FactSet (FDS): Exploring Valuation After 2026 Guidance and Margin Pressures Reveal Cautious Profit Outlook

FactSet Research Systems (FDS) is under the spotlight after issuing fiscal 2026 guidance that fell short of expectations, even as recent quarterly revenues came in above estimates. Clear margin pressures from increased AI investments and larger bonus payouts are shaping a cautious outlook.

See our latest analysis for FactSet Research Systems.

FactSet’s share price has taken a sizable hit this year, dropping more than 43% year-to-date, as the market digests cautious 2026 guidance and margin pressures from ramped-up AI investment and bonus payouts. Despite its storied track record, such as 26 straight years of dividend hikes, recent executive stock sales and mixed institutional flows are keeping sentiment in check, and momentum has clearly faded against a tough landscape.

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With shares down sharply, but long-term strengths in place and a significant discount to analyst price targets, the real question emerges: Is FactSet now undervalued, or is the market already pricing in all future challenges and growth potential?

Most Popular Narrative: 20.4% Undervalued

FactSet’s widely followed narrative suggests its fair value is well above the last close of $269.04, driven by expectations for steadier growth and robust profitability as recent investments begin to deliver returns.

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. This broad market share in the wealth sector should contribute to sustained ASV growth.

Read the complete narrative.

Curious how new product launches shape this surprising valuation gap? The real twist lies in the narrative’s bold assumptions around revenue growth and margin expansion. See what expectations lie beneath the surface and why analysts are betting on FactSet’s transformation journey.

Result: Fair Value of $338.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressures and intensified competition from new AI entrants could quickly test analysts’ confidence in FactSet’s recovery narrative.

Find out about the key risks to this FactSet Research Systems narrative.

Build Your Own FactSet Research Systems Narrative

If you want to take the story in your own direction or dig deeper into the numbers, you can easily build a custom view in just a few minutes. Do it your way.

A great starting point for your FactSet Research Systems research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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