Equifax Inc.EFXNYSE

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Sell

Fair Value: $175.49 per share(market-calibrated)

-15.0%

Upside to Fair Value

Current

$206.43

Pure Model

$172.04

Fair Value

$175.49

Bull Case

$226.77

Bear Case

$123.18

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

5.70%

Calibrated Growth

2.77%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $172.04.

What's Driving This Ratingfor EFX

↓

CapEx normalizing toward maintenance

Historical CapEx is 8.85% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$562M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Strong near-term revenue growth

Analyst consensus projects 11.21% revenue growth in Year 1, fading to 4.36% by Year 5 and 2.25% by Year 10. Revenue reaches $10.5B by Year 10 (vs $6.1B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $129.57/share (13.0x terminal FCF) while exit multiple gives $214.51/share (25.3x terminal FCF). The 18x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 2.25% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $206.43, the market implies 5.70% perpetual growth — 345bps above the model's 2.25%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 71.19% indicates efficient cash generation. FCF reaches $2.2B by Year 10 (21.29% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.56

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)11.52%

Cost of Debt

Pre-tax Cost of Debt3.97%

Tax Rate25.77%

After-tax Cost of Debt2.95%

Equity Weight (E/V)83.31%

Debt Weight (D/V)16.69%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (83.31% × 11.52%) + (16.69% × 2.95%)

= 10.09%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$6.8B	$8.1B	$9.0B	$9.7B	$10.5B
EBIT	$1.3B	$1.6B	$1.8B	$1.9B	$2.1B
Tax	$344M	$412M	$459M	$494M	$534M
NOPAT	$990M	$1.2B	$1.3B	$1.4B	$1.5B
+ Depreciation	$686M	$822M	$916M	$986M	$1.1B
- Capex	$598M	$620M	$584M	$513M	$368M
- Δ NWC	$8M	$8M	$4M	$4M	$3M
Free Cash Flow	$1.1B	$1.4B	$1.6B	$1.9B	$2.2B
Discount Factor	0.908	0.750	0.618	0.510	0.383
Present Value	$972M	$1.0B	$1.0B	$965M	$855M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.2B

Terminal Growth Rate2.25%

WACC10.09%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$29.2B

PV of Terminal Value$11.2B

Exit Multiple Method

Year 10 EBITDA$3.1B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$56.5B

PV of Terminal Value$21.6B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$9.7B

PV of Terminal Value$11.2B

Enterprise Value$20.9B

(-) Net Debt$4.9B

Equity Value$16.0B

Shares Outstanding123M

Price per Share$129.57

Exit Multiple Method

PV of Projected FCFs$9.7B

PV of Terminal Value$21.6B

Enterprise Value$31.3B

(-) Net Debt$4.9B

Equity Value$26.4B

Shares Outstanding123M

Price per Share$214.51

Pure Model Fair Value

$172.04

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
8.09%	$214.43	$219.64	$225.73	$232.97	$241.70
9.09%	$188.25	$191.86	$195.99	$200.78	$206.39
10.09%	$166.52	$169.11	$172.04	$175.36	$179.17
11.09%	$148.08	$150.00	$152.14	$154.53	$157.22
12.09%	$132.20	$133.65	$135.25	$137.02	$138.99

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$123.18

-40.3% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.95

Base Case

$172.04

-16.7% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 1.56

Bull Case

$226.77

9.9% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 1.33

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth11.21%

Year 3 Revenue Growth9.52%

Year 5 Revenue Growth4.36%

Year 7 Revenue Growth3.52%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin19.74%

Tax Rate25.77%

Historical Capex / Rev8.85%

Terminal Capex / Rev3.50%

NWC / Revenue1.18%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (Industrials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance