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FactSet (FDS) to Report Q4 Earnings: What's in the Cards?

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FactSet Research Systems Inc. (FDS - Free Report) is set to report fiscal fourth-quarter 2016 results on Sep 27, 2016. Last quarter, the company posted a positive earnings surprise of 0.61%. Let us see how things are shaping up for this announcement.

Factors to Consider

FactSet reported modest third-quarter fiscal 2016 results. Nonetheless, year-over-year comparisons were favorable on both counts. Moreover, the company has a high client retention ratio, which is a positive. Also, ASV increased year over year and the company added a good number of clients.

The company strives to maximize shareholder value. In its efforts to do so, the business information services provider recently completed the sale of its two low-margin businesses and announced an accelerated share repurchase program.

Notably, the company continues with product innovation across its segments with special emphasis on financial services to gain more customers. Moreover, the company’s acquisitions of Portware, Revere Data, Matrix Data and Code Red will enhance its product suite and help it to evolve as a global financial database company. It will also help FactSet to maximize value for its partners and provide exclusive content set.

Nonetheless, competition from Bloomberg L.P., Dow Jones & Company Inc., MSCI Inc. (MSCI - Free Report) and Thomson Reuters, which are also introducing substitute products at competitive prices, is a headwind.

FACTSET RESH Price and EPS Surprise

Earnings Whispers?

Our proven model does not conclusively show that FactSet Research is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Zacks ESP: Earnings ESP for FactSet Research is -1.18%. This is because the Most Accurate estimate of $1.68 per share is lower than the Zacks Consensus Estimate of $1.70.

Zacks Rank #4 (Sell): We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks to Consider

Here are some companies with a positive ESP and a favorable Zacks Rank that you may want to consider:

Actuant Corporation (ATU - Free Report) with Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carnival Corporation (CCL - Free Report) with Earnings ESP of +9.52% and a Zacks Rank #3.

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