FDS Falls 16% In A Single Week, Time To Buy The Stock?

We believe there are only a couple of things to fear in FDS stock given its overall Strong operating performance and financial condition. Considering stock’s Moderate valuation, we think it is Attractive. Here is our multi-factor assessment.

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Let’s get into details of each of the assessed factors but before that, for quick background: With $11 Bil in market cap, FactSet Research Systems provides integrated financial data and analytical applications delivering insights and workflow solutions for research, trading, content, and wealth management to investment professionals.

[1] Valuation Looks Moderate

This table highlights how FDS is valued vs broader market. For more details see: FDS Valuation Ratios

[2] Growth Is Moderate

• FactSet Research Systems has seen its top line grow at an average rate of 9.3% over the last 3 years
• Its revenues have grown 5.1% from $2.2 Bil to $2.3 Bil in the last 12 months
• Also, its quarterly revenues grew 5.9% to $586 Mil in the most recent quarter from $553 Mil a year ago.

This table highlights how FDS is growing vs broader market. For more details see: FDS Revenue Comparison

[3] Profitability Appears Very Strong

• FDS last 12 month operating income was $704 Mil representing operating margin of 30.8%
• With cash flow margin of 29.6%, it generated nearly $677 Mil in operating cash flow over this period
• For the same period, FDS generated nearly $533 Mil in net income, suggesting net margin of about 23.3%

This table highlights how FDS profitability vs broader market. For more details see: FDS Operating Income Comparison

[4] Financial Stability Looks Strong

• FDS Debt was $1.6 Bil at the end of the most recent quarter, while its current Market Cap is $11 Bil. This implies Debt-to-Equity Ratio of 14.8%
• FDS Cash (including cash equivalents) makes up $364 Mil of $4.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 8.4%

[4] Downturn Resilience Is Moderate

FDS saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• FDS stock fell 28.7% from a high of $488.85 on 29 December 2021 to $348.71 on 16 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 13 November 2024
• Since then, the stock increased to a high of $495.72 on 14 November 2024 , and currently trades at $288.41

 
2020 Covid Pandemic

• FDS stock fell 33.7% from a high of $308.66 on 19 February 2020 to $204.55 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 3 June 2020

 
2008 Global Financial Crisis

• FDS stock fell 54.9% from a high of $73.53 on 10 October 2007 to $33.18 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 November 2009

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