Last Update20 Sep 25Fair value Decreased 19%
FactSet’s reduced analyst price target—from $428.38 to $346.44—reflects concerns over margin compression from ongoing investments, intensifying AI-driven competition, muted outlook guidance, and lingering uncertainty about growth reacceleration under the new CEO.
Analyst Commentary
- Bearish analysts cite concerns that FactSet's ongoing investment phase will suppress margins into fiscal 2026, with uncertainty over whether these investments will meaningfully reaccelerate growth or are needed just to maintain competitiveness.
- Weak outlook guidance and below-consensus margin forecasts have overshadowed positive Q4 organic annual subscription value results, pressuring share price targets downward.
- Rising competitive pressures, especially from AI-enabled peers, have contributed to a more cautious stance from analysts on FactSet’s growth and margin sustainability.
- The recent share price underperformance and de-rating have increased speculation about FactSet becoming a potential acquisition target, particularly among private equity buyers.
- Some bullish analysts see strategic opportunities under the new CEO, including a sharpened focus on wealth management and efforts to disrupt established players in institutional data, as potential future tailwinds.
What's in the News
- Issued fiscal 2026 guidance: GAAP revenues of $2,423–$2,448 million, diluted EPS of $14.55–$15.25, operating income of $720–$750 million, net income of $550–$577 million.
- Reaffirmed fiscal 2025 guidance: GAAP revenues of $2,305–$2,325 million, diluted EPS of $14.80–$15.40, net income of $567–$588 million, operating income of $744–$761 million.
- Completed share repurchases totaling 1.8% of shares ($300 million) under the September 2024 buyback, while launching a new $400 million buyback program.
- Amended bylaws to update director election procedures, including resignation requirements for directors not receiving majority support and changes for contested elections.
- Expanded product and client offerings with J.P. Morgan and Barclays analyst reports in AMR, exclusive integration of MarketAxess CP+ AI-powered bond pricing, and a partnership with Hebbia to bring FactSet data into its platform.
Valuation Changes
Summary of Valuation Changes for FactSet Research Systems
- The Consensus Analyst Price Target has significantly fallen from $428.38 to $346.44.
- The Future P/E for FactSet Research Systems has significantly fallen from 27.58x to 23.45x.
- The Consensus Revenue Growth forecasts for FactSet Research Systems has fallen from 5.7% per annum to 5.4% per annum.
Key Takeaways
- Integration of acquisitions and new GenAI products is expanding service offerings and supporting revenue and ASV growth.
- Enhanced data solutions and operational productivity improvements are poised to sustain margins and bolster future revenue.
- Rising technology costs and asset management challenges may pressure FactSet's margins and hinder growth, with uncertain market conditions affecting revenue consistency.
Catalysts
About FactSet Research Systems- Operates as a financial digital platform and enterprise solutions provider for the investment community worldwide.
- FactSet is integrating new acquisitions like Irwin and LiquidityBook, adding immediate cross-sell opportunities and expanding services across buy-side and banking workflows, which will support revenue growth.
- The launch of new GenAI products, including Pitch Creator and conversational API, is expected to provide additional services that drive adoption and increase ASV growth, positively impacting future revenue.
- The company is implementing strategic initiatives in its wealth management segment, securing partnerships like the UBS deal, and this broad market share in the wealth sector should contribute to sustained ASV growth.
- FactSet is increasing its focus on data feeds, benefiting from strong demand for high-quality data solutions, which should bolster future revenue and margin expansion through increased enterprise-level sales.
- Focus on operational productivity, such as reducing third-party content costs and enhancing workforce efficiency through automation, underpins the company's confidence in maintaining its operating margins despite recent acquisitions.
FactSet Research Systems Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming FactSet Research Systems's revenue will grow by 5.7% annually over the next 3 years.
- Analysts assume that profit margins will increase from 23.3% today to 27.0% in 3 years time.
- Analysts expect earnings to reach $730.7 million (and earnings per share of $20.08) by about September 2028, up from $532.9 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.6x on those 2028 earnings, up from 26.5x today. This future PE is greater than the current PE for the US Capital Markets industry at 26.7x.
- Analysts expect the number of shares outstanding to decline by 0.48% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.33%, as per the Simply Wall St company report.
FactSet Research Systems Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The slowing price increases tied to lower CPI levels could negatively impact FactSet's revenue growth, as demonstrated by a nearly $7 million headwind to ASV growth this quarter.
- Persistent challenges in the asset management and banking sectors, including ongoing cost rationalization and budget tightening, pose risks to revenue and retention which could unfavorably affect net margins.
- The market environment remains uncertain, particularly for banking, which has been a drag on growth; this uncertainty may continue to suppress revenue growth despite potential wins with new products.
- Increased technology expenses, noted as 31% higher mainly due to greater cloud and software costs, could pressure operating margins and require significant cost efficiencies elsewhere to offset.
- The execution risks tied to international expansion, given mixed results in regions like EMEA, could lead to inconsistent revenue performance and impact overall growth expectations.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $428.375 for FactSet Research Systems based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $500.0, and the most bearish reporting a price target of just $355.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.7 billion, earnings will come to $730.7 million, and it would be trading on a PE ratio of 27.6x, assuming you use a discount rate of 8.3%.
- Given the current share price of $372.86, the analyst price target of $428.38 is 13.0% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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