FactSet’s Financial Performance: A Mixed Bag of Growth and Caution
FactSet Research Systems Inc. (FDS) plays a crucial role in the financial industry, offering advanced data, analytics, and open technology to over 8,200 clients worldwide. This Connecticut-based firm caters to a diverse clientele, including professionals from both buy-side and sell-side roles, wealth managers, and corporations. FactSet’s platform facilitates informed decision-making and streamlines workflows, reflecting a strong commitment to client service and broad content access.
Current Market Position and Stock Performance
Currently, FactSet’s market capitalization is at $18.6 billion. Over the past year, shares have increased by 6.4%. However, this growth falls short when compared to the broader S&P 500 Index, which has seen a significant 31.8% return during the same period. In 2024, FactSet’s stock is up 2.6%, considerably lagging behind the index’s impressive 25.8% year-to-date return.
Comparisons with Other Financial Entities
FactSet’s performance is notably weaker when placed alongside the iShares U.S. Financials ETF (IYF), which has surged nearly 50% in the last year and boasts a 39.3% year-to-date performance.
Fiscal Highlights and Future Expectations
Despite this mixed performance, FactSet announced stronger-than-expected fiscal 2024 Q4 earnings on September 19, leading to a 5.1% increase in its share price the same day. For the final quarter of fiscal 2024, revenues rose by 4.9% year over year to reach $562.2 million. The adjusted earnings per share (EPS) also saw a healthy jump of 23.8% yearly, reaching $3.74, supported by solid revenue growth, improved margins, and a favorable tax environment.
Looking ahead to the current fiscal year, which ends in August 2025, analysts predict a 4.6% increase in EPS, expected to reach $17.20. Historically, FactSet has a positive earnings surprise track record, consistently exceeding consensus estimates over the past four quarters.
Analyst Sentiment and Ratings
Among the 18 analysts covering FactSet, the consensus rating leans towards a “Hold.” This includes one “Strong Buy,” eleven “Hold,” and six “Strong Sell” recommendations. Analyst sentiment may have shifted slightly to a more cautious outlook compared to three months ago, when five analysts favored a “Strong Sell” stance.
Recent Developments and Price Target Changes
On November 15, BMO Capital increased its price target for FactSet to $521 from $471 while maintaining a “Market Perform” rating. This upgrade reflects a growing appreciation for the company’s technological capabilities, especially noted during FactSet’s Investor Day held on November 14.
Although BMO has slightly adjusted its medium-term growth expectations downwards, it anticipates an acceleration beyond current rates. The firm also believes that FactSet’s margin expansion goals are feasible due to considerable investments being made.
While FactSet currently trades near its average analyst price target of $464.93, the highest price target of $525 indicates potential for a further 7.3% increase from present levels.
On the date of publication, Anushka Mukherjee did not hold any positions in the securities mentioned in this article. This information is solely for informational purposes. For further details, please review the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.
