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Can FactSet Research (FDS) Pull a Surprise in Q2 Earnings?
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FactSet Research Systems Inc. (FDS - Free Report) is set to report second-quarter fiscal 2017 results on Mar 28. Last quarter, the company posted a positive earnings surprise of 2.94%. Let’s see how things are shaping up for this announcement.
Factors to Consider
FactSet reported mixed results for the fiscal first quarter, wherein the bottom line came ahead of the Zacks Consensus Estimate but the top line missed the same. Nonetheless, we are encouraged by the favorable year-over-year comparisons 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 share repurchase program is expected to support earnings in the long run apart from boosting shareholders’ value.
Recently, FactSet announced the acquiring of BISAM Technologies S.A. FactSet believes that BISAM’s B-One solution will enhance its analytics suite and client-reporting capabilities. Its product – Cognity – is expected to boost FactSet’s risk analysis for derivatives and quantitative portfolio construction. Hence, we believe that that the synergies from the acquisition will provide tailwind for the company’s to-be-reported quarter.
Going forward, FactSet 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 Research Systems Inc. Price and EPS Surprise
Our proven model does not conclusively show that FactSetwill 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. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.80 per share. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although FactSet’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat:
CareDx, Inc (CDNA - Free Report) , with an Earnings ESP of +5.56% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Can FactSet Research (FDS) Pull a Surprise in Q2 Earnings?
FactSet Research Systems Inc. (FDS - Free Report) is set to report second-quarter fiscal 2017 results on Mar 28. Last quarter, the company posted a positive earnings surprise of 2.94%. Let’s see how things are shaping up for this announcement.
Factors to Consider
FactSet reported mixed results for the fiscal first quarter, wherein the bottom line came ahead of the Zacks Consensus Estimate but the top line missed the same. Nonetheless, we are encouraged by the favorable year-over-year comparisons 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 share repurchase program is expected to support earnings in the long run apart from boosting shareholders’ value.
Recently, FactSet announced the acquiring of BISAM Technologies S.A. FactSet believes that BISAM’s B-One solution will enhance its analytics suite and client-reporting capabilities. Its product – Cognity – is expected to boost FactSet’s risk analysis for derivatives and quantitative portfolio construction. Hence, we believe that that the synergies from the acquisition will provide tailwind for the company’s to-be-reported quarter.
Going forward, FactSet 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 Research Systems Inc. Price and EPS Surprise
FactSet Research Systems Inc. Price and EPS Surprise | FactSet Research Systems Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that FactSetwill 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. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.80 per share. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although FactSet’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks that you may consider, as our model shows that they have the right combination of elements to post an earnings beat:
Constellation Brands, Inc. (STZ - Free Report) , with an Earnings ESP of +0.73% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
CareDx, Inc (CDNA - Free Report) , with an Earnings ESP of +5.56% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>