Despite a drop in earnings, Equifax's high P/E ratio is buoyed by a promising earnings outlook. Investors' bullish sentiment suggests they don't see a significant risk of earnings deterioration.
The company's average ROE, coupled with high debt levels, introduces risk and may limit future options. Despite a decent ROE, the significant use of debt dampens enthusiasm for this business currently.
The stock remains undervalued as its promising future isn't fully reflected in the current price. However, investors should also consider factors like balance sheet strength before investing.
Investors' belief in Equifax's growth potential is indicated by its high P/E ratio. Unless conditions shift drastically, future earnings growth could bolster the share price.
Although Equifax has seen a 136% stock return over the past five years, its constant low rate of return on reinvested capital could limit its capacity to become a multi-bagger.
Despite Equifax’s use of debt to elevate returns, the company has a relatively low ROE that could potentially dampen investor enthusiasm. High-quality businesses typically have a high ROE and low debt, offering more promising expectations for future profit growth.
William Blair analysts remain bullish on Equifax despite the mortgage headwinds, citing strength in non-mortgage revenues and positioning of the Workforce Solutions business. They anticipate significant earnings power upon eventual normalization in mortgage activity levels.
The cut in Equifax's annual outlook due to a weaker mortgage market is causing the company's shares to drop significantly. This low market performance is expected to continue in the fourth quarter, potentially fueling further stock depreciation.
Analysts believe the negative reaction towards EFX is overblown, seeing potential still, especially in long-term treatment. They maintain Overweight and Buy ratings on Akero's stock, indicating perceived value.
艾可菲股票討論區
2023前兩季度營收萎縮2.3%,營業利潤下滑30.6%,淨利潤下滑40.4%。
目前市盈率34,市盈率TTM已經提高到45,估值缺乏吸引力。
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