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Factset Research (FDS)
:FDS
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Factset Research
(NYSE:FDS)
74Outperform
Positive Factors
Earnings Performance
FDS delivered EPS above Street expectations, indicating strong financial performance.
Revenue Growth
Revenue exceeded expectations, suggesting effective revenue generation strategies.
Negative Factors
ASV Growth
Organic ASV growth of 4.1% was below expectations, indicating a slowdown in growth.
Market Outlook
The price target was lowered to $390 from $409, reflecting a cautious outlook.
Factset Research (FDS) vs. S&P 500 (SPY)
Market Cap
$15.83B
Dividend Yield1%
Average Volume (3M)321.51K
Price to Earnings (P/E)29.6
Beta (1Y)0.71
Revenue Growth4.66%
EPS Growth11.15%
CountryUS
Employees12,598
SectorFinancial
Sector Strength78
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)14.07
Shares Outstanding38,030,045
10 Day Avg. Volume359,657
30 Day Avg. Volume321,515
Financial Highlights & Ratios
PEG Ratio2.65
Price to Book (P/B)N/A
Price to Sales (P/S)7.38
Price to Cash Flow (P/CF)47.70
P/FCF Ratio41.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$445.63Price Target Upside7.07% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering10
Factset Research Business Overview & Revenue Model
Company DescriptionFactSet Research Systems Inc., a financial data and analytics company, provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company delivers insight and information through the workflow solutions of research, analytics and trading, content and technology solutions, and wealth. It serves portfolio managers, investment banks, asset managers, wealth advisors, corporate clients, and other financial services entities. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.
How the Company Makes MoneyFactSet makes money through a subscription-based revenue model where clients pay for access to its suite of financial data and software solutions. The company's key revenue streams include selling licenses for its analytics and research platforms, providing enterprise solutions such as data feeds and APIs, and offering consulting services to optimize the use of its products. FactSet also generates revenue through strategic partnerships and collaborations with other data providers and financial institutions, enhancing its product offerings. The company's focus on innovation and integration of new data sources contributes significantly to its earnings by attracting and retaining clients in the competitive financial services industry.
Factset Research Financial Statement Overview
Summary
Factset Research demonstrates a strong financial position characterized by impressive margins, stable growth, and efficient capital management. While the company manages its debt effectively, vigilance is required to maintain this balance amidst a significant debt level. Overall, the financial health is solid, with strong cash flow generation supporting ongoing operational and strategic initiatives.Income Statement
Factset Research has shown strong revenue growth with a recent TTM (Trailing-Twelve-Months) revenue increase of over 20% compared to two years ago. The gross profit margin is robust at approximately 54.3% in the latest TTM period, indicating solid profitability. Net profit margin remains healthy at 24.1%, showcasing effective cost management and operational efficiency. EBIT and EBITDA margins are stable, indicating consistent operational performance.85
Very Positive
Balance Sheet
The company's balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.78, indicating manageable leverage. The equity ratio stands at 49.3%, suggesting a strong equity base relative to total assets. Return on Equity (ROE) is impressive at 27.0%, highlighting efficient use of shareholder capital. However, the total debt level is significant, which may pose risks if market conditions change.78
Positive
Cash Flow
Factset Research's cash flow performance is commendable with a free cash flow to net income ratio of 1.00, showing excellent cash conversion. Free cash flow growth is strong, reflecting effective capital expenditure management. Operating cash flow remains robust, indicating healthy cash generation from core operations, though there was a slight decrease in operating cash flow compared to the previous year.82
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.25B | 2.20B | 2.09B | 1.84B | 1.59B | 1.49B | Gross Profit |
| 1.22B | 1.19B | 1.11B | 972.79M | 805.04M | 798.66M | EBIT |
| 706.65M | 701.30M | 630.21M | 475.48M | 474.04M | 439.66M | EBITDA |
| 844.84M | 831.16M | 801.66M | 610.36M | 581.08M | 540.38M | Net Income Common Stockholders |
| 542.51M | 537.13M | 468.17M | 396.92M | 399.59M | 372.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 278.55M | 492.60M | 457.65M | 536.49M | 717.85M | 605.18M | Total Assets |
| 4.24B | 4.06B | 3.95B | 4.01B | 2.22B | 2.08B | Total Debt |
| 1.66B | 1.57B | 1.84B | 2.22B | 866.25M | 875.68M | Net Debt |
| 1.38B | 1.15B | 1.41B | 1.72B | 184.38M | 290.07M | Total Liabilities |
| 2.18B | 2.14B | 2.33B | 2.68B | 1.21B | 1.19B | Stockholders Equity |
| 2.06B | 1.91B | 1.62B | 1.33B | 1.02B | 898.17M |
| Cash Flow | Free Cash Flow | ||||
| 564.82M | 614.66M | 584.79M | 487.12M | 493.90M | 428.20M | Operating Cash Flow |
| 661.72M | 700.34M | 645.57M | 538.28M | 555.23M | 505.84M | Investing Cash Flow |
| -399.12M | -144.32M | -95.39M | -2.03B | -135.99M | -73.63M | Financing Cash Flow |
| -347.17M | -560.85M | -632.02M | 1.34B | -322.71M | -218.07M |
Factset Research Technical Analysis
Negative
416.19
Price Trends
451.64
Negative
464.65
Negative
448.23
Negative
Market Momentum
-0.65
Negative
60.72
Neutral
91.65
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FDS, the sentiment is Negative. The current price of 416.19 is below the 20-day moving average (MA) of 438.87, below the 50-day MA of 451.64, and below the 200-day MA of 448.23, indicating a bearish trend. The MACD of -0.65 indicates Negative momentum. The RSI at 60.72 is Neutral, neither overbought nor oversold. The STOCH value of 91.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FDS.
