FactSet Research Systems FDS stock has had an impressive run over the past 90 days. Shares have gained 19.2% compared with the 4% growth of the industry it belongs to and the 6.1% rise of the Zacks S&P 500 composite.
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The company’s earnings for fiscal 2025 are expected to increase 4.6% on a year-over-year basis. Revenues for fiscal 2025 are expected to increase 4.4% year over year.
Factors That Auger Well For FDS
FactSet's IntelligentPlatform integrates conversational AI to boost productivity and streamline workflows for financial clients. Key features include FactSetMercury, a smart search engine for quick insights, and EnterpriseAIBuildingBlocks that allow clients to integrate FactSet’s AI into their systems. AI-powered tools like PitchCreatorforBankers and PortfolioCommentary automate tasks, such as pitch book creation and performance analysis, saving time for analysts. Additionally, the platform includes enhanced search capabilities for Corporations, helping teams understand market positioning. This initiative promises to enhance client efficiency and decision-making.
FactSet’s commitment toward sustainability, as validated by the Science Based Targets initiative, demonstrates a robust strategic approach to reducing greenhouse gas emissions and addressing the global climate crisis. By committing to reduce scope 1 and 2 emissions by 45% and scope 3 emissions by 25% by its 2030 fiscal year, FactSet sets clear, science-backed targets that align with global climate action efforts. Moreover, the company’s alignment with global initiatives like the United Nations Global Compact and Principles for Responsible Investment, along with an executive-sponsored Sustainability Committee, underscores its dedication to achieving a net-zero future.
FactSet’s acquisition of Irwin, a modern investor relations platform, strengthens its offerings for corporate clients by integrating Irwin’s IR CRM with FactSet’s market data and analytics. This unified solution will help investor relations teams streamline workflows, improve engagement, and enhance transparency with investors. The acquisition aligns with FactSet’s strategy to provide comprehensive solutions across the financial services industry. The deal is expected to close in the first quarter of fiscal 2025 and is not anticipated to significantly impact FactSet’s fiscal 2025 results.
FDS’s commitment toward rewarding its shareholders through dividends and share repurchases is commendable. In fiscal 2024, 2023 and 2022, the company repurchased shares worth $235 million, $177 million and $19 million, respectively. It paid out $151 million, $139 million and $126 million in dividends in 2024, 2023 and 2022, respectively.
FDS: Key Risk to Watch
Increased operating expenses are hurting FDS’ prospects. In the fourth quarter of fiscal 2024, the total operating expenses rose 3.5% year over year. This rise in the total operating expenses was primarily driven by a 31.5% year-over-year increase in Selling general and administrative expenses.
Moreover, the decreasing trend in FactSet’s current ratio (a measure of liquidity) too does not bode well for the company. FDS exited the fourth quarter of fiscal 2024 with a current ratio of 1.25, which was lower than the preceding quarter’s 1.28 and the year-ago quarter’s 1.59.
FDS’ Zacks Rank
FDS currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the broader Zacks Business Services sector are Charles River Associates CRAI and Parsons PSN.
Charles River Associates currently carries a Zacks Rank of 2 (Buy). It has a long-term earnings growth expectation of 16%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CRAI delivered a trailing four-quarter earnings surprise of 31%, on average.
Parsons presently sports a Zacks Rank of 1.
PSN has a long-term earnings growth expectation of 18.6%. It delivered a trailing four-quarter earnings surprise of 17.5%, on average.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>Charles River Associates (CRAI) : Free Stock Analysis Report
FactSet Research Systems Inc. (FDS) : Free Stock Analysis Report
Parsons Corporation (PSN) : Free Stock Analysis Report
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