FactSet Research Beats Q4 Expectations; Shares Jump

FactSet Research Systems, Inc. (FDS) reported better-than-expected fourth-quarter results backed by elevated sales across all segments and higher Annual Subscription Value (ASV) growth. Shares jumped 3.8% on the news, closing at $383.29 on September 28.

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FactSet is a provider of integrated financial information, analytical applications, and industry services for investment and corporate communities. With a market cap of $14.48 billion, FactSet’s shares have gained 14.8% over the past year. (See FactSet Research stock charts on TipRanks)

The company reported adjusted earnings of $2.88 per share, in line with the prior-year quarter, while meaningfully surpassing analysts’ estimates of $2.72 per share.

To add to that, revenue for the quarter climbed 7.4% to $411.89 million and outpaced the Street’s estimate of $404.97 million. Revenue growth was attributed to higher sales in analytics, content and technology solutions (CTS), and research.

For the full year 2021, FDS reported adjusted earnings of $11.20 per share, up 3% year-over-year. Also, annual revenue jumped 6.5% to $1.59 billion.

Furthermore, ASV plus professional services, a metric that represents forward-looking revenue for the next twelve months, increased 7.2% year-over-year to $1.69 billion as of August 31, 2021.

Pleased with the financial performance, Phil Snow, CEO of the company, said, “As we planned, two years of accelerated investment in content and technology is paying dividends. We enter next fiscal year with momentum and believe our strategy to scale our content refinery and create personalized workflow solutions will increase our market share.”

Based on its current business scenario and momentum, FactSet guided for full-year Fiscal 2022 revenue to fall in the range of $1.705 – $1.720 billion, much higher than the consensus estimate of $1.67 billion.

Additionally, FY22 adjusted earnings are forecasts to be in the range of $12 – $12.30 per share versus the consensus estimate of $11.83 per share.

Recently, Morgan Stanley analyst Toni Kaplan lifted the price target on the stock to $286 (25.4% downside potential) from $273 while maintaining a Sell rating.

Overall, the stock has a Moderate Sell consensus rating based on 2 Buys, 3 Holds, and 5 Sells. The average FactSet Research price target of $339.38 implies 11.5% downside potential to current levels.