We see Equifax as a high-quality, capital light, compounder. In our opinion EWS (56% of EBITDA) is a very attractive fast-growing business, with unique data asset and monopoly like returns and positioning
EWS long term growth of 13-15% is likely and over the next few years. Any recovery in mortgage volume would be a major driver of earnings growth as it has ~90% incremental EBIDA margins.
We think Equifax is approximately fair value. However, it looks like a compounder to us, with a monopoly like business that can give us mid-teens returns.
Potential Upside: $335 (+30%)
Potential Downside: $200 (-22%)
To see our work on Bloomberg: NH ABU <go>
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