Here’s What to Expect From Equifax’s (EFX) Q2 Earnings

Equifax Inc. EFX is scheduled to release its second-quarter 2023 results on Jul 19, after market close.

Equifax has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average surprise is 3.6%.

Q2 Expectations

The consensus estimate for the top line is currently pegged at $1.32 billion, slightly lower than the year-ago actual figure. The downtick can be attributed to a likely decline in the U.S. mortgage market due to higher interest rates and lower mortgage origination.

The Zacks Consensus Estimate for earnings per share (EPS) is pegged at $1.67, down 20.1% year over year. The estimate has been revised downward by 1.2% in the past 60 days. Growing operational costs and rising customer migration costs to the new Equifax cloud are likely to have weighed on the company’s bottom line.

Equifax, Inc. Price and EPS Surprise

Equifax, Inc. price-eps-surprise | Equifax, Inc. Quote

Segmental Information

Our estimate for second-quarter 2023 revenues from U.S. Information Solutions (USIS) is currently pegged at $398.9 million, down 5.3% from the second-quarter 2022 reported figure. Total International revenues are expected to match the year-ago figure. Our estimate for the same is currently pegged at $293 million, implying 2.4% growth from the second-quarter 2022 actuals. Revenues from Workforce Solutions are expected to grow 2.1% on a year-over-year basis. Our estimate is currently pegged at $621.7 million.

Adjusted EBITDA is likely to have benefited from the strong non-mortgage revenue performance. USIS and International segments are expected to witness a respective gain of 25.6% and 24.7% to $202 million and $72.4 million, respectively. For Workforce Solutions, adjusted EBITDA is likely to have gone down to $284.7 million, indicating 12.5% decline from year-ago reported figures.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for EFX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Equifax has an Earnings ESP of +2.02% and a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks from the broader Business Services sector, which according to our model, have the right combination of elements to beat on earnings this season.

Aptiv APTV currently has an ESP of +9.49% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

It is scheduled to report second-quarter 2023 results on Aug 3, before market open.

The Zacks Consensus Estimate for the bottom line is pegged at $1 per share, up more than 100% from the year-ago figure. The consensus mark for revenues is pegged at $4.64 billion, up 14.5% from the figure reported a year ago. APTV had an average negative surprise of 8.1% in the previous four quarters.

Avis Budget CAR currently has an ESP of +1.46% and a Zacks Rank of 1. It is scheduled to report second-quarter 2023 results on Jul 31, after market close.

The Zacks Consensus Estimate for earnings is pegged at $9.78 per share, down 38.6% from the year-ago figure. The consensus mark for revenues is pegged at $3.19 billion, down 1.6% from the prior-year figure. CAR delivered an average surprise of 65.2% in the previous four quarters.

S&P Global SPGI currently has an ESP of +1.39% and a Zacks Rank of 3. It is scheduled to report second-quarter 2023 results on Jul 27, before market open.

The Zacks Consensus Estimate for the bottom line is pegged at $3.08 per share, up 9.6% from the year-ago reported figure. The consensus mark for revenues is pegged at $3.04 billion, up 1.6% from the prior-year reported figure. APTV delivered an average negative earnings surprise of 3.1% in the previous four quarters.

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