Intrinsic value of Equifax - EFX

Previous Close

$139.89

  Intrinsic Value

$117.93

stock screener

  Rating & Target

hold

-16%

  Value-price divergence*

+85%

Previous close

$139.89

 
Intrinsic value

$117.93

 
Up/down potential

-16%

 
Rating

hold

 
Value-price divergence*

+85%

*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
  14.30
  13.37
  12.53
  11.78
  11.10
  10.49
  9.94
  9.45
  9.00
  8.60
  8.24
  7.92
  7.63
  7.36
  7.13
  6.91
  6.72
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
Revenue, $m
  3,145
  3,595
  4,075
  4,586
  5,126
  5,695
  6,293
  6,919
  7,572
  8,254
  8,964
  9,703
  10,471
  11,270
  12,100
  12,962
  13,859
  14,791
  15,759
  16,767
  17,816
  18,909
  20,047
  21,232
  22,469
  23,759
  25,106
  26,512
  27,981
  29,516
  31,121
Variable operating expenses, $m
 
  2,603
  2,898
  3,212
  3,543
  3,892
  4,259
  4,643
  5,044
  5,462
  5,898
  5,954
  6,426
  6,916
  7,425
  7,954
  8,504
  9,076
  9,671
  10,289
  10,933
  11,603
  12,301
  13,029
  13,788
  14,580
  15,406
  16,269
  17,170
  18,112
  19,097
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
  2,603
  2,898
  3,212
  3,543
  3,892
  4,259
  4,643
  5,044
  5,462
  5,898
  5,954
  6,426
  6,916
  7,425
  7,954
  8,504
  9,076
  9,671
  10,289
  10,933
  11,603
  12,301
  13,029
  13,788
  14,580
  15,406
  16,269
  17,170
  18,112
  19,097
Operating income, $m
  818
  991
  1,177
  1,374
  1,583
  1,803
  2,034
  2,276
  2,528
  2,792
  3,066
  3,749
  4,046
  4,354
  4,675
  5,008
  5,354
  5,714
  6,089
  6,478
  6,884
  7,306
  7,745
  8,203
  8,681
  9,180
  9,700
  10,243
  10,811
  11,404
  12,024
EBITDA, $m
  1,087
  1,489
  1,688
  1,900
  2,124
  2,359
  2,607
  2,866
  3,137
  3,419
  3,714
  4,020
  4,338
  4,669
  5,013
  5,370
  5,741
  6,127
  6,529
  6,946
  7,381
  7,833
  8,304
  8,796
  9,308
  9,842
  10,400
  10,983
  11,591
  12,227
  12,892
Interest expense (income), $m
  85
  112
  137
  163
  190
  220
  250
  283
  317
  352
  389
  428
  468
  510
  553
  598
  645
  693
  744
  796
  851
  908
  967
  1,029
  1,093
  1,160
  1,230
  1,303
  1,380
  1,459
  1,543
Earnings before tax, $m
  728
  880
  1,041
  1,212
  1,393
  1,583
  1,783
  1,993
  2,211
  2,439
  2,677
  3,321
  3,578
  3,845
  4,122
  4,410
  4,710
  5,021
  5,345
  5,682
  6,032
  6,398
  6,778
  7,174
  7,588
  8,019
  8,470
  8,940
  9,431
  9,944
  10,481
Tax expense, $m
  233
  237
  281
  327
  376
  428
  482
  538
  597
  659
  723
  897
  966
  1,038
  1,113
  1,191
  1,272
  1,356
  1,443
  1,534
  1,629
  1,727
  1,830
  1,937
  2,049
  2,165
  2,287
  2,414
  2,546
  2,685
  2,830
Net income, $m
  489
  642
  760
  885
  1,017
  1,156
  1,302
  1,455
  1,614
  1,781
  1,954
  2,424
  2,612
  2,807
  3,009
  3,219
  3,438
  3,665
  3,902
  4,148
  4,404
  4,670
  4,948
  5,237
  5,539
  5,854
  6,183
  6,526
  6,885
  7,259
  7,651

