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.
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Moderate |
| What you get: | |
| Growth | Moderate |
| Profitability | Very Strong |
| Financial Stability | Strong |
| Downturn Resilience | Moderate |
| Operating Performance | Strong |
| Stock Opinion | Attractive |
But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure
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
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| FDS | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 4.8 | 3.3 |
| Price-to-Earnings Ratio | 20.5 | 23.7 |
| Price-to-Free Cash Flow Ratio | 19.0 | 21.2 |
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.
| FDS | S&P 500 | |
|---|---|---|
| 3-Year Average | 9.3% | 5.3% |
| Latest Twelve Months* | 5.1% | 5.1% |
| Most Recent Quarter (YoY)* | 5.9% | 6.1% |
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%
| FDS | S&P 500 | |
|---|---|---|
| Current Operating Margin | 30.8% | 18.6% |
| Current OCF Margin | 29.6% | 20.3% |
| Current Net Income Margin | 23.3% | 12.7% |
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%
| FDS | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 14.8% | 21.1% |
| Current Cash-to-Assets Ratio | 8.4% | 7.0% |
[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
| FDS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -28.7% | -25.4% |
| Time to Full Recovery | 881 days | 464 days |
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
| FDS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -33.7% | -33.9% |
| Time to Full Recovery | 72 days | 148 days |
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
| FDS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -54.9% | -56.8% |
| Time to Full Recovery | 361 days | 1480 days |
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