FDSNYSEThe short version
FactSet Research Systems Inc.
FactSet sells financial data, analytics and workflow software to the investment industry on multi-year subscriptions — 45 straight years of revenue growth, though its shares have roughly halved from a late-2024 peak.
The stock compounded for years, peaked near $496 in November 2024, bottomed around $190 in early 2026, and trades near $262 today.
$262
Share price
$10.1B
Market cap
$2.32B
FY2025 revenue
>95%
ASV retention
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The statements
A cash machine compounding in the mid-single digits
FY2021 → FY2025as reported · $
Revenue$2.3B+5%
Operating margin32.2%+0.4pp
Net income$597M+11%
EPS$15.55+12%
Free cash flow$585M+0%
Open the full statements →FY2021–FY2025 as reported; the full statements sit in the Metrics tab.
- Revenue. Up from $1.59B in FY2021 to $2.32B in FY2025, roughly 9.8% a year — but reported growth has settled to 5.4%, down from a mid-teens pace lifted by the 2022 CUSIP acquisition.
- Margins and EPS. Operating margin reached 32.2% and diluted EPS $15.55, up 11.8%. Strip a divestiture gain and an easy prior-year base and the underlying rate was near 3%.
- Cash. Free cash flow rose every year to $617M — a 27% margin — and funded $460M of dividends and buybacks in FY2025. Net leverage sits near one times.
Skin in the game
Alignment is engineered through pay, not owned
Insider open-market activity since 2023 (shares)
Four buys of ~1,200 shares against 47 sales of ~82,900 through the halving.
- FactSet's first outside CEO (Sanoke Viswanathan, ex-JPMorgan) took over owning zero shares at a firm whose directors and officers hold just 1.2% in total (~0.2% outright) and where no insider bought the halving of the stock, so alignment is now engineered through a ~$71M pay package, not owned.
- The other side. The package is about 79% equity, its $22M of performance options vest only on a roughly 50% share gain, six-times-salary ownership rules force a stake to build, and outside manager Baron lifted its position to 9.35% into the decline.
The CGS deal
One acquisition reset returns and split earnings from GAAP
Return on capital employed
About 25% before the 2022 CUSIP purchase, a 13% trough, ~20% since.
- The $1.932 billion CGS purchase both reset FactSet's return on capital from the mid-20s to about 20% and left a recurring ~$53M-a-year amortization add-back that permanently flatters adjusted EPS above GAAP, so the return-on-capital decline and the earnings-quality gap share one cause.
- Still accretive. At about 20% ROCE the deal earns well above a roughly 9% cost of equity, and it bought a genuine monopoly — the exclusive license to run the CUSIP securities-identifier system.
The de-rating
A premium compounder marked down to a market multiple
From ~36x trailing earnings at the 2024 peak to 16.9x now.
- The fall. The shares dropped from $495.72 in November 2024 to $262.46, roughly halving, as reported revenue growth slid from 15.9% in FY2022 to 5.4% in FY2025.
- Two triggers. Organic growth reset to mid-single digits, and the market began pricing generative AI as a threat to the data-and-terminal model.
- The multiple. Near the peak the stock traded around 36x trailing earnings; today it is 16.9x, and about 14.7x the $17.81 the Street expects for FY2026.
Reported vs underlying
The 11.8% EPS headline flatters a low-single-digit year
FY2025 growth: reported vs adjusted
| FY2025 growth | Reported | Adjusted |
|---|---|---|
| Operating income | +6.7% | +1.3% |
| Net income | +11.2% | +2.6% |
| Diluted EPS | +11.8% | +3.2% |
The gap is a divestiture gain and a weak prior-year base — disclosed, and genuinely one-time.
- The wedge. A $0.45-per-share divestiture gain and a prior year that carried a $1.03 sales-tax charge lifted the reported line; adjusted diluted EPS grew 3.2%.
- Not all one-time. About $53M a year of CUSIP-deal amortization — roughly $1.38 a share — permanently sits between GAAP and adjusted earnings.
- The read. Anchor on 11.8% and you overstate how fast this franchise compounds; the underlying FY2025 rate was low single digits.
The moat
Retention above 95% held through a full cycle
>95%
ASV retention (min, 6 yrs)
91%
Client retention
8,996
Clients
237,324
Users
- Sticky by design. FactSet runs analytics on more than 6 million institutional portfolios nightly; ripping it out means re-plumbing daily production workflows.
- Narrow, not vast. The moat is switching-cost deep but small in scale — $2.32B of revenue against data majors several times its size — so it defends share more than it out-grows the market.
- Pricing power. Annual price increases are a recurring driver of subscription value, and nine of the ten largest clients have stayed more than 20 years.
