FactSet Beats Q1 Earnings Expectations

Factset Research (NYSE: FDS) reported stronger-than-expected fiscal Q1 results, topping both earnings and revenue estimates driven by robust continuing business momentum.

Based in the U.S., FactSet Research is a financial data and software company that provides integrated financial information, analytical applications and software services including client support & learning, implementation services, business advisory, data delivery, index services, portfolio data management, and transition services.

Q1 Beat

Notably, adjusted earnings of $3.25 per share grew 12.8% year-over-year and significantly beat analysts’ expectations of $2.99 per share. The company reported earnings of $2.88 per share for the prior-year period.

Furthermore, revenues jumped 9.4% year-over-year to $424.7 million and exceeded consensus estimates of $419.13 million. The increase in revenues reflected a surge in organic revenues, which increased 9.1% to $423.2 million, as well as higher sales of analytics and research and advisory solutions.

However, operating margin declined 230 bps to 28.9% due to restructuring costs and real estate exit costs.

Positively, on December 20, FactSet was added to the S&P 500 Index, 2021.

Dividends & Buybacks

During the quarter, the company paid a quarterly dividend of $0.82 per share and also repurchased 46,200 shares of its common stock for $18.6 million at an average price of $403.44. Under the current program, $181.3 million remains available for share repurchases as of December 21, 2021.

Guidance

Based on robust Q1 results, management reiterated the financial guidance for fiscal 2022. The company forecasts adjusted earnings in the range of $12.00 per share to $12.30 per share, while the consensus estimate is pegged at $12.22 per share. Revenues are forecast to be in the range of $1.71 billion to 1.72 billion, versus the consensus estimate of $1.95 billion.

CEO comments

FactSet CEO, Phil Snow, commented, “It is clear that the investments we have made in our business are paying off in top line growth. Demand for differentiated content remains strong, which we intend to capitalize on with our leading open content and analytics platform.”

Analysts Recommendation

Overall, the stock has a Hold consensus rating based on 1 Buy, 5 Holds and 2 Sells. At the time of writing, the Factset Research price target was $405.29, which implies 14% downside potential from current levels.