FactSet Research Systems Inc. FDS shares have had an impressive run on the bourses over the past six months. The stock has gained 16.6% against the 7.6% decline of the industry it belongs to and the 3.6% fall of the Zacks S&P 500 composite.
FactSet Research Systems Inc. Price
FactSet Research Systems Inc. price | FactSet Research Systems Inc. Quote
The company has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
FactSet’s fiscal 2023 and 2024 earnings are expected to improve 10% and 10.8%, respectively, year over year. Revenues are anticipated to rise 14.1% and 7.2% in fiscal 2023 and 2024, 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 219 clients in the fourth quarter of fiscal 2022, taking the total to 7,538. The annual client retention rate was 92%. FactSet’s Annual Subscription Value plus professional services were up 17.6% year over year in the quarter.
FactSet had a cash and cash equivalent balance of $536 million at the end of fourth-quarter fiscal 2022 with no short-term debt to clear off. A strong cash position allows FactSet to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payments. FDS paid dividends of $125.9 million, $117.9 million and $110.4 million in fiscal 2022, 2021 and 2020, respectively.
The March 2022 acquisition of CUSIP Global Services from S&P Global is expected to significantly boost FactSet’s open data strategy and expand its position in the global capital markets.
FactSet’s fourth-quarter fiscal 2022 current ratio (a measure of liquidity) stood at 1.99, lower than the current ratio of 2.12 reported at the end of third-quarter fiscal 2022 and the prior-year quarter’s 2.96. A decline in the current ratio is not desirable as it indicates that the company may face problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
FactSet currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Booz Allen Hamilton Holding BAH, Paychex PAYX and Cross Country Healthcare CCRN.
Booz Allen carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 8.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Booz Allen delivered a trailing four-quarter earnings surprise of 8.8% on average.
Paychex presently carries a Zacks Rank #2. PAYX has a long-term earnings growth expectation of 7.5%.
Paychex delivered a trailing four-quarter earnings surprise of 8.6% on average.
Cross Country Healthcare currently carries a Zacks Rank #2. CCRN has a long-term earnings growth expectation of 6%.
CCRN delivered a trailing four-quarter earnings surprise of 10.1% on average.
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