Equifax falls after weak guidance on mortgage market woes

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Third quarter revenue rose 6% to $1.319 billion but missed the consensus of $1.33B. Adjusted EPS rose 2% to $1.76, also missing the consensus of $1.79.

For the year, the company reduced the midpoint of its revenue guidance by $44 million to $5.256B and adjusted EPS guidance was reduced by $0.31 to $6.67 per share. The guidance was also below the consensus of $5.29B and $6.91, respectively.

Equifax expects the weaker U.S. mortgage market at current high interest rates to continue in the fourth quarter, and they now expect full-year Equifax mortgage credit inquiries to decline about 34%, down 3% from its prior forecast.

Analysts expect the stock to be under pressure today.

“Our holistic assessment is that key metrics (Revenue, Adjusted EBITDA, Adjusted EPS) were all below expectations and revenue guidance for 4Q23 was lowered to levels that are below consensus estimates despite the addition of Boa Vista acquisition revenue,” analysts at Stifel commented. “The main issue seems to be lower mortgage volumes than what the company was expecting, along with some incremental FX headwinds. The stock is likely to be particularly weak tomorrow (it is down ~6.5% aftermarket vs. flat S&P 500).”