DCF Studio

    EFX · NYQ · Industrials

    Equifax Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 62.77

    Market price

    USD 158.87

    Implied upside

    -60.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 62.77-60.5%
    Exit multiple
    USD 165.18+4.0%
    Market price
    USD 158.87

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 6.4bnUSD 6.8bnUSD 7.2bnUSD 7.6bnUSD 8.1bn+5.8%
    EBITUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.5bn+5.8%
    NOPATUSD 948.9mUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+5.8%
    Add depreciation & amortisationUSD 752.6mUSD 796.6mUSD 843.2mUSD 892.5mUSD 944.7m+5.8%
    Less capital expenditureUSD -651.7mUSD -689.8mUSD -730.1mUSD -772.8mUSD -818.0m+5.8%
    Less increase in working capitalUSD 18.7mUSD 19.8mUSD 21.0mUSD 22.2mUSD 23.5m-5.8%
    Free cashflow to firmUSD 1.1bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.3bn+5.8%
    Discount factor0.95360.86710.78840.71690.6518-
    Present valueUSD 1.0bnUSD 980.6mUSD 943.8mUSD 908.4mUSD 874.3m-3.8%
    Present Value Of The ForecastUSD 4.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.204Reported 1.305, pulled toward 1.0 (Blume)
    Cost of equity11.62%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 18.7bn78.6% of capital
    Total debtUSD 5.1bn21.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.98%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 62.77

    63% of EV

    Forecast FCFF, final year
    USD 1.3bn
    Capex at depreciation, working capital in reinvestment
    USD 1.2bn
    Less reinvestment at g/ROIC (25.1% of NOPAT)
    USD -298.5m
    Capitalised
    USD 892.6m
    ROIC (WACC floor)
    10.0%
    Terminal value, undiscounted
    USD 12.2bn
    Terminal value, discounted
    USD 8.0bn
    Enterprise value
    USD 12.7bn
    Less net debt
    USD 4.9bn
    Equity value
    USD 7.8bn

    Exit at 12.9x EBITDA

    Value per shareUSD 165.18

    81% of EV

    Terminal value, undiscounted
    USD 31.7bn
    Terminal value, discounted
    USD 20.7bn
    Enterprise value
    USD 25.4bn
    Less net debt
    USD 4.9bn
    Equity value
    USD 20.5bn

    Spread between methods: 90%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.98%87.8888.8589.9191.1192.48
    8.98%73.0673.4273.7874.1574.51
    9.98%62.1462.4662.7763.0863.40
    10.98%53.2153.4953.7654.0354.31
    11.98%45.7746.0146.2546.4946.73

    Outlined: this model. Green text: above today's price of 158.87. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year5.8%22.9%+17.1pp
    EBIT margin18.7%37.0%+18.3pp
    Discount rate10.0%5.9%-4.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.