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Reasons to Hold FactSet (FDS) Stock in Your Portfolio Now

FactSet Research Systems Inc. FDS has had an impressive run over the past year, gaining 13%.

The company’s fiscal 2024 and 2025 earnings are expected to improve 8.7% and 9.8%, respectively, year over year. Revenues are anticipated to rise 5% and 5.7% in fiscal 2024 and 2025, respectively.

Factors That Augur Well

FactSet has been engaged for more than 40 years in delivering extensive data, sophisticated analytics and flexible technology to global financial professionals and is currently benefiting from a growing customer base and strong global presence. The company added 75 clients in the second quarter of fiscal 2024, driven by an increase in corporate and wealth clients, taking the total client count to 8,000. Annual Subscription Value plus professional services were up 5.4% year over year.

FactSet Research Systems Inc. Revenue (TTM)

FactSet Research Systems Inc. Revenue (TTM)
FactSet Research Systems Inc. Revenue (TTM)

FactSet Research Systems Inc. revenue-ttm | FactSet Research Systems Inc. Quote

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The 2023 acquisition of idaciti supports FactSet’s ongoing initiative to digitally revamp its content collection infrastructure while also expediting the availability of essential data sets that underpin advanced future workflows. The 2022 acquisition of CUSIP Global Services has strengthened the company’s position in the global capital markets.

FactSet has a consistent track record of rewarding its shareholders through share repurchases and dividends. During fiscal 2023, 2022 and 2021, the company repurchased shares worth $18.64 million, 199.6 million and $264.7 million, respectively. FactSet paid dividends of $125.9 million, 110.4 million and $117.9 million during fiscal 2023, 2022 and 2021, respectively. Such moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business. They not only instill investors’ confidence but also positively impact earnings and share prices.

Some Risks

The company has larger and stronger competitors, who therefore have the wherewithal to expand their offerings and data content more effectively, price their products more aggressively or respond more rapidly to situations developing in the marketplace to attract new clients and retain the existing ones. Despite enjoying a technological advantage, pricing pressure continues to act as a major headwind for FactSet, resulting in a reduction in revenues and loss of market share.

Zacks Rank and Stocks to Consider

FactSet currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the broader Business Service sector that investors may consider:

Conduent CNDT: The company is a global provider of digital business solutions and services to commercial, government and transportation clients. It is currently focused on rationalizing its portfolio to increase revenue generation opportunities. The approach should help CNDT free up capital for the purpose of reducing debt, buying back shares and pursuing other opportunities that promise growth.

The Zacks Consensus Estimate for CNDT’s 2024 earnings has been revised 56.6% northward in the past 60 days to $1.66. CNDT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barrett Business Services BBSI: The company offers business management solutions tailored for small and mid-sized enterprises across the United States.

With a growing client base, it is experiencing an expansion in gross billings. The company remains buoyed by successful marketing efforts, the introduction of new products and the implementation of BBSI Benefits. With these factors driving momentum, the outlook for 2024 is optimistic, positioning the company for a robust performance.

The Zacks Consensus Estimate for the company’s 2024 earnings has been revised 2.2% northward in the past 60 days to $7.95. BBSI also currently carries a Zacks Rank #2.

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FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report

Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report

Conduent Inc. (CNDT) : Free Stock Analysis Report

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Zacks Investment Research