Equifax (EFX) benefits from buyouts and innovation, debt

Equifax inc.EFX shares have gained 70.7% in the past year compared to a 23.3% decline in the industry it belongs to.

The company recently reported adjusted earnings per share of $ 1.85 in the third quarter of 2021, beating Zacks’ consensus estimate by 7.6%. Revenues of $ 1.22 billion were 3.6% above the consensus estimate.

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What is behind the rally?

Equifax serves a wide range of industries, such as finance, mortgage, consumer, telecommunications, automotive, commerce, retail, government, dealers and more. This diverse customer base is very beneficial, as weakness in any industry can be offset by strength in others.

The company’s turnover has shown decent growth rates in recent years. Total revenue has grown at a compound annual growth rate (CAGR) of 5.6% over the past five years (2016-2020). Revenue improved 14.5% year-over-year in the second quarter of 2021.

Acquisitions, over time, have enabled the company to provide broad insight into consumer performance, financial condition, customer capabilities and market opportunities. We believe that synergies from acquisitions, in addition to the continued general consumer credit business, product innovation, initiatives to drive business growth and efficient business executions, will continue to drive revenues. long-term Equifax.

Equifax’s total debt at the end of the third quarter of 2021 was $ 4.96 billion, up from $ 3.28 billion at the end of the previous quarter. The company’s cash and cash equivalents of $ 2.03 billion at the end of the quarter were well below this level of leverage, highlighting that the company does not have enough cash to meet this burden of debt. Moreover, the cash level cannot even cover the short-term debt of $ 500.6 million.

Rank Zacks and other actions to consider

Equifax currently holds a Zacks Rank # 3 (Hold).

You can see The full list of today’s Zacks # 1 (strong buy) stocks here.

Some other top-ranked stocks in the Business services sector are Budget Notice RCA and Cross Country Health Care CCRN, both sporting a Zacks Rank # 1, and Charles River Partners CRAI, wearing a Zacks Rank # 2 (Buy).

Avis Budget has an expected profit growth rate of 420.6% for the current year. The company has a surprise earnings for the last four quarters of 76.9% on average.

Avis Budget shares have jumped 719.1% in the past year. The company shows long-term profit growth of 18.8%.

Cross Country Healthcare has an expected profit growth rate of 447.8% for the current year. The company has a surprise of 75% on average over the last four quarters.

Shares of Cross Country Healthcare have jumped 201.2% in the past year. The company shows long-term profit growth of 21.5%.

Charles River Associates has an expected earnings growth rate of 61.2% for the current year. The company has a profit surprise for the last four quarters of 51%, on average.

Charles River shares have jumped 120.2% in the past year. The company shows long-term profit growth of 15.5%.

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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.

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