Equifax Inc. (EFX): A Bull Case Theory 

We came across a bullish thesis on Equifax Inc. on CompoundingLab’s Substack. In this article, we will summarize the bulls’ thesis on EFX. Equifax Inc.’s share was trading at $212 recently. EFX’s trailing and forward P/E were 45.38 and 25.77 respectively according to Yahoo Finance.

Equifax Inc. (EFX) stands at the nexus of data, credit, and human capital, evolving from a traditional credit bureau into a diversified analytics and verification powerhouse. While often grouped with Experian and TransUnion, Equifax’s transformation has deepened its recurring revenue base—now exceeding half of total sales—and expanded its data ecosystem across employment, income, and identity verification.

Despite this structural progress, the stock has lagged the S&P 500, declining 20% over the past year versus a 21% gain in the index, largely due to cyclical weakness in mortgage originations that has weighed on its Workforce Solutions segment, which contributes around 43% of total revenue. Other segments, including U.S. Information Solutions and International, have remained stable but insufficient to offset the slowdown. Nonetheless, management’s guidance for low-double-digit EPS growth into FY2025 reflects confidence in operating leverage, normalization of credit cycles, and pricing strength.

Return on invested capital, at a 10-year median of roughly 8%, remains below the cost of capital but is improving as analytics and subscription-based products scale. The company’s balance sheet, with debt-to-equity near 95%, is supported by resilient cash flows. Equifax’s wide moat lies in its proprietary employment and income databases—vital for verification across U.S. lenders and government agencies—and its deep integration into financial and HR systems, creating powerful network effects.

Revenue has grown at a 9% CAGR over the past decade, with 7–9% annualized growth projected through 2027. With a 33x P/E and intrinsic value estimated at $270 per share (~22% upside), the market appears to undervalue Equifax’s long-term data infrastructure potential as cyclical pressures subside and its high-quality earnings base strengthens.

Previously we covered a bullish thesis on TransUnion (TRU) by LongTermValue Research in April 2025, which highlighted the company’s strong position in the credit reporting triopoly and its undervaluation relative to peers. The company’s stock price has depreciated approximately by 5.3% since our coverage. This is because the thesis hasn’t yet played out. The thesis still stands as credit demand remains resilient. CompoundingLab shares a similar view but emphasizes Equifax’s recurring revenue strength and broader data ecosystem within the same industry.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.