FactSet Research Systems Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Last week, you might have seen that FactSet Research Systems Inc. (NYSE:FDS) released its second-quarter result to the market. The early response was not positive, with shares down 6.0% to US$447 in the past week. The result was positive overall – although revenues of US$546m were in line with what the analysts predicted, FactSet Research Systems surprised by delivering a statutory profit of US$3.65 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for FactSet Research Systems
Taking into account the latest results, the most recent consensus for FactSet Research Systems from 17 analysts is for revenues of US$2.20b in 2024. If met, it would imply an okay 2.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 12% to US$14.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.21b and earnings per share (EPS) of US$14.40 in 2024. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$453. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on FactSet Research Systems, with the most bullish analyst valuing it at US$500 and the most bearish at US$372 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that FactSet Research Systems’ revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2024 being well below the historical 9.6% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than FactSet Research Systems.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$453, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple FactSet Research Systems analysts – going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we’ve spotted with FactSet Research Systems .
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