Equifax Inc

Equifax is facing fresh competitive pressure as Fannie Mae and Freddie Mac move to include VantageScore in mortgage underwriting in 2026, with the Federal Housing Finance Agency directing the two government-sponsored enterprises to use a single pricing grid that applies to both VantageScore and FICO models. Major originators such as Rocket Mortgage are preparing to adopt the dual-score framework, reshaping demand for traditional mortgage credit reports. The shift could alter Equifax's mortgage fee mix and volumes, particularly if the FHFA leans into bi-merge or single-bureau files, which would pressure the volume of full three-bureau reports Equifax sells into that channel and tighten pricing. Equifax, a roughly $16.1b professional services group, would then need higher-margin areas such as The Work Number, government verification contracts and AI-driven productivity gains to carry more of the earnings load. The key markers ahead are how quickly lenders such as Rocket Mortgage shift actual pull volumes toward VantageScore and whether the FHFA finalises bi-merge or single-bureau rules that reduce report count per loan, with concrete disclosures from Equifax on mortgage segment volumes and pricing as the 2026 transition date approaches showing how much revenue mix is at stake.

Fair Isaac shares fell 7% after hours Thursday and TransUnion dropped 6% following a Bloomberg report that the Federal Housing Finance Agency plans to direct Fannie Mae and Freddie Mac to require lenders to pull credit data from two major credit reporting bureaus instead of three. The requirement could be announced as soon as Oct. 12, when FHFA Director Bill Pulte is scheduled to speak at a mortgage industry conference in Chicago, according to a person familiar with the plans cited by Bloomberg. The move would mark another significant change for an industry already under pressure from Pulte, who has repeatedly called for lower credit-reporting and scoring costs in the mortgage market and said on Sept. 3 that the agency was seriously considering bi-merge. It adds to a brutal stretch for FICO, whose shares plunged nearly 49% in September, including a 27% drop on Sept. 29, after FHFA put VantageScore, FICO's main rival, on the same mortgage-pricing grid as the traditional FICO Classic score. Three companies, Equifax, Experian Plc and TransUnion, dominate the credit-reporting industry and jointly own VantageScore, and mortgage lenders have traditionally used a tri-merge report combining credit data from all three bureaus, so the reported change represents a potential double hit: greater competition for FICO in mortgage scoring and lower demand for the bureaus' traditional three-bureau reports.

Equifax shares fell 4.1% in premarket trading after Federal Housing Finance Agency Director Bill Pulte announced a unified mortgage pricing grid, escalating regulatory pressure on credit bureau fees. Pulte said on social media that Fannie Mae and Freddie Mac will consolidate loan-pricing matrices into a single grid, formally incorporating VantageScore alongside FICO Classic. Hours later, competitor TransUnion said it will maintain standalone VantageScore 4.0 pricing at 99 cents through December 2028, giving lenders long-term cost certainty under the expanded FHFA framework. Equifax co-owns VantageScore with TransUnion and Experian, and Pulte said the agency is meeting with the three major bureaus while studying a transition of mortgage underwriting to bi-merge or single-bureau reports to cut consumer closing costs. After the initial drop, Equifax shares recovered to $141.41, down 3% from the previous close, and the stock is down 33.9% year to date, trading 44.9% below its 52-week high of $256.53.

Two student loan borrowers have sued the U.S. Department of Education, alleging that federal loans the department canceled continue to appear as outstanding debt on their credit reports. The proposed class-action lawsuit was filed Thursday in the U.S. District Court for the District of Columbia and seeks damages under the Fair Credit Reporting Act, with the borrowers claiming the department still reports the canceled loans to Equifax, Experian, and TransUnion, according to case materials from the Project on Predatory Student Lending. PPSL noted that from April 2022 through January 2025, the Department of Education announced final group discharges covering more than 1.5 million borrowers and $23.4 billion in federal student loans tied to schools where the department found widespread fraud and misconduct, and it estimates that $4.6 billion of that canceled debt is still being reported to credit bureaus, affecting more than 300,000 people. Mandy Woods, who borrowed about $65,000 to attend Ashford University, said her credit reports showed a $71,901 balance as of August 2026, while Jorge Cortes, a Marine Corps veteran who borrowed to attend ITT Technical Institute, said his reports still showed a $21,586 balance in August 2026 despite his loans being included in the department's August 2022 group discharge. The lawsuit says the FCRA requires companies that furnish information to credit bureaus to investigate disputed information and correct or delete information that is inaccurate, incomplete, or cannot be verified, and the Department of Education did not immediately respond to a request for comment.

Fair Isaac Corporation (FICO) shares fell 15.63% intraday after Federal Housing Finance Agency Director Bill Pulte directed Fannie Mae and Freddie Mac to approve all lenders to use VantageScore, effective immediately, ending a pilot that had been capped at 50 lenders. "FICO has enjoyed a monopoly. No more," Pulte said. Equifax shares dropped 6.65% and TransUnion 6.83%. The move expands on an April pilot where the two government-sponsored enterprises began accepting mortgages scored with VantageScore 4.0. FICO shares are down more than 44% year to date. Pulte also criticized the three credit reporting agencies that own VantageScore—Equifax, Experian, and TransUnion—for overcharging Americans, and said the agency is considering bi-merge and stronger solutions. VantageScore, founded in 2006, is jointly owned by the three agencies. The Trump administration aims to lower homebuyer costs and boost competition in a market FICO dominates, building on the Credit Score Competition Act signed in 2018.

In midday trading, several stocks made notable moves. Guidewire Software plummeted 21% after issuing weaker-than-expected current-quarter revenue guidance of $372 million to $378 million, below the LSEG consensus of $387 million. Tesla dropped 6% following a National Highway Traffic Safety Administration investigation into whether its Cybercab meets federal safety standards, after the company launched robotaxis in Austin. Sandisk and KLA rallied more than 8% and 7% respectively, as the semiconductor sector gained ahead of the long weekend, with the VanEck Semiconductor ETF (SMH) up over 2% and the Roundhill Memory ETF (DRAM) up 5%. Quanex Building Products surged 19% after beating third-quarter estimates with adjusted earnings of 79 cents per share on revenue of $501.8 million, versus the FactSet consensus of 66 cents and $497.5 million. AMC Entertainment rose 6.5% after CEO Adam Aron criticized Robinhood's stock tokens as "contemptible, outrageous, disgusting," while Robinhood slipped nearly 1%. Credit monitoring firms Equifax, TransUnion, and Fair Isaac fell after Federal Housing Finance Agency Director Bill Pulte said they have been "overcharging Americans for too long," with Fair Isaac down over 15%, Equifax down 6.8%, and TransUnion down over 7%. Smith & Wesson gained 6% on an earnings beat, reporting 6 cents per share versus an expected loss of 6 cents, on revenue of $112.6 million versus the $98.7 million consensus. Lululemon Athletica tumbled 17% after forecasting current-quarter earnings of 93 to 98 cents per share on revenue of $2.29 billion to $2.32 billion, below analyst expectations of $2.40 per share and $2.53 billion. Zscaler slipped 5% despite beating earnings estimates, while Adobe fell 6% after announcing Anil Chakravarthy as its next CEO. Asana dropped 14% on weak guidance, Samsara advanced 4% on strong full-year outlook, UiPath lost 16% despite in-line guidance, and Oxford Industries sank 17% after cutting its full-year guidance.

CoStar Group was the weakest performer among nine data and business process services stocks tracked in the second quarter, while EXL led the group with the biggest analyst estimate beat and highest full-year guidance raise. CoStar reported revenues of $925 million, up 18.4% year over year and in line with expectations, but delivered the weakest guidance update and weakest full-year guidance update among its peers. EXL posted revenues of $594.8 million, up 15.6% year over year and beating estimates by 3.5%, with full-year revenue guidance also above expectations. Equifax reported revenues of $1.7 billion, up 10.6% year over year and in line with estimates, but slightly missed full-year EPS guidance. TransUnion reported revenues of $1.31 billion, up 14.9% year over year and beating estimates by 1.8%, while ADP reported revenues of $5.47 billion, up 6.8% year over year and beating estimates by 0.7%. As a group, revenues beat consensus estimates by 1% while next quarter's revenue guidance was 1.3% below, and share prices are up 7.8% on average since the latest earnings results.

A recent Equifax Canada survey reveals that one in four Canadians expect to make only minimum monthly credit card payments, signaling mounting financial pressure on households. The survey of over 1,500 Canadians found that 25 per cent of respondents anticipate affording only minimum payments, while another seven per cent believe they are likely to fall behind. Forty per cent report spending more overall than a year ago, more than double the 18 per cent who are spending less. Households with children and adults under 55 are facing greater strain, with 51 per cent of those with children spending more than last year and 42 per cent using more credit for essential expenses. Among those under 55, 31 per cent expect to make only minimum payments, compared with 16 per cent of those aged 55 and older.

Equifax has raised roughly $1 billion through two back-to-back senior unsecured note offerings. The company issued $500 million of 5.00% notes due 2029 and $500 million of 5.650% notes due 2033, both priced slightly below par. The callable fixed-rate debt locks in funding costs and extends the maturity profile, coming shortly after Equifax repurchased $1.49 billion of stock since April 2025. The combination of new debt and buybacks may increase financial leverage and affect debt-to-equity ratios and interest coverage, with analysts already flagging a high level of debt. Proceeds could support technology investment, acquisitions, and refinancing, while higher fixed interest costs may weigh on margins if earnings growth does not keep pace.

Equifax has agreed to a $2.2 million class action settlement to resolve claims that it reported duplicate collection accounts on certain consumer credit reports in 2022, potentially lowering credit scores and affecting credit access. An estimated 37,000 consumers are part of the settlement class, and those who submit valid claims affirming harm may receive up to $600, though the final amount depends on the number of approved claims. All class members will also receive six months of Equifax Complete credit monitoring without filing a claim. The deadline to submit a claim is September 1, 2026, with a final approval hearing set for October 6, 2026. Equifax denies any wrongdoing and the court has not determined liability.

Shares of Equifax and MSCI fell sharply after both companies reported earnings that beat on revenue but disappointed on margins and outlook. Equifax posted 11% revenue growth and a 13% rise in adjusted earnings per share, yet its stock dropped nearly 7% as adjusted EBITDA margins declined across all segments and third-quarter guidance implied a sequential earnings decline. MSCI saw double-digit revenue and earnings growth but missed earnings expectations, with expenses up 9% driven by higher IT costs, sending its shares down about 11%. Analysts noted that rising compensation and technology costs, including AI-related spending, are pressuring margins at both data-intensive firms, overshadowing otherwise solid operational performance.

Equifax reported second-quarter 2026 revenue of US$1,700.1 million and issued third-quarter guidance of US$1.68 billion to US$1.71 billion in revenue and earnings of US$2.15 to US$2.25 per share. The company completed a US$1.49 billion share repurchase program that reduced its share count by nearly 6%, outlined an expanded AI-driven cost reduction plan, and announced a US$750 million acquisition of Mexico's Círculo de Crédito. Net income eased slightly year-on-year, and the softer third-quarter outlook contributed to a double-digit drop in the stock. These moves are reshaping Equifax's business mix and capital allocation, though execution, leverage, and regulatory risks remain.

Equifax shares fell 7.1% after the credit bureau issued full-year guidance that fell short of analyst expectations. The company reported second-quarter revenue of $1.7 billion and earnings of $2.25 per share, beating estimates of just under $1.7 billion and $2.20 per share. However, Equifax forecast third-quarter revenue between $1.68 billion and $1.71 billion and earnings between $2.15 and $2.25 per share, below consensus estimates of $1.71 billion and $2.27 per share. For the full year, the company expects earnings of $8.39 to $8.69 per share on revenue of $6.71 billion to $6.78 billion, compared to analyst projections of $8.60 per share and $6.76 billion. A shrinking mortgage loan market, with 30-year mortgage rates around 6.6%, is a key headwind.

StockStory has identified Tetra Tech as a resilient business services stock with strong fundamentals, while recommending investors sell CDW and Equifax. Tetra Tech, a consulting and engineering firm focused on water and environmental solutions, posted 13.3% annual revenue growth over five years and saw its free cash flow margin rise by 3.6 percentage points. In contrast, CDW faces sluggish demand with projected sales growth of just 3% and declining profitability, while Equifax has experienced shrinking operating margins and weak earnings growth. Tetra Tech trades at $30.94 per share, CDW at $143.61, and Equifax at $166.47.

Equifax shares have fallen 25.8% over the past six months to $158.71, prompting caution from analysts. The company's adjusted operating margin shrank by 3.9 percentage points over five years to 20.1%, while earnings per share grew at a weak 1.4% annual rate despite 7.5% revenue growth. Return on invested capital remained flat, and the stock now trades at 17.8 times forward earnings. Analysts suggest investors consider a fast-growing restaurant franchise instead.

TransUnion is benefiting from the rapidly expanding big data and analytics market, driven by strong demand for data-backed business insights. The company reported first-quarter 2026 adjusted earnings of $1.18 per share, beating the Zacks Consensus Estimate by 6.3% and rising 12.4% year over year, while revenues of $1.25 billion exceeded estimates by 3.1% and grew 13.7%. TransUnion continues to leverage its OneTru platform to launch new products and enhance analytics, and in March 2026 it acquired approximately 94% of Trans Union de Mexico to expand in the Mexican market. However, the company faces significant competition from firms like Equifax, Experian, and LexisNexis, which may limit pricing power and profitability, and it carries elevated debt from past acquisitions. TransUnion's current ratio of 1.93 at the end of the first quarter indicates strong liquidity, but seasonal patterns in its U.S. and international segments create forecasting challenges.

Fair Isaac Corporation shares have dropped roughly 50% from a 52-week high of $2,206 in May 2025 to around $1,076 by late June 2026, leaving a market capitalization of about $26 billion. The decline followed a Federal Housing Finance Agency decision clearing lenders to use VantageScore 4.0 on mortgages sold to Fannie Mae and Freddie Mac, ending FICO's exclusive role in that channel, with implementation confirmed in April 2026. Even after the drop, the stock trades at about 33 times trailing earnings of $32.76 per share and roughly 27 times guided non-GAAP earnings of $40.45 per share, while the Scores segment grew 60% to $475.0 million at a 91% operating margin in the second quarter of fiscal 2026. Management raised full-year revenue guidance to about $2.45 billion and authorized a new $2 billion share repurchase program, though the company carries negative shareholders' equity from years of aggressive buybacks. Institutional investors are split, with 411 funds adding to positions and 576 trimming in the most recent quarter, while Akre Capital Management built its stake aggressively and Baron Asset Fund named Fair Isaac a contributor.