FactSet's Four Beats Can't Close the Valuation Gap
FactSet delivered four consecutive EPS beats, the latest expanding to 3.9% above expectations. Yet the stock trades 7.7% above the analyst consensus target at $301.67, while revenue grows at just 6.3%
FactSet's Four Beats Can't Close the Valuation Gap
NEW YORK, October 18 —
Four consecutive EPS beats, including the widest positive surprise of the run, have not convinced analysts that FactSet Research Systems Inc. (FDS) deserves its current price: the stock trades at $301.67, above the analyst consensus target of $280, while 10.3% of the float remains sold short.
- Q4 EPS of $4.52 beat the consensus by 3.9%, the largest positive surprise in the four-quarter streak
- $642M trailing free cash flow; 50.6% gross margin on $2.48B trailing twelve-month revenue growing at 6.3%
- Stock at $301.67 trades 7.7% above the $280 analyst consensus target; 10.3% of the float is sold short
The Beat That Widened
FactSet Research Systems supplies financial data workstations, portfolio analytics, enterprise data feeds, and managed services to institutional asset managers, hedge funds, bankers, and private equity professionals across the Americas, EMEA, and Asia Pacific. Its four-quarter EPS surprise sequence ran 3.4%, 1.8%, 1.8%, and then expanded to 3.9% on the September 30 filing. Consensus estimates typically narrow the gap as analysts calibrate upward; here the gap grew. Trailing free cash flow of $642 million and a 50.6% gross margin show how durably these data subscriptions embed themselves in investment workflows once installed.
Six Percent Growth Against a Premium Price
The problem is the revenue line, not the earnings line. Trailing twelve-month revenue of $2.48 billion grows at 6.3%, solid for a data subscription business but modest against a stock already trading above analyst consensus. The market appears to be pricing in a step-change from FactSet's Google Cloud partnership on AI-powered financial solutions or a deeper push into the wealth manager segment the company already serves. A DCF model makes the required growth assumption explicit. Short sellers at 10.3% of the float are taking the other side: that 6.3% does not justify the premium.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| FDS | $10.7B | 13.9x | +3.9% |
| JKHY | $10.7B | 19.4x | -1.2% |
| BRO | $23.2B | 14.4x | -20.7% |
| IT | $13.0B | 12.5x | -14.3% |
| MSCI | $41.4B | 25.3x | +6.0% |
| MKTX | $5.8B | 18.8x | -3.7% |
One Metric Decides the Short Case
The forward-looking thesis turns on one metric: whether revenue growth can accelerate beyond that rate. FactSet's institutional reach is real; the company tracked a record 72 S&P 500 companies issuing positive guidance ahead of the third-quarter 2026 earnings season, the highest count since tracking began in 2006, showing how deeply its datasets are embedded in capital markets. Whether the Google Cloud partnership converts that reach into higher-value AI contracts remains open, and the next quarterly filing carries the answer. Run the free FactSet Research Systems Inc. deep-dive → to track whether the revenue line moves.
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Frequently Asked Questions
Does FactSet stock deserve its current price?
FactSet trades at $301.67, which is 7.7% above the analyst consensus target of $280. While the company delivered four consecutive EPS beats including a 3.9% positive surprise, short sellers holding 10.3% of the float argue that 6.3% revenue growth does not justify the premium. Whether the company's Google Cloud partnership can accelerate growth is the key unresolved question.
How much did FactSet beat earnings expectations?
FactSet's Q4 EPS came in at $4.52, beating the consensus estimate of $4.345 by 3.9%, the widest positive surprise in the company's four-quarter beat streak. The prior three quarters saw positive surprises of 3.4%, 1.8%, and 1.8%.
What is FactSet's revenue growth rate?
FactSet's trailing twelve-month revenue is $2.48 billion growing at 6.3% annually. This solid growth rate for a data subscription business is modest compared to the stock's current valuation above analyst consensus, according to short sellers and skeptics.
How profitable is FactSet?
FactSet generates $642 million in trailing free cash flow with a 50.6% gross margin on $2.48 billion in trailing twelve-month revenue. These metrics demonstrate how durably the company's financial data subscriptions embed themselves in investment workflows once installed.
What record did FactSet track in earnings season?
FactSet tracked a record 72 S&P 500 companies issuing positive guidance ahead of third-quarter 2026 earnings, the highest count since tracking began in 2006. This reflects how deeply FactSet's datasets are embedded in capital markets operations.
FactSet Research Systems filed both a leadership change and its fourth consecutive quarterly earnings beat within a five-day window in late September 2026 — yet the stock at $301.67 continues to trade above the analyst consensus price target of $280, with 10.3% of the float sold short against the company.