Investment Thesis
Equifax demonstrates operational competence with 17.4% operating margins and positive free cash flow generation, but fundamental deterioration is evident with net income declining YoY despite 6.9% revenue growth. Critical concerns include severely poor capital efficiency (ROE 3.8%, ROA 1.4%), a current ratio of 0.61x indicating liquidity stress, and high leverage (4.1B long-term debt) that limits financial flexibility and shareholder returns.
Strengths
- Positive operating cash flow of 241.9M demonstrates ability to generate liquidity despite balance sheet concerns
- Operating margin of 17.4% reflects pricing power and operational efficiency in credit reporting services
- Revenue growth of 6.9% YoY shows continued demand and market presence in the consumer credit space
Risks
- Abysmal return on equity (3.8%) and return on assets (1.4%) indicate severely inefficient deployment of shareholder capital
- Current ratio of 0.61x signals liquidity stress and potential working capital management challenges
- Net income declined 0.6% YoY despite revenue growth, revealing margin compression and operational headwinds
Key Metrics to Watch
- Return on Equity trend - critical indicator of whether capital efficiency improves or deteriorates further
- Current ratio movement - liquidity position must return to above 1.0x for financial health
- Net income growth acceleration - must exceed revenue growth rate to validate operational turnaround
Financial Metrics
Revenue
1.6B
Net Income
171.5M
EPS (Diluted)
$1.42
Free Cash Flow
121.5M
Total Assets
11.9B
Cash
183.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
17.4%
Net Margin
10.4%
ROE
3.8%
ROA
1.4%
FCF Margin
7.4%
Balance Sheet & Liquidity
Current Ratio
0.61x
Quick Ratio
0.61x
Debt/Equity
0.89x
Debt/Assets
60.8%
Interest Coverage
4.82x
Long-term Debt
4.1B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T13:18:46.998172 |
Data as of: 2026-03-31 |
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