Factset Research (FDS) AI Stock Analysis

• Market Cap: $14.37B
• Dividend Yield: 1.11%
• Average Volume (3M): 404.41K
• Price to Earnings (P/E): 27.6
• Beta (1Y): 0.58
• Revenue Growth: 5.07%
• EPS Growth: 4.19%
• Country: US
• Employees: 12,598
• Sector: Financial
• Sector Strength: 71
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 4.27
• Shares Outstanding: 37,806,774
• 10 Day Avg. Volume: 480,200
• 30 Day Avg. Volume: 404,412
• PEG Ratio: 1.99
• Price to Book (P/B): 8.41
• Price to Sales (P/S): 7.30
• P/FCF Ratio: 26.18
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 8.23
• Enterprise Value/Gross Profit: 15.43
• Enterprise Value/Ebitda: 21.20
• 1Y Price Target: $421.67
• Price Target Upside: 10.97% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 12

• Rating: 70 Outperform
• Price Target: $408.00 ▲(7.37% Upside)

Factset Research's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust growth and client retention. However, bearish technical indicators and a high valuation limit the upside potential. The strategic CEO transition is a positive development but does not significantly alter the current outlook.

Positive Factors

Acquisition Potential

FactSet enjoys several attractive characteristics that make it a logical acquisition target, including a recurring revenue business model, a strong long-term track record, and very modest financial leverage.

Financial Performance

FactSet reported F3Q ASV above consensus and reiterated its 2H-weighted guidance, citing strong visibility into its robust and diverse pipeline.

Innovation

FactSet Research remains on track to achieve growth attribution from new generative AI products, indicating innovation and potential future growth.

Negative Factors

Competitive Pressure

Recent commentary from a competitor implied FactSet is competing more heavily on price, raising concerns about growing competitive pressure from AI.

Earnings and Margins

Guidance implies a decline in margins in F4Q, as FactSet ramps up its tech-related expenses.

Market Challenges

Budget pressures facing much of FactSet’s end market and improved competition from Refinitiv are likely limiting revenue and ASV growth upside.

Factset Research Business Overview & Revenue Model

Company Description

FactSet Research Systems Inc. (FDS) is a global provider of integrated financial information and analytical applications for investment professionals. Founded in 1978, the company serves a diverse client base, including investment managers, investment banks, and corporations, primarily in the financial services sector. FactSet's core products include a comprehensive suite of financial data, analytics, and software solutions that enhance investment decision-making, risk management, and performance evaluation. Its offerings encompass data feeds, portfolio management systems, research management solutions, and a robust analytics platform that provides insights into market trends and company performance.

How the Company Makes Money

FactSet generates revenue primarily through subscriptions to its financial data and analytics services. The company employs a recurring revenue model, where clients pay for access to its platforms and data feeds, often on a multi-year contract basis. Key revenue streams include subscription fees from its core products, as well as fees for additional services such as customized data solutions and consulting. FactSet also benefits from partnerships with other financial institutions and technology providers, enhancing its product offerings and market reach. The company continuously invests in technology development and data acquisition to improve its services, thereby driving customer retention and growth in its client base.

Factset Research Financial Statement Overview

Summary

FactSet exhibits solid financial health with consistent revenue growth, robust profitability, and stable leverage. Strong cash generation capabilities are noted, though rising debt levels and slight pressures on cash flow growth require attention.

Income Statement

Factset Research has shown consistent revenue growth with a 3.81% increase in revenue from 2024 to TTM, alongside maintaining strong gross and net profit margins of 53.34% and 23.31%, respectively, in TTM. The EBIT and EBITDA margins remain robust at 30.56% and 28.98%, indicating operational efficiency. However, the slight decline in EBIT from 2024 and the decrease in EBITDA suggest emerging cost pressures.

Balance Sheet

The company's debt-to-equity ratio stands at 0.75 in TTM, indicating a moderate level of leverage. Return on equity is high at 24.73%, reflecting strong profitability. The equity ratio is healthy at 49.67%, showcasing a stable financial position. However, the increase in total debt compared to equity from previous years indicates a rising leverage trend.

Cash Flow

Operating cash flow is strong with a cash flow to net income ratio of 1.27, and free cash flow remains positive with a slight decline in growth. The free cash flow to net income ratio is 1.08, signaling efficient cash generation relative to net income. Nevertheless, the decrease in free cash flow compared to 2024 suggests a need for careful monitoring of cash reserves.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.29B	2.20B	2.09B	1.84B	1.59B	1.49B
Gross Profit	1.22B	1.19B	1.11B	972.79M	805.04M	798.66M
EBITDA	887.82M	872.88M	788.00M	610.36M	581.08M	540.38M
Net Income	532.92M	537.13M	468.17M	396.92M	399.59M	372.94M
Balance Sheet
Total Assets	4.34B	4.06B	3.96B	4.01B	2.22B	2.08B
Cash, Cash Equivalents and Short-Term Investments	364.05M	492.60M	457.65M	536.49M	717.85M	605.18M
Total Debt	1.62B	1.57B	1.84B	2.22B	866.25M	875.68M
Total Liabilities	2.18B	2.14B	2.34B	2.68B	1.21B	1.19B
Stockholders Equity	2.16B	1.91B	1.62B	1.33B	1.02B	898.17M
Cash Flow
Free Cash Flow	576.52M	614.66M	584.79M	487.12M	493.90M	428.20M
Operating Cash Flow	677.32M	700.34M	645.57M	538.28M	555.23M	505.84M
Investing Cash Flow	-409.03M	-144.32M	-95.39M	-2.03B	-135.99M	-73.63M
Financing Cash Flow	-357.27M	-560.85M	-632.02M	1.34B	-322.71M	-218.07M

Factset Research Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 380.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 380 is below the 20-day moving average (MA) of 383.56, below the 50-day MA of 413.86, and below the 200-day MA of 445.10, indicating a bearish trend. The MACD of -10.32 indicates Negative momentum. The RSI at 40.26 is Neutral, neither overbought nor oversold. The STOCH value of 71.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FDS.

Factset Research Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCO	79 Outperform	$91.74B	43.34	55.18%	0.72%	11.47%	16.14%
SPGI	76 Outperform	$168.43B	42.79	11.76%	0.69%	10.72%	23.30%
MSCI	73 Outperform	$44.21B	38.01	-117.99%	1.23%	10.48%	0.98%
FDS	70 Outperform	$14.37B	27.62	26.35%	1.11%	5.07%	4.19%
Sector *	68 Neutral	$17.69B	11.82	10.30%	3.73%	9.66%	0.42%
MORN	66 Neutral	$10.98B	27.80	26.51%	0.68%	8.23%	64.35%
DNB	63 Neutral	$4.08B	―	-1.16%	2.19%	1.97%	-14.06%

Factset Research Corporate Events

FactSet Announces CEO Transition with New Appointment

On June 3, 2025, FactSet announced the retirement of its CEO, F. Philip Snow, effective upon the appointment of his successor, Sanoke Viswanathan, who will start on September 1, 2025. Snow will remain as a special advisor to ensure a smooth transition. Viswanathan, a seasoned leader from JPMorgan Chase, is expected to drive FactSet’s growth with his expertise in strategy, innovation, and operations, particularly in banking and wealth management. His appointment is seen as a strategic move to strengthen FactSet’s position in the financial services industry and continue its momentum in data-driven finance.