On Thursday, BMO Capital maintained its Market Perform rating on shares of FactSet Research Systems (NYSE:FDS) with a consistent price target of $440.00. The firm's commentary highlighted FactSet's recent earnings report, which revealed an adjusted earnings per share (EPS) that exceeded expectations, driven by strong margins.
Year-over-year, the company's organic revenue saw a stable sequential performance and approximately a 5% increase. However, there was a slight deceleration in the growth of organic Annual Subscription Value (ASV).
The company also provided its first outlook for fiscal year 2025, which aligns with consensus estimates at the higher end. In related news, FactSet announced an upcoming investor day scheduled to take place in New York City on November 14, 2024. However, FactSet has indicated that it does not plan to update its forward-looking statements before the release of its first-quarter earnings for fiscal year 2025.
Shares of FactSet Research Systems reacted positively in pre-market trading following the announcement. The company's performance and the announcement of the investor day appear to have been received well by the market, as indicated by the stock's pre-open movement.
Investors and analysts will be looking forward to the investor day in November for further insights into the company's strategy and performance. In the meantime, FactSet does not intend to provide any updates on its projections until the F1Q25 earnings are published.
In other recent news, FactSet Research Systems reported strong fourth-quarter results, exceeding analyst expectations. The company's adjusted earnings per share were $3.74, surpassing the consensus forecast of $3.62, while revenue increased by 4.9% year over year to $562.2 million, also beating expectations of $546.76 million. FactSet's adjusted operating margin expanded to 35.8%, up from 33.4% a year earlier, due to lower compensation costs.
However, Wolfe Research has maintained its underperform rating on FactSet shares, based on management's commentary about the trajectory of revenue growth and factors contributing to the year-over-year margin squeeze. Wolfe Research also noted an increase in FactSet's client and user numbers compared to the fourth fiscal quarter of 2023, indicating a potentially improving demand environment for the company's offerings.
FactSet's fiscal 2025 earnings guidance of $16.80-$17.40 per share fell short of Wall Street's projection of $17.36, but its full-year revenue estimate of $2.29-$2.31 billion aligns with the consensus estimate of $2.30 billion. These recent developments highlight the company's performance and market expectations.
InvestingPro Insights
For investors seeking a deeper dive into FactSet Research Systems' financial health, InvestingPro provides a real-time snapshot. The company boasts a robust Market Cap of $17.0 billion and a P/E Ratio of 33.36, indicating a premium valuation in the market. With a PEG Ratio of 17.74, investors are paying a significant premium for growth relative to earnings. Despite this, FactSet's commitment to shareholder returns is evident, as it has raised its dividend for an impressive 26 consecutive years, and the dividend yield currently stands at 0.93%.
FactSet's revenue growth remains steady, with a 6.23% increase over the last twelve months as of Q3 2024. This aligns with the company's recent earnings report, which reflected a solid financial performance. Moreover, FactSet's Gross Profit Margin is a strong 53.26%, underlining the company's ability to maintain profitability amidst its growth endeavors. With analysts predicting that the company will remain profitable this year, supported by the fact that it has been profitable over the last twelve months, the financial outlook for FactSet is positive.
InvestingPro Tips suggest that while FactSet is trading at a high earnings multiple and P/E ratio relative to near-term earnings growth, the company's historical performance has demonstrated a high return over the last decade. This may be of interest to long-term investors considering the company's track record. For more detailed analysis and additional tips, investors are encouraged to visit https://www.investing.com/pro/FDS, where 7 more InvestingPro Tips are available for FactSet Research Systems.
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