FactSet (FDS): Revisiting Valuation After Recent Share Price Rebound and Ongoing Earnings Growth

Why FactSet Is Back on Investors Radar

FactSet Research Systems (FDS) has quietly outperformed over the past month, even as its longer term returns remain under pressure. That mix of short term momentum and deeper drawdown is exactly what makes the stock interesting now.

See our latest analysis for FactSet Research Systems.

That recent 1 month share price return of 6.78 percent comes after a much tougher stretch, with the year to date share price return down 38.62 percent and the 1 year total shareholder return lower by 39.46 percent. Current buyers are therefore really betting that sentiment and growth expectations are starting to turn.

If FactSet has you rethinking where the next leg of growth might come from, it is worth scanning fast growing stocks with high insider ownership for other under the radar opportunities.

With earnings still growing and the share price far below recent highs, FactSet now trades at a noticeable discount to analyst targets. The key question is whether this represents a genuine mispricing or simply markets correctly discounting slower future growth.

Most Popular Narrative Narrative: 12.9% Undervalued

With FactSet last closing at $292.47 versus a narrative fair value of $335.94, the story assumes meaningful upside if execution stays on track.

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.

Read the complete narrative.

Want to see how modest revenue growth, firmer margins and a richer future earnings multiple all combine to justify that upside path? The full narrative breaks down every assumption and the time frame behind this fair value jump, including how long FactSet is expected to compound profits before the market fully catches on.

Result: Fair Value of $335.94 (UNDERVALUED)

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

However, softer asset management budgets and rising technology spend could delay margin expansion and force investors to reassess how much future upside they are willing to price in.

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

Build Your Own FactSet Research Systems Narrative

If you would rather stress test these assumptions on your own and reach an independent view, you can build a fresh narrative in under three minutes: Do it your way.

A great starting point for your FactSet Research Systems research is our analysis highlighting 4 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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