$36.80
$168.42
bear $36.80
base $117.50
bull $168.42
margin of safety $65.00
market price* $161.25
WHAT THE BUSINESS IS. Equifax is one of the three U.S. national credit bureaus. It sells credit reports, scores, fraud and identity tools and marketing data to lenders and other businesses, and its Workforce Solutions segment (43% of 2025 revenue) verifies employment and income, mainly through the Verification Services line ($2.18 billion of 2025 revenue), and also provides HR outsourcing such as unemployment-claims management. The U.S. produced 77% of 2025 revenue of $6.07 billion; the rest comes from operations in Canada, the U.K., Spain, Portugal, Australia, New Zealand, India and Latin America. Revenue has risen every year from 2015 ($2.66 billion) to 2025, including through 2020 and the 2022-2023 mortgage slowdown. HOW WE MEASURED EARNINGS POWER. We measure owner earnings as operating cash flow, after removing swings in working capital, less stock-based compensation (a real cost, $78 million in 2025), less only the part of capital spending needed to maintain the business. Nearly all capital spending is treated as maintenance because depreciation of property and software ($469 million in 2025) is close to capital spending ($481 million); a small growth portion (about 9.3% of each year's revenue increase) is excluded. To value the business apart from its lenders, we add back the interest paid ($210 million in 2025), value the business, and then deduct the debt. Purchased-intangible amortization ($250 million in 2025) is a non-cash charge from past acquisitions and is added back, but because those assets wear out we kept growth low and fade the bear case after year 10 rather than treat that earning power as permanent. Anchor. We used the middle result of 2022-2025, the years since $2.9 billion of acquisitions in 2021 changed the business; capital spending peaked within this window ($625 million in 2022). Cash flow before interest was about $876 million (2022), $731 million (2023), $963 million (2024) and $1,185 million (2025), so the anchor is about $920 million. We excluded 2019, when the settlements of the 2017 data-breach cases were charged (owner earnings were negative that year), and 2021 because it came before those acquisitions had been absorbed. We did not use the weaker or stronger latest results to set the level. In 2025 business cash flow grew 23%; our base case starts at 4% from the lower anchor, well below that pace, because we do not credit a mortgage recovery (the company itself expects 2026 U.S. mortgage activity to be slightly below 2025). Growth credited and left out. Credited: organic growth from businesses already owned, at a rate below the demonstrated record. Business cash flow compounded about 6.5% a year from 2016 to 2025 (that figure includes acquisitions), revenue has not fallen in any of the last ten years, and Verification Services revenue grew 10% in 2024 and 8% in 2025 driven mainly by non-mortgage customers such as government and talent. Base growth is 4% for two years, 3% for three, and 2% for five, then flat. Left out: future acquisitions and their cost, a mortgage recovery, new products, the fall in capital spending from $625 million (2022) to $481 million (2025), and share buybacks (we value the business, not the share count). THE THREE CASES (per share, using 119.2 million diluted shares). Base ($117.50): the business is worth about $19.1 billion, it owes about $5.1 billion, leaving about $14.0 billion in equity. About $11.2 billion of the business value comes from earnings after year 10, held flat at about $1.2 billion a year because the credit-data and verification franchise, in evidence for decades, keeps operating; no growth is assumed there. Bear ($36.80): business cash flow starts at the 2023 low of $731 million with no growth, then is cut 10% from year 3 (to about $658 million) for the outcome of two named Workforce Solutions matters: an antitrust class action filed in May 2024 covering purchasers of electronic income and employment verification since May 2020, and a Consumer Financial Protection Bureau investigation (civil investigative demands in July 2023, March 2024 and August 2024) into data accuracy and dispute handling. The company says it cannot predict the outcome of either. After year 10 earnings decline 2% a year as purchased intangibles run off with no replacement. The business is worth about $9.5 billion, it owes about $5.1 billion, leaving about $4.4 billion. Even here, business cash flow covers annual interest of roughly $210 million about three times. Bull ($168.42): business cash flow starts at $1,074 million, the average of 2024 and 2025, and grows 6% for two years, 5% for two, 4% for two and 3% for four, then flat, if Verification Services keeps growing at its recent 8-10% pace. The business is worth about $25.2 billion, it owes about $5.1 billion, leaving about $20.1 billion. DEBT. At June 30, 2026 borrowings were $5.47 billion ($1.41 billion due within a year, which includes commercial paper, and $4.06 billion long-term), cash $170 million and outside owners' share of subsidiaries $18 million, a net $5.32 billion. Most debt is fixed at rates below our 6% discount rate: $1.0 billion at 2.35% due September 2031, $600 million at 3.10% due May 2030, $650 million at 4.8% due September 2029 and $1.45 billion at 5.1% due December 2027 and June 2028. That is worth about $225 million in our favor after allowing for the $250 million at 7.0% due 2037 and $125 million at 6.9% due 2028, so we deduct $5.09 billion. About 85% of debt at year-end 2025 was fixed. The revolving credit facility ($1.5 billion, maturing August 2028) requires debt of no more than 3.75 times EBITDA and the company was in compliance at year-end 2025; there are no rating triggers that accelerate its debt. Debt has risen while the company repurchased 4.0 million shares for $928 million in 2025 and diluted shares fell from 125.0 million to 119.2 million between the second quarters of 2025 and 2026; we use the lower share count and the higher debt together. WHAT COULD MAKE THIS WRONG. A prolonged mortgage downturn, an adverse antitrust or CFPB outcome, or another security incident (the 2017 breach led to settlements charged in 2019) would hit the bear case first; leverage magnifies each of these for shareholders. Operating cash flow for the first half of 2026 was flat ($582 million versus $585 million) despite revenue up 12% and net income up 10%, mainly because other assets absorbed $119 million of cash versus $25 million a year earlier, and stock compensation rose to $60.5 million from $46.6 million; we removed working-capital swings, so this does not change our level, but the higher stock compensation is a cost to watch. We used the company's reported June 2026 balance sheet and cash-flow figures but could not review the narrative of that quarterly report, so any commitments made after June 30, 2026 are not reflected. CHANGE SINCE OUR AUGUST 2026 ESTIMATE. Base was $73.95 (bear $12.24, bull $124.47). The increase comes mainly from now using a uniform 6% required return (the long-term government bond yield plus a small premium) instead of 10%, and from valuing the business before interest and then deducting debt. Working the other way, we now start from a somewhat lower earnings level and credit less growth (4% versus 6% in the base case), and we credit only growth that is already demonstrated.