As the Investigation Into How Equifax Inc.'s Breach Affects Canadians Yields Incremental Results, Should Canadians Invest in Equifax?
Equifax Inc.'s (NYSE:EFX) high profile announcement of a security breach which affected more than 145 million Americans and 400,000 Brits has yielded new results relating to the number of Canadians which have been affected by the breach.
On Tuesday, Equifax released a report confirming nearly 12,000 additional Canadian credit cards have been identified as being compromised, along with Social Insurance Numbers and other personal data. This breach has infuriated consumers across the three aforementioned customers, and with approximately 19,000 Canadians confirmed to be impacted by this breach, the legal ramifications of the breach for Equifax remain a concern investors and potential investors will continue to price into the company's equity value.
Immediately following the breach announcement, Equifax's stock price plummeted nearly 40%, reflecting uncertainty with respect to the ramifications this breach will have on the company's earnings moving forward. Since Equifax's share price hit rock bottom below $90 per share, however, the company's share price has since rebounded more than 20%, providing investors who averaged down a potential gain following the breach amid a decent earnings release which highlighted the stability of Equifax's business model.
Equifax remains one major player in an oligopoly of credit rating agencies, and as such typically demands a higher valuation multiple and premium due to the stability and reliability of the company's cash flows. While this data breach raises questions about potential long-term issues with Equifax's cash flows, the risk/reward profile offered by Equifax may be too good to ignore for some.
Invest wisely, my friends.