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
  7,473
  8,473
  9,535
  10,658
  11,841
  13,083
  14,384
  15,743
  17,160
  18,637
  20,173
  21,770
  23,431
  25,156
  26,949
  28,812
  30,750
  32,764
  34,859
  37,040
  39,311
  41,677
  44,142
  46,713
  49,395
  52,195
  55,118
  58,172
  61,364
  64,701
Adjusted assets (=assets-cash), $m
  6,535
  7,473
  8,473
  9,535
  10,658
  11,841
  13,083
  14,384
  15,743
  17,160
  18,637
  20,173
  21,770
  23,431
  25,156
  26,949
  28,812
  30,750
  32,764
  34,859
  37,040
  39,311
  41,677
  44,142
  46,713
  49,395
  52,195
  55,118
  58,172
  61,364
  64,701
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
  1,815
  2,058
  2,316
  2,589
  2,876
  3,178
  3,494
  3,824
  4,168
  4,527
  4,900
  5,288
  5,691
  6,111
  6,546
  6,999
  7,469
  7,959
  8,468
  8,997
  9,549
  10,124
  10,722
  11,347
  11,998
  12,678
  13,389
  14,130
  14,906
  15,716
Working capital, $m
  -587
  -151
  -171
  -193
  -215
  -239
  -264
  -291
  -318
  -347
  -376
  -408
  -440
  -473
  -508
  -544
  -582
  -621
  -662
  -704
  -748
  -794
  -842
  -892
  -944
  -998
  -1,054
  -1,114
  -1,175
  -1,240
  -1,307
Total debt, $m
  2,672
  3,103
  3,695
  4,325
  4,991
  5,693
  6,429
  7,201
  8,007
  8,847
  9,723
  10,633
  11,581
  12,565
  13,588
  14,652
  15,757
  16,905
  18,100
  19,343
  20,636
  21,983
  23,385
  24,847
  26,372
  27,963
  29,623
  31,356
  33,167
  35,060
  37,039
Total liabilities, $m
  4,001
  4,432
  5,024
  5,654
  6,320
  7,022
  7,758
  8,530
  9,336
  10,176
  11,052
  11,962
  12,910
  13,894
  14,917
  15,981
  17,086
  18,234
  19,429
  20,672
  21,965
  23,312
  24,714
  26,176
  27,701
  29,292
  30,952
  32,685
  34,496
  36,389
  38,368
Total equity, $m
  2,663
  3,042
  3,448
  3,881
  4,338
  4,819
  5,325
  5,854
  6,407
  6,984
  7,585
  8,210
  8,860
  9,536
  10,238
  10,968
  11,727
  12,515
  13,335
  14,188
  15,075
  16,000
  16,962
  17,966
  19,012
  20,104
  21,243
  22,433
  23,676
  24,975
  26,333
Total liabilities and equity, $m
  6,664
  7,474
  8,472
  9,535
  10,658
  11,841
  13,083
  14,384
  15,743
  17,160
  18,637
  20,172
  21,770
  23,430
  25,155
  26,949
  28,813
  30,749
  32,764
  34,860
  37,040
  39,312
  41,676
  44,142
  46,713
  49,396
  52,195
  55,118
  58,172
  61,364
  64,701
Debt-to-equity ratio
  1.003
  1.020
  1.070
  1.110
  1.150
  1.180
  1.210
  1.230
  1.250
  1.270
  1.280
  1.300
  1.310
  1.320
  1.330
  1.340
  1.340
  1.350
  1.360
  1.360
  1.370
  1.370
  1.380
  1.380
  1.390
  1.390
  1.390
  1.400
  1.400
  1.400
  1.410
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
  642
  760
  885
  1,017
  1,156
  1,302
  1,455
  1,614
  1,781
  1,954
  2,424
  2,612
  2,807
  3,009
  3,219
  3,438
  3,665
  3,902
  4,148
  4,404
  4,670
  4,948
  5,237
  5,539
  5,854
  6,183
  6,526
  6,885
  7,259
  7,651
Depreciation, amort., depletion, $m
  269
  498
  511
  525
  540
  556
  573
  590
  609
  628
  648
  271
  292
  314
  338
  362
  387
  413
  440
  468
  497
  528
  559
  592
  627
  663
  700
  740
  781
  824
  868
Funds from operations, $m
  840
  1,140
  1,271
  1,410
  1,557
  1,712
  1,875
  2,045
  2,223
  2,408
  2,602
  2,695
  2,904
  3,121
  3,347
  3,581
  3,825
  4,078
  4,342
  4,616
  4,901
  5,198
  5,507
  5,830
  6,166
  6,517
  6,883
  7,266
  7,665
  8,083
  8,520
Change in working capital, $m
  44
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -64
  -67
Cash from operations, $m
  796
  1,159
  1,291
  1,431
  1,580
  1,736
  1,900
  2,071
  2,250
  2,437
  2,631
  2,726
  2,936
  3,155
  3,382
  3,617
  3,862
  4,117
  4,382
  4,658
  4,945
  5,244
  5,555
  5,880
  6,218
  6,571
  6,940
  7,325
  7,727
  8,147
  8,587
Maintenance CAPEX, $m
  0
  -88
  -100
  -114
  -128
  -143
  -159
  -176
  -193
  -211
  -230
  -250
  -271
  -292
  -314
  -338
  -362
  -387
  -413
  -440
  -468
  -497
  -528
  -559
  -592
  -627
  -663
  -700
  -740
  -781
  -824
New CAPEX, $m
  -174
  -227
  -243
  -258
  -273
  -287
  -302
  -316
  -330
  -344
  -359
  -373
  -388
  -403
  -419
  -436
  -453
  -471
  -489
  -509
  -530
  -552
  -575
  -599
  -624
  -652
  -680
  -710
  -742
  -775
  -811
Cash from investing activities, $m
  -1,976
  -315
  -343
  -372
  -401
  -430
  -461
  -492
  -523
  -555
  -589
  -623
  -659
  -695
  -733
  -774
  -815
  -858
  -902
  -949
  -998
  -1,049
  -1,103
  -1,158
  -1,216
  -1,279
  -1,343
  -1,410
  -1,482
  -1,556
  -1,635
Free cash flow, $m
  -1,180
  844
  948
  1,060
  1,179
  1,306
  1,439
  1,580
  1,727
  1,882
  2,042
  2,103
  2,278
  2,459
  2,648
  2,844
  3,048
  3,260
  3,480
  3,709
  3,947
  4,195
  4,453
  4,721
  5,001
  5,293
  5,597
  5,914
  6,245
  6,591
  6,953
Issuance/(repayment) of debt, $m
  1,298
  560
  593
  630
  666
  702
  737
  771
  806
  841
  875
  911
  947
  985
  1,023
  1,063
  1,105
  1,149
  1,195
  1,243
  1,293
  1,347
  1,403
  1,462
  1,525
  1,591
  1,660
  1,734
  1,811
  1,893
  1,979
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
  560
  593
  630
  666
  702
  737
  771
  806
  841
  875
  911
  947
  985
  1,023
  1,063
  1,105
  1,149
  1,195
  1,243
  1,293
  1,347
  1,403
  1,462
  1,525
  1,591
  1,660
  1,734
  1,811
  1,893
  1,979
Total cash flow (excl. dividends), $m
  194
  1,403
  1,540
  1,690
  1,845
  2,007
  2,176
  2,351
  2,533
  2,722
  2,918
  3,014
  3,225
  3,444
  3,671
  3,907
  4,153
  4,409
  4,675
  4,952
  5,241
  5,542
  5,856
  6,183
  6,526
  6,883
  7,257
  7,648
  8,057
  8,484
  8,932
Retained Cash Flow (-), $m
  -352
  -379
  -407
  -432
  -457
  -482
  -506
  -529
  -553
  -577
  -601
  -625
  -650
  -676
  -702
  -730
  -758
  -788
  -820
  -853
  -888
  -924
  -963
  -1,003
  -1,046
  -1,092
  -1,139
  -1,190
  -1,243
  -1,299
  -1,358
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
 
