  3,617
  3,865
  4,237
  4,626
  5,031
  5,452
  5,890
  6,346
  6,820
  7,312
  7,823
  8,355
  8,907
  9,482
  10,080
  10,703
  11,351
  12,027
  12,731
  13,465
  14,232
Change in working capital, $m
  44
  -27
  -30
  -33
  -36
  -39
  -42
  -44
  -47
  -50
  -52
  -55
  -57
  -60
  -63
  -65
  -68
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -109
  -113
  -118
Cash from operations, $m
  796
  1,523
  1,423
  1,640
  1,876
  2,131
  2,404
  2,694
  3,003
  3,328
  3,669
  3,920
  4,295
  4,686
  5,093
  5,517
  5,958
  6,416
  6,893
  7,388
  7,902
  8,437
  8,993
  9,571
  10,173
  10,799
  11,451
  12,131
  12,839
  13,579
  14,350
Maintenance CAPEX, $m
  0
  -88
  -106
  -125
  -147
  -171
  -197
  -224
  -254
  -285
  -318
  -353
  -389
  -427
  -467
  -509
  -552
  -597
  -644
  -692
  -743
  -795
  -850
  -907
  -966
  -1,027
  -1,091
  -1,157
  -1,227
  -1,299
  -1,374
New CAPEX, $m
  -174
  -323
  -359
  -395
  -430
  -465
  -500
  -533
  -566
  -598
  -629
  -660
  -690
  -721
  -752
  -783
  -814
  -847
  -880
  -914
  -950
  -987
  -1,027
  -1,068
  -1,111
  -1,156
  -1,204
  -1,254
  -1,308
  -1,364
  -1,423
Cash from investing activities, $m
  -1,976
  -411
  -465
  -520
  -577
  -636
  -697
  -757
  -820
  -883
  -947
  -1,013
  -1,079
  -1,148
  -1,219
  -1,292
  -1,366
  -1,444
  -1,524
  -1,606
  -1,693
  -1,782
  -1,877
  -1,975
  -2,077
  -2,183
  -2,295
  -2,411
  -2,535
  -2,663
  -2,797
Free cash flow, $m
  -1,180
  1,113
  959
  1,120
  1,298
  1,494
  1,707
  1,937
  2,183
  2,445
  2,722
  2,908
  3,215
  3,537
  3,874
  4,226
  4,592
  4,973
  5,369
  5,781
  6,209
  6,654
  7,116
  7,597
  8,096
  8,616
  9,156
  9,719
  10,305
  10,916
  11,553
Issuance/(repayment) of debt, $m
  1,298
  792
  876
  964
  1,051
  1,136
  1,220
  1,301
  1,381
  1,459
  1,535
  1,611
  1,686
  1,760
  1,835
  1,911
  1,988
  2,067
  2,148
  2,232
  2,319
  2,411
  2,506
  2,606
  2,712
  2,823
  2,939
  3,062
  3,192
  3,329
  3,474
Issuance/(repurchase) of shares, $m
  32
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,346
  792
  876
  964
  1,051
  1,136
  1,220
  1,301
  1,381
  1,459
  1,535
  1,611
  1,686
  1,760
  1,835
  1,911
  1,988
  2,067
  2,148
  2,232
  2,319
  2,411
  2,506
  2,606
  2,712
  2,823
  2,939
  3,062
  3,192
  3,329
  3,474
Total cash flow (excl. dividends), $m
  194
  1,905
  1,834
  2,083
  2,349
  2,630
  2,927
  3,238
  3,564
  3,904
  4,258
  4,519
  4,901
  5,298
  5,709
  6,136
  6,580
  7,040
  7,517
  8,013
  8,529
  9,065
  9,623
  10,203
  10,808
  11,438
  12,096
  12,782
  13,498
  14,245
  15,026
Retained Cash Flow (-), $m
  -352
  -538
  -601
  -661
  -721
  -780
  -837
  -893
  -948
  -1,001
  -1,054
  -1,106
  -1,157
  -1,208
  -1,259
  -1,311
  -1,364
  -1,418
  -1,474
  -1,532
  -1,592
  -1,655
  -1,720
  -1,789
  -1,861
  -1,937
  -2,017
  -2,102
  -2,191
  -2,285
  -2,384
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,367
  1,233
  1,422
  1,628
  1,851
  2,090
  2,345
  2,616
  2,903
  3,204
  3,413
  3,744
  4,090
  4,450
  4,825
  5,215
  5,621
  6,043
  6,481
  6,937
  7,410
  7,902
  8,414
  8,947
  9,501
  10,078
  10,680
  11,307
  11,960
  12,642
Discount rate, %
 
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.51
  9.99
  10.49
  11.01
  11.57
  12.14
  12.75
  13.39
  14.06
  14.76
  15.50
  16.27
  17.09
  17.94
  18.84
  19.78
  20.77
  21.81
  22.90
  24.04
  25.25
  26.51
  27.83
  29.22
PV of cash for distribution, $m
 
