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Investing.com - Raymond (NSE:RYMD) James upgraded FactSet Research Systems (NYSE:FDS) from underperform to market perform on Thursday. The upgrade comes as the financial data provider trades at a P/E ratio of 31.2x and Price/Book of 7.7x, with InvestingPro analysis suggesting the stock is currently fairly valued based on its proprietary Fair Value model.
The firm noted that FactSet’s Annual Subscription Value (ASV) and revenue growth showed positive inflection in the fiscal third quarter of 2025, with revenue growing 5.1% year-over-year to $2.29 billion. Raymond James also highlighted improvements in the company’s sales pipeline as contributing factors to the more balanced outlook. Eight analysts have recently revised their earnings estimates upward for the upcoming period, according to InvestingPro data.
Despite the upgrade, Raymond James expressed ongoing concerns about budget pressures facing many of FactSet’s end markets. The firm also cited improved competition from Refinitiv as a factor that could limit potential upside in revenue and ASV growth.
The investment firm now views the risk/reward profile for FactSet as "relatively balanced," marking a shift from its previous more negative stance on the financial data provider’s stock.
FactSet provides financial data and analytics to investment professionals, including portfolio managers, market research analysts, and investment bankers. The company offers a wide range of services including data feeds, portfolio analytics, and research management solutions.
In other recent news, FactSet Research Systems Inc . reported its third-quarter earnings for fiscal year 2025, showcasing a mixed financial performance. The company announced an earnings per share (EPS) of $4.27, which fell slightly short of the projected $4.30. However, FactSet’s revenue exceeded expectations, reaching $586 million compared to the forecasted $580.54 million. This revenue beat was driven by a 5.9% year-over-year increase, indicating strong organic growth across various regions, particularly in the Americas and Asia Pacific. Despite the positive revenue results, FactSet’s adjusted operating margin declined to 36.8%, a decrease of 270 basis points from the previous year. The company also reported a 5% improvement in free cash flow, amounting to $229 million. FactSet reaffirmed its fiscal year 2025 guidance, expecting a strong fourth quarter with contributions from its GenAI initiatives. Additionally, FactSet’s CEO, Phil Snow, announced his retirement, with Sanoq Viswanathan set to take over the role in early September.
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