  1,025
  1,134
  1,257
  1,388
  1,526
  1,670
  1,822
  1,980
  2,145
  2,317
  2,389
  2,575
  2,768
  2,969
  3,178
  3,395
  3,620
  3,855
  4,099
  4,353
  4,617
  4,893
  5,180
  5,479
  5,792
  6,118
  6,458
  6,814
  7,185
  7,574
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
 
  957
  982
  1,003
  1,012
  1,009
  993
  964
  924
  874
  815
  717
  651
  582
  511
  442
  375
  313
  255
  205
  160
  123
  92
  68
  48
  33
  23
  15
  9
  6
  3
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 34.3
Price to Sales 5.3
Price to Book 6.3
Price to Tangible Book
Price to Cash Flow 21.1
Price to Free Cash Flow 27
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 14.3% 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

▶ ETFs with exposure to Equifax, Inc. : August 15, 2017   [Aug-15-17 04:04PM  Capital Cube]
▶ Equifax Board of Directors Declares Quarterly Dividend   [Aug-04-17 09:00AM  PR Newswire]
▶ Q&A with Rick Smith, 2017 Most Admired CEO   [06:25AM  American City Business Journals]
▶ Equifax tops 2Q profit forecasts   [Jul-26-17 10:14PM  Associated Press]
▶ Equifax Releases Second Quarter Results   [04:15PM  PR Newswire]
▶ ETFs with exposure to Equifax, Inc. : July 24, 2017   [Jul-24-17 03:36PM  Capital Cube]
▶ Equifax: Cramer's Top Takeaways   [Jul-20-17 06:30AM  TheStreet.com]
▶ A not-so-sexy stock that defines the rally   [Jul-19-17 06:42PM  CNBC Videos]
▶ ETFs with exposure to Equifax, Inc. : July 14, 2017   [Jul-14-17 02:08PM  Capital Cube]
▶ 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]
Stock chart of EFX Financial statements 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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