FDS Stock Study (11-17-25)
Posted by Mark on April 4, 2025 at 06:48 | Last modified: November 16, 2025 09:13I recently did a stock study on FactSet Research Systems Inc. (FDS, $273.91). Previous studies are here and here.
M* writes:
> FactSet provides financial data and portfolio analytics to the
> global investment community. The company aggregates data from
> third-party data suppliers, news sources, exchanges, brokerages,
> and contributors into its workstations. In addition, it
> provides essential portfolio analytics that companies use to
> monitor portfolios and address reporting requirements. Buy-side
> clients (including wealth and corporate clients) account for
> over 80% of FactSet’s annual subscription value. In 2015, the
> company acquired Portware, a provider of trade execution
> software. In 2017, it acquired BISAM, a risk management and
> performance measurement provider. In 2022, it completed
> its purchase of CUSIP Global Services.
Over the past decade, this medium-size company has grown sales and earnings at annualized rates of 8.6% and 9.1%, respectively (FY ends 8/31). Lines are mostly up, straight, and parallel except for EPS declines in ’17 and ’22. 10-year EPS R^2 is 0.87 and Value Line (VL) gives an impressive Earnings Predictability score of 100.
Over the past decade, PTPM trails peer and industry averages while falling from 40.9% (’16) to 31.1% (’25) with a last-5-year mean of 28.4%. ROE leads peer averages but trails the industry while falling from 60.3% (’16) to 27.3% (’25) with a last-5-year mean of 30.2%. Debt-to-Capital is less than peer and industry averages despite increasing from from 36.7% (’16) to 41.6% (’25) with a last-5-year mean of 49.7%.
Quick Ratio is 1.2 and Interest Coverage is 13.8 per M* who assigns “Narrow” Economic Moat, “Standard” rating for Capital Allocation, and gives an A grade for Financial Health (per BI website). VL gives an B++ grade for Financial Strength.
With regard to sales growth:
- YF projects YOY 5.2% and 5.4% for ’26 and ’27, respectively (based on 16 analysts).
- Zacks projects YOY 5.0% and 5.3% for ’26 and ’27, respectively (7 analysts).
- VL projects 5.7% annualized growth from ’25-’29.
- CFRA projects 5.2% YOY and 4.8% per year for ’26 and ’25-’27, respectively.
- M* offers a 2-year ACE of 5.6%/year and its own 5-year annualized estimate of 5.0% (analyst note).
My 4.0% per year forecast is below the range.
With regard to EPS growth:
- MarketWatch projects 4.7% and 6.1% per year for ’25-’27 and ’25-’28, respectively (based on 23 analysts).
- Nasdaq.com projects 8.9% and 8.8% per year for ’26-’28 and ’26-’29 [6 / 5 / 1 analyst(s) for ’26 / ’28 / ’29].
- Seeking Alpha projects 4-year annualized growth of 5.7%.
- Finviz gives 5-year ACE of 6.1% (10).
- LSEG estimates LTG at 5.3%.
- YF projects YOY 2.0% and 8.3% for ’26 and ’27, respectively (18).
- Zacks projects YOY 1.9% and 11.3% for ’26 and ’27, respectively (6), along with 5-year annualized growth of 5.7%.
- VL projects 7.4% annualized growth from ’25-’29.
- CFRA projects 3.5% YOY and 5.0% per year for ’26 and ’25-’27, respectively, along with a 3-year CAGR of 6.0%.
- M* projects long-term growth of 10.1% per year.
My 5.0% per year forecast is below the long-term-estimate range (mean of six: 6.7%). Initial value is ’25 EPS of $15.55/share.
My Forecast High P/E is 28.0. Over the past 10 years, high P/E increases from 21.9 (’16) to 32.1 (’25) with a last-5-year mean of 38.4 and a last-5-year-mean average P/E of 33.7. I am near bottom of the range (only ’16 is less).
My Forecast Low P/E is 16.0. Over the past 10 years, low P/E increases from 16.6 (’16) to 23.5 (’25) with a last-5-year mean of 29.0. I am forecasting below the range.
My Low Stock Price Forecast (LSPF) is $190.00. Default ($248.80) based on initial value from above is only 9.2% (0.7%) less than the previous close (52-week low). My [arbitrary] projection is 30.6% and 24.2% less, respectively.
Payout Ratio (PR) over the last 10 years ranges from 23.0% in ’16 to 35.4% in ’18 with a last-5-year mean of 30.3%. I am forecasting at bottom of the range (23.0%).
These inputs land FDS in the BUY zone with a U/D ratio of 3.4. Total Annualized Return (TAR) is 16.0%.
PAR (using Forecast Average–not High–P/E) of 10.8% is less than I seek in a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.
To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 142 studies (my study and 56 other outliers excluded) over the past 90 days, averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.5%, 7.4%, 30.0, 19.1, and 30.3%, respectively. I am lower across the board. VL’s projected average annual P/E of 25.0 is greater than MS (24.6) and greater than mine (22.0).
MS high / low EPS are $21.81/ $14.97 versus my $19.85 / $15.55 (per share). My high EPS is less due to a lower growth rate. VL’s $22.60 is greater than both.
MS LSPF of $233.30 implies Forecast Low P/E of 15.6: less than the above-stated 19.1. MS LSPF is 18.4% less than the default $14.97/share * 19.1 = $285.93 resulting in more conservative zoning. MS LSPF is still 22.6% greater than mine, however.
MOS is robust because my inputs are near or below respective analyst/historical ranges and MS averages. MS TAR 3.3%/year greater than mine and a much higher LSPF also support the MOS.
With regard to valuation, PEG is 2.8 and 3.4 per Zacks and my projected P/E, respectively: both overvalued (1.8 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is extremely cheap at 0.52 and the “quick and dirty DCF” has stock undervalued by 32%. CFRA calculates undervalued by 25% (but maintains a HOLD rating).
Per U/D, FDS is a BUY under $281/share. BI TAR criterion is met [555.8 / ((14.07 / 100 ) +1 ) ^ 5] ~ $288 with a forecast high price ~$556.
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