Equifax has gotten torched over the last six months - since October 2025, its stock price has dropped 22.7% to $179.67 per share. This might have investors contemplating their next move.

Is there a buying opportunity in Equifax, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Equifax Not Exciting?

Despite the more favorable entry price, we don't have much confidence in Equifax. Here are two reasons we avoid EFX and a stock we'd rather own.

1. Shrinking Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Analyzing the trend in its profitability, Equifax’s adjusted operating margin decreased by 4.1 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its adjusted operating margin for the trailing 12 months was 20%.

2. EPS Barely Growing

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Equifax’s EPS grew at a weak 2.2% compounded annual growth rate over the last five years, lower than its 8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

Equifax isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 20.9× forward P/E (or $179.67 per share). Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We're fairly confident there are better stocks to buy right now. We’d recommend looking at one of Charlie Munger’s all-time favorite businesses.

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