Factset Research Risk Analysis
Factset Research disclosed 30 risk factors in its most recent earnings report. Factset Research reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Factset Research Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $15.83B | 29.57 | 28.12% | 1.00% | 4.66% | 11.15% | |
74 Outperform | $141.70B | 36.56 | 11.44% | 0.82% | 13.68% | 49.90% | |
73 Outperform | $42.23B | 38.74 | -117.99% | 1.30% | 12.94% | -2.54% | |
70 Outperform | $79.58B | 39.27 | 59.80% | 0.87% | 19.81% | 28.97% | |
70 Outperform | $12.44B | 33.89 | 25.11% | 0.57% | 11.60% | 161.17% | |
63 Neutral | $12.86B | 9.17 | 9.14% | 4.78% | 16.41% | -10.11% | |
62 Neutral | $3.90B | ― | -0.85% | 2.29% | 2.93% | 39.49% |
* Financial Sector Average
Performance Comparison
FDS
Factset Research
416.19
-19.93
-4.57%
SPGI
S&P Global
451.50
20.62
4.79%
MCO
Moody's
402.43
9.34
2.38%
MORN
Morningstar
268.76
-43.66
-13.97%
MSCI
MSCI
507.44
-35.12
-6.47%
DNB
Dun & Bradstreet Holdings
8.73
-0.70
-7.42%
Factset Research Earnings Call Summary
Earnings Call Date: Mar 20, 2025 | % Change Since: -5.07% | Next Earnings Date: Jul 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced view with significant achievements in organic ASV growth, strategic acquisitions, and success in wealth management. However, these positives were tempered by challenges in the banking sector, lower price increases due to CPI, and increased technology costs. FactSet's proactive management of legacy products and strategic focus on high-growth areas suggest a forward-looking strategy despite current market challenges.Highlights
Organic ASV Growth and Client Base Expansion
FactSet grew organic ASV by 4.1% year-over-year and increased its client base to over 8,600, with notable growth in corporates, wealth, and partners.
Strong Performance in Asia-Pacific
The Asia-Pacific region maintained 7% organic ASV growth, driven by strong sales in Data Solutions, particularly among wealth, corporates, hedge funds, and PEVC funds.
Wealth Management Success
FactSet saw double-digit growth in wealth management, highlighted by a strategic win with UBS selecting FactSet to power their advisor desktops and client-facing portal in the Americas.
LiquidityBook Acquisition
The acquisition of LiquidityBook is expected to enhance FactSet's capabilities and is anticipated to be immediately accretive to growth, with cross-sell opportunities already being executed.
Free Cash Flow Increase
Free cash flow increased by 23% year-over-year to $150 million, driven by positive working capital shifts and improved accounts receivable collections.
Lowlights
Lower Price Increase Due to CPI
The annual price increase was lower than the prior year due to a decline in CPI, resulting in a $7 million headwind to ASV growth for the quarter.
Challenges in Banking Sector
FactSet experienced mixed results in the banking sector, with banking acting as a drag on growth due to market uncertainty and cautious client sentiment.
Legacy Product Retirement Impact
FactSet proactively retired a legacy and bespoke solution, resulting in a seven-figure cancellation and impacting ASV retention.
Increased Technology Costs
Technology-related expenses increased by 31% year-over-year due to higher cloud and software expenses, impacting operating margins.
Company Guidance
During FactSet's second fiscal quarter of 2025 earnings call, the company reported a 4.1% year-over-year growth in organic Annual Subscription Value (ASV), reaching over 8,600 clients and more than 219,000 users. The adjusted operating margin was 37.3%, and adjusted diluted EPS was $4.28. ASV retention remained above 95% with client retention at 91%. FactSet reaffirmed its organic ASV growth guidance midpoint of 5%, narrowing the anticipated top-line outcomes range. The company highlighted strong performance in wealth management and private equity, with organic ASV growth of 4% in the Americas, 3% in EMEA, and 7% in Asia-Pacific. FactSet also emphasized its strategic initiatives in generative AI, data solutions, and recent acquisitions, which contributed to its positive outlook for the second half of the fiscal year.Factset Research Corporate Events
Executive/Board ChangesFinancial Disclosures
FactSet Reports Revenue Growth and Board Election
Neutral
Dec 19, 2024
FactSet announced the election of Barak Eilam to its Board of Directors and reported its financial results for the first quarter of fiscal 2025, with a 4.9% increase in GAAP revenues to $568.7 million. Despite a slight decrease in GAAP operating margin due to increased operating expenses, the company reported growth in annual subscription value driven by its diverse portfolio aimed at institutional and corporate clients.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.