Why Equifax Stock Popped After Earnings
Key Points
Equifax exceeded expectations in Q3.
The mortgage market is weakening, forcing Equifax to lower revenue forecasts -- but not by much.
- Motley Fool Issues Rare "Total Conviction" Buy Alert ›
Equifax (NYSE:EFX) stock, owner of one of the nation's three major consumer credit reporting agencies, exploded 11.5% higher through 11:25 a.m. ET Tuesday after beating earnings this morning.
Analysts had forecast Equifax to earn $2.20 per share, adjusted for one-time items, on $1.69 billion in Q3 sales. In fact, Equifax earned $2.26 per share (adjusted) on sales that met expectations.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Equifax Q3 earnings
Equifax grew its revenue 10% in the third quarter, boosted especially by its U.S. mortgage segment, where revenue grew 15%, and its talent solutions (employee background checks) business, where sales soared 20%. Net income surged ahead 32%, and GAAP earnings per share rose 39%.
GAAP profit didn't quite reach the high levels noted for adjusted profit. Still, those fully-diluted GAAP earnings per share were $1.79, a significant improvement over Q3 2025.
What's next for Equifax stock
Turning to guidance, Equifax warned that high interest rates are dampening mortgage demand, impacting its revenue in that crucial segment, and forcing it to cut its full-year revenue guidance. At the midpoint, management projects revenue of about $6.66 billion this year -- which is still a respectable 9.6% growth rate and not that much worse than Q3's result.
Adjusted earnings per share should be about $8.50 this year, which works out to a valuation of about 21.5 times current-year earnings. Similarly, free cash flow so far this year is $763 million -- about 33% ahead of reported net income. If Equifax can maintain this pace, it might close out the year with more than $1 billion in FCF, and a price-to-free cash flow ratio also of 21x.
At a long-term earnings growth rate projected at 12%, that seems a bit expensive to me. I won't be chasing today's rally to buy Equifax stock.
Should you buy stock in Equifax right now?
Before you buy stock in Equifax, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Equifax wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $376,696!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,333,920!*
Now, it’s worth noting Stock Advisor’s total average return is 925% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 20, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Equifax. The Motley Fool has a disclosure policy.
Recommended Articles
