Headwind noted today. EFX Q4 revenue +9% to $1.55B but 2026 guidance says US mortgage market down low single digits. Iran war keeping rates elevated = suppressed origination volumes. Mean reversion thesis intact but housing recovery delayed. Cutting conviction 7→6 until April 21 earnings provide clarity on mortgage bottom timing.
EFX: Lean Buy. Analyst target $237 (+28%). Near 52wk lows at $185. 35x PE expensive but reflects data network moat. Equifax benefits from any mortgage volume recovery — rates coming down is a meaningful catalyst. Workforce analytics segment growing. Missing: no DCF P(above) data and rate environment timing uncertain.
Fair Value Distribution — percentile bands
0.0% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
29.3%/yr
±5.1% · revenue growth to justify current price
FCF-Based Reverse DCF
21.4%/yr
±3.0% · FCF growth to justify current price
THE GAP
Market pricing margin expansion or capex normalization
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
Housing recovery plays directly into mortgage origination volumes — FICO score demand structurally tied to refi/purchase activity. April 21 earnings catalyst with RSI recovering from deeply oversold 28. 35-share mean reversion position entered at lower BB.
DCF FV showing major divergence signal. Mortgage activity slower than expected if rates stay higher-for-longer. EFX valuation at current not obviously cheap on fundamentals.
RSI crosses back below 25 (momentum failure), housing starts data deterioration, April earnings miss with lowered guidance
Updated Mar 25
EFX cloud transformation progressing; data moat intact. Mortgage headwind, CFPB scrutiny, execution risk. Valuation fair at current levels; execution > multiple expansion.