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Reasons to Retain FactSet (FDS) Stock in Your Portfolio

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FactSet Research Systems Inc. (FDS - Free Report) has an impressive Growth Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.

FactSet’s fiscal 2022 and fiscal 2023 earnings are expected to improve 16.1% and 10.3%, respectively, year over year. Revenues are anticipated to rise a respective 14.1% and 12% in fiscal 2022 and fiscal 2023.

FactSet’s stock has gained 7.6% over the past year against 16.3% decline of the industry it belongs to and 8.9% fall of the Zacks S&P 500 composite.

Factors That Auger Well

FactSet has been engaged for more than 40 years in delivering extensive data, sophisticated analytics and flexible technology to global financial professionals, and is currently benefiting from a growing customer base and strong global presence.

FactSet’s cash and cash equivalent balance of $808 million at the end of second-quarter fiscal 2022 was above the long-term debt level of $575 million, underscoring that the company has enough cash to meet this debt burden. The company has no short-term debt to clear off. A strong cash position allows FactSet to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payments and share repurchases.

Over the years, FactSet has made several acquisitions to expedite growth. The recent buyout of CUSIP Global Services from S&P Global (SPGI - Free Report) is expected to significantly boost FactSet’s open data strategy and expand its position in the global capital markets. Another acquisition, Cobalt Software, is expected to enhance the company’s data and workflow solutions, and expand its private markets offering.

Some Risks

FactSet continues to face stiff competition from other players in the market providing financial market data, analytics and related services. These competitors may be able to expand their offerings and data content more effectively, price their products more aggressively or respond more rapidly to situations developing in the marketplace in order to attract new clients and retain the existing ones.

Zacks Rank and Stocks to Consider

FactSet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

A couple of top-ranked stocks in the broader Zacks Business Services sector are Avis Budget Group, Inc. (CAR - Free Report) and Cross Country Healthcare (CCRN - Free Report) .

Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%. 

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average. 

Cross Country Healthcare sports a Zacks Rank of 1. CCRN has a long-term earnings growth expectation of 6.9%.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.