Home > Should you buy FactSet stocks ahead of the Q1 FY2022 earnings call?

Should you buy FactSet stocks ahead of the Q1 FY2022 earnings call?

FactSet (NYSE:FDS) announces its quarterly earnings on December 21. The market expects EPS of $3, but not all analysts are bullish. 

FactSet reports its quarterly earnings tomorrow, December 21, at 11:00 AM EST, and Wall Street expects EPS of $3. Also, the annual revenue estimate for the fiscal period ending August 2022 is $1.71 billion and growing, as FactSet delivered some impressive results in the FY2021.

In the previous fiscal year, FactSet ended with the highest year of incremental annual subscription value in the company’s history. Revenue grew in consequence by 6.5% and the diluted EPS by 7.4%.

FactSet is a financial data and analytics company. It serves investment communities worldwide and it achieved some impressive accomplishments in 2021.

First, it increased the dividend for the 22nd consecutive year. FactSet pays a quarterly dividend and has a payout ratio of 26.84% and a five-year dividend growth rate of 10.73%.

Second, it delivered the 25th year of consecutive adjusted diluted EPS growth. Even though it missed the quarterly estimates two times in the past four quarters, the annual EPS estimate for the fiscal period ending August 2022 is $12.22 and is forecast to reach $13.39 by August 2023.

What do analysts say about FactSet’s stock price?

Not everyone is bullish, as reflected by the number of analysts having a sell recommendation – 15 out of 30. Moreover, 10 analysts have neutral ratings while only 5 have buy ones.

Of the ones with a buy rating, representative is RBC Capital Markets. It recently maintained its buy recommendation for FactSet’s stock price with a price target of $453. On the other hand, Morgan Stanley is bearish on the stock, having maintained its sell recommendation with a price target of $323.

One of the explanations for the high number of analysts having issued sell ratings is the valuation grade. At the current stock market price, FactSet is valued at a P/E Non-GAAP ratio of 42.42, much higher than the sector median of 10.98. In other words, the P/E ratio is higher by over 284% than the sector median. FactSet’s stock price is up +42.29% YTD and over +186% in the last five years.

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