Financial Analytics: Just the Facts on FactSet

07/10/2020 5:00 am EST


Eddy Elfenbein

Editor, Growth Stock Advisor

If you’re looking for something for the long term, consider a stock like FactSet (FDS); the company provides financial information and analytic software for investment professionals. That’s a good business to be in, asserts Eddy Elfenbein, editor of Growth Stock Advisory.

FactSet recently reported very good earnings, with adjusted diluted earnings rising by 9.2% to $2.86 per share. That beat estimates by 43 cents per share.

In May, FactSet increased its dividend by five cents to 77 cents per share. I’ll let you in on something: In the company’s press release, FactSet said that it has raised its dividend for 15 consecutive years. That’s actually incorrect; it’s longer than that. FactSet has increased its dividend every year since 1999—21 years!

A key stat to watch for FactSet is Annual Subscription Value (or ASV). At the end of May, ASV plus professional services stood at $1.52 billion. This is important because annual ASV retention is over 95%.

At the end of the quarter, FactSet’s client count stood at 5,743. User count rose by 2,199 to 131,095, and employee count now stands at 10,065. That’s up 7.5% in the last year.

During Q3, FactSet bought back 46,689 shares for a total cost of $12.4 million. That’s an average price of $266.09. I’m generally not a fan of buybacks, but given the current FDS share price of $342, that turned out to be a shrewd investment in itself. In March, FactSet’s board added another $220 million to its existing buyback authorization.

Now for guidance: FactSet expects full-year revenues to range between $1.485 billion and $1.49 billion. The high ASV numbers help a lot with revenue-forecasting.

The company also expects full-year earnings to range between $10.40 and $10.60 per share. That’s an increase from the previous range which was $9.85 to $10.15 per share. Wall Street was very pleased with this news. The shares gapped up 15.1% and hit a new all-time high. FactSet remains a very strong buy.

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