The inflection
Organic subscription growth has climbed five straight quarters
Organic ASV growth, by quarter
From a 4.8% FY2024 trough to 7.1% at the May-2026 quarter.
- Reversing. The slowdown that framed the de-rating has turned: organic ASV growth troughed at 4.8% in FY2024 and reached 7.1% by the May-2026 quarter.
- Bought with spend. The re-acceleration came alongside margin investment — adjusted operating margin fell about 300 basis points year-over-year that quarter.
- Caveat. The 7.1% print is a seasonal high, ahead of the roughly 5.4–6.7% pace management guides for full-year FY2026.
AI: threat or tailwind
Early AI monetization, still a small dollar base
>10%
of Q3 ASV growth from AI SKUs
>20%
of top-100 clients on paid connectors
30–50bps
FY2025 GenAI ASV guide
- Evidence, not theory. Management reports AI-linked deals raise contract value about 90% of the time, and one top-ten client doubled its data subscriptions because of AI.
- Still early. Over 10% of a ~$165M annual growth increment is on the order of $16–17M — management-sourced, not an audited line, on a $2.5B base.
- The bear case. If frontier models and scraped public data erode willingness to pay for proprietary content, a mid-sized specialist is more exposed than the scale leaders.
Industry backdrop
A durable market, but FactSet grew slower than every large peer
Reported revenue growth, latest fiscal year
Industry spend grew ~6.5% in 2025; the fastest pockets are index, ratings and private markets.
- Where growth concentrates. The fastest sub-segments — index licensing, ratings, private markets — are where peers are heavy and FactSet is light.
- Cross-currents. Active-to-passive and vendor consolidation are tailwinds for index and ratings franchises but headwinds for a buy-side workstation business.
- Where it does catch it. Wealth grew organic ASV 10% and Asia Pacific 8% in early FY2026, pulling against a low-single-digit legacy buy side.
The thin spot
Under-indexed to the industry's fastest dollars
Private-markets franchises vs FactSet
| Franchise | Owner | Growth |
|---|---|---|
| PitchBook | Morningstar | +8.6% |
| Private Capital Solutions | MSCI | +9.5% |
| Embedded (Cobalt + content) | FactSet | n/d |
PitchBook alone earns revenue near 29% of all of FactSet — and grows faster.
- A follower here. FactSet meets private markets with a $51M monitoring tool and a content build, not a standalone franchise; it discloses no private-markets revenue line.
- The counter. Its bet is integration — piping private-markets data into the public-market workflows its 82% buy-side base already runs — a cheaper, possibly more defensible path than out-building an incumbent.
What the Street expects
Mid-single-digit forward growth, and a mean target below spot
Revenue, actual and consensus ($M)
Consensus models ~6% top-line growth holding; adjusted EPS $17.81 then $19.67.
- No re-acceleration priced. Consensus carries FY2026 revenue near $2.47B (+6.4%) and FY2027 near $2.61B (+5.8%) — mid-single digits, not the ASV inflection.
- Cautious desks. Of recent ratings, two buys against ten holds and six sells; the $254 mean target sits below the $262 spot, in a $210–$340 range.
Margin of safety
The price pays for ~3% growth; the business is doing more
Two-stage DCF fair value by sustained FCF growth
0%
$220
2%
$256
3%
$276
4%
$298
5%
$321
6%
$347
9% cost of equity, 3% terminal, ~$1.0B net debt. Price implies ~2.7–3.6% perpetual growth.
- The asymmetry. At $262 the market discounts roughly 2.7–3.6% perpetual free-cash-flow growth against organic subscriptions re-accelerating to 7.1% — safety from quality, not from a bargain price.
- Bounded downside. Even the bear DCF lands within about 16% of spot because cash generation is so durable; the base case points to $300–350.
- Not statistically cheap. At ~15x forward a mid-single-digit grower is priced for a fair, not a generous, return — and the mean target sits just below spot.
What to watch
A durable franchise re-accelerating into a de-rating — priced for little growth, yet not statistically cheap.
- 01FY2027 organic ASV guidance on 17 Sep 2026: a guide below ~5% confirms deceleration; 6%+ signals durability.
- 02FY2027 adjusted operating margin guide: a mid above ~35.5% means the trough is reversing; flat or down reads as structural.
- 03AI-SKU and paid-connector disclosure: a stall in the >10% ASV-growth share or >20% top-100 adoption would show the flywheel slowing.
- 04Estimate revisions versus price: renewed downgrades signal re-pricing; upgrades pulling targets above $262 signal a re-rating.
This distills a study built chapter by chapter — the statements, the moat, ownership, capital allocation, valuation, and what to watch.
Compiled from the full report · 2026-07-17 · For information, not investment advice.