Equifax Gears up to Report Q3 Earnings: What's in the Offing?

Equifax EFX is scheduled to report third-quarter 2024 results on Oct.16, after market close.

EFX has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters and missing in one, the average being 3.2%.

EFX's Q3 Expectations

The Zacks Consensus Estimate for Equifax's top line is pegged at $1.4 billion, indicating a 9.5% rise from the year-ago quarter's actual. An improved segmental performance is expected to have benefitted the top line.

The consensus estimate for earnings per share is pegged at $1.8, suggesting a 4.6% increase on a year-over-year basis. A strong margin performance is anticipated to have driven the bottom line.

Segment Level Expectations for EFX

Our estimate for total International revenues is anticipated to increase 25.4% from the year-ago quarter's actual to $366.4 million. Continued growth in revenues in Europe and Latin America is expected to have driven international revenues.

Our expectation for third-quarter 2024 revenues from U.S. Information Solutions ("USIS") is pegged at $459.4 million, implying a 7.8% rise from the year-ago quarter's reported number. A strong pricing environment, coupled with the strength of EFX's pre-qual products, is anticipated to have driven this segment's revenues.

Revenues from Workforce Solutions are likely to grow 7.1% year over year. Our estimate is pegged at $618.1 million.

Adjusted EBITDA for the USIS and International segments are expected to witness year-over-year growth of 7.2% and 24.2% to $156.3 million and $102.9 million, respectively. The metric is anticipated to have been driven by strong revenue growth. The adjusted EBITDA for Workplace Solutions is likely to be $318.3 million, up 8.4% from the year-ago quarter's actual. We expect this segment's adjusted EBITDA to have been driven by strong non-mortgage verifier revenue growth and efficient cost execution.

What Our Model Says About EFX

Our proven model predicts an earnings beat for Equifax. 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. This is the case here.

EFX has an Earnings ESP of +1.56% and a Zacks Rank #2 at present.

Other Stocks to Consider

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

Booz Allen Hamilton BAH: The Zacks Consensus Estimate for the company's second-quarter fiscal 2025 revenues is pegged at $3 billion, implying a 10.9% increase from the year-ago quarter's reported figure. For earnings, the consensus mark is pegged at $1.5 per share, suggesting a 14.7% rise from the year-ago quarter's actual. The company beat the consensus estimate in two of the past four quarters and missed in two instances, with an average surprise of 5.8%.

BAH currently has an Earnings ESP of +0.17% and a Zacks Rank of 2. The company is scheduled to declare its second-quarter fiscal 2025 results on Oct. 25.

Fiserv FI: The Zacks Consensus Estimate for the company's third-quarter 2024 revenues is pegged at $4.9 billion, indicating a year-over-year 6.3% rise. For earnings, the consensus mark is pegged at $2.3 per share, suggesting a 14.8% rise from the year-ago quarter's reported figure. The company beat the consensus estimate in the past four quarters, with an average surprise of 2.8%.

FI currently carries an Earnings ESP of +0.12% and a Zacks Rank of 2. The company is scheduled to declare its third-quarter 2024 results on Oct. 22.

To read this article on Zacks.com click here.