FactSet Research Systems Inc (FDS, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $457.10, FactSet Research Systems Inc has witnessed a daily gain of 0.54%, marked against a three-month change of -4.61%. A thorough analysis, underlined by the GF Score, suggests that FactSet Research Systems Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 9/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high GF Score of 98 out of 100, FactSet Research Systems Inc signals the highest outperformance potential.
Company Overview
FactSet Research Systems Inc provides financial data and portfolio analytics to the global investment community. The company aggregates data from third-party data suppliers, news sources, exchanges, brokerages, and contributors into its workstations. In addition, it provides essential portfolio analytics that companies use to monitor portfolios and address reporting requirements. Buy-side clients, including wealth and corporate clients, account for 82% of FactSet's annual subscription value. In 2015, the company acquired Portware, a provider of trade execution software. In 2017, it acquired BISAM, a risk management and performance measurement provider. In 2022, it completed its purchase of CUSIP Global Services.
Financial Strength Analysis
According to the Financial Strength rating, FactSet Research Systems Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for FactSet Research Systems Inc stands impressively at 11.7, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 5.9, FactSet Research Systems Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.74, FactSet Research Systems Inc's strategic handling of debt solidifies its financial health.
Profitability Insights
The Profitability Rank shows FactSet Research Systems Inc's impressive standing among its peers in generating profit. FactSet Research Systems Inc's Operating Margin has increased by 4.96% over the past five years, as shown by the following data: 2020: 30.53; 2021: 29.79; 2022: 29.27; 2023: 31.42; 2024: 32.05.
Furthermore, FactSet Research Systems Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2020: 53.45; 2021: 50.59; 2022: 52.76; 2023: 53.33; 2024: 54.07. This trend underscores the company's growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms FactSet Research Systems Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding, and operating efficiency.
FactSet Research Systems Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Prospects
Ranked highly in Growth, FactSet Research Systems Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 11.4%, which outperforms better than 62.18% of 698 companies in the Capital Markets industry.
Moreover, FactSet Research Systems Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 14.3, and the rate over the past five years is 12.1. This trend accentuates the company's continued capability to drive growth.
Conclusion
FactSet Research Systems Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. The company's strategic acquisitions and consistent revenue growth further solidify its competitive edge in the financial data and analytics industry. As FactSet Research Systems Inc continues to innovate and expand its offerings, it remains a compelling choice for value investors seeking long-term growth opportunities.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
