Here’s Why You Should Retain FactSet Stock in Your Portfolio Now – January 10, 2025

FactSet Research Systems (FDS Quick QuoteFDS – Free Report) stock has had an impressive run over the past six months. Shares have risen 9.4% compared with the industry’s 5.6% growth and the Zacks S&P 500 composite’s 6.3% rise.

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The company’s earnings for fiscal 2025 are expected to increase 4.7% year over year, and revenues are expected to rise 4.5% year over year.

Image Source: Zacks Investment Research

Factors That Auger Well for FDS

FactSet and J.P. Morgan Securities Services have partnered to offer an advanced data management and performance solution through J.P. Morgan’s Fusion platform. This collaboration provides asset managers and asset owners with modern data management, portfolio analytics and outsourced accounting. It integrates accounting and investment records (ABOR/IBOR) with global support tools for data accuracy and consistency. The solution aims to reduce costs, enhance flexibility and offer customized portfolio analytics, addressing clients’ needs for a streamlined, efficient operating model.

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FactSet introduced its Intelligent Platform initiative, expanding on the success of its AI Blueprint from the previous year, and is now incorporating conversational AI at the platform level. FactSet also launched Internal Research Notes (IRN) 2.0, a significant upgrade to its Research Management Solutions tailored for buy-side and wealth management professionals. The company also unveiled its new Data as a Service (DaaS) solution, designed to streamline data collection