  1,276
  1,068
  1,134
  1,187
  1,224
  1,242
  1,241
  1,221
  1,183
  1,127
  1,024
  946
  859
  766
  671
  576
  485
  401
  324
  256
  198
  149
  110
  79
  55
  37
  24
  16
  10
  6
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Equifax Inc. provides information solutions and human resources business process outsourcing services for businesses, governments, and consumers. The company operates through four segments: U.S. Information Solutions (USIS), International, Workforce Solutions, and Global Consumer Solutions. The USIS segment offers consumer and commercial information services, such as credit information and credit scoring, credit modeling and portfolio analytics, locate, fraud detection and prevention, identity verification, and other consulting; mortgage loan origination information; financial marketing; and identity management services. The International segment provides information service products, which include consumer and commercial services, such as credit and financial information, and credit scoring and modeling; and credit and other marketing products and services, as well as offers information, technology, and services to support debt collections and recovery management. The Workforce Solutions segment provides employment, income, and social security number verification services; and payroll-based transaction and employment tax management services. The Global Consumer Solutions segment offers credit information, credit monitoring, and identity theft protection products directly to consumers through the Internet and hard-copy formats. Equifax Inc. serves customers in financial service, mortgage, human resource, consumer, commercial, telecommunication, retail, automotive, utility, brokerage, healthcare, and insurance industries, as well as state and federal governments. It operates in the United States, Canada, Argentina, Brazil, Australia, New Zealand, Chile, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Uruguay, Peru, Portugal, the Republic of Ireland, Spain, the United Kingdom, Cambodia, Malaysia, India, Russia, and Singapore. Equifax Inc. was founded in 1899 and is headquartered in Atlanta, Georgia.

FINANCIAL RATIOS  of  Equifax (EFX)

Valuation Ratios
P/E Ratio 34.2
Price to Sales 5.3
Price to Book 6.3
Price to Tangible Book
Price to Cash Flow 21
Price to Free Cash Flow 26.9
Growth Rates
Sales Growth Rate 18.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 19.2%
Cap. Spend. - 3 Yr. Gr. Rate 16%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 78.4%
Total Debt to Equity 100.3%
Interest Coverage 10
Management Effectiveness
Return On Assets 9.8%
Ret/ On Assets - 3 Yr. Avg. 9.7%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.9%
Return On Equity 19.7%
Return On Equity - 3 Yr. Avg. 18.3%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 64.6%
Gross Margin - 3 Yr. Avg. 65.5%
EBITDA Margin 34.4%
EBITDA Margin - 3 Yr. Avg. 34.3%
Operating Margin 26%
Oper. Margin - 3 Yr. Avg. 26.1%
Pre-Tax Margin 23.1%
Pre-Tax Margin - 3 Yr. Avg. 23.5%
Net Profit Margin 15.5%
Net Profit Margin - 3 Yr. Avg. 15.6%
Effective Tax Rate 32%
Eff/ Tax Rate - 3 Yr. Avg. 32.9%
Payout Ratio 32.3%

EFX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EFX stock intrinsic value calculation we used $3145 million for the last fiscal year's total revenue generated by Equifax. The default revenue input number comes from 2016 income statement of Equifax. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EFX stock valuation model: a) initial revenue growth rate of 20.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.1%, whose default value for EFX is calculated based on our internal credit rating of Equifax, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Equifax.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EFX stock the variable cost ratio is equal to 74%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for EFX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Equifax.

Corporate tax rate of 27% is the nominal tax rate for Equifax. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EFX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EFX are equal to 50.5%.

Life of production assets of 18.1 years is the average useful life of capital assets used in Equifax operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EFX is equal to -4.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2663 million for Equifax - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 120.138 million for Equifax is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Equifax at the current share price and the inputted number of shares is $16.8 billion.


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COMPANY NEWS

▶ Agile learning key, former Sam's Club CEO says   [Jun-26-17 08:10AM  American City Business Journals]
▶ Equifax to Meet with Investors in Toronto   [Jun-14-17 01:00PM  PR Newswire]
▶ Equifax, Inc. Value Analysis (NYSE:EFX) : June 12, 2017   [Jun-12-17 02:49PM  Capital Cube]
▶ Equifax Live Webcast on June 16   [02:07PM  PR Newswire]
▶ Equifax Announces Senior Leadership Changes   [Jun-05-17 05:00PM  PR Newswire]
▶ /C O R R E C T I O N -- Equifax Inc./   [Jun-01-17 12:27PM  PR Newswire]
▶ 3 Simple Steps To Boost Your Credit Score   [May-23-17 11:24AM  Forbes]
▶ Two Minute Money: Combating Credit Card Fraud   [May-22-17 10:20AM  Yahoo Finance Video]
▶ Fix My Finances: Recovering From Chapter 7 Bankruptcy   [May-15-17 11:49AM  Yahoo Finance Video]
▶ Equifax to Meet with Investors in New York   [May-09-17 09:00AM  PR Newswire]
▶ Equifax Board of Directors Declares Quarterly Dividend   [May-04-17 01:00PM  PR Newswire]
▶ ETFs with exposure to Equifax, Inc. : May 2, 2017   [May-02-17 03:58PM  Capital Cube]
▶ Equifax to Meet with Investors in Europe   [01:35PM  PR Newswire]
▶ Equifax tops Street 1Q forecasts   [Apr-26-17 04:44PM  Associated Press]
▶ Equifax Releases First Quarter Results   [04:15PM  PR Newswire]
▶ Equifax to Meet with Investors in New York and Boston   [Apr-24-17 10:30AM  PR Newswire]
▶ Atlantas Westside lands new 'financial capability center' (SLIDESHOW)   [Apr-18-17 01:10PM  American City Business Journals]
▶ Mellody Hobson on rising consumer debt   [Apr-09-17 02:38PM  CBS News Videos]
▶ U of L: Tax information of some employees hacked   [Apr-07-17 02:50PM  American City Business Journals]
▶ First Quarter Analysis: Winners and Losers in Industrials   [Apr-05-17 01:25PM  Investopedia]
▶ Equifax to Meet with Investors in Baltimore and Boston   [Feb-21-17 01:00PM  PR Newswire]
▶ Equifax USIS Live Webcast on February 28   [10:35AM  PR Newswire]
Stock chart of EFX Financial statements of EFX Annual reports of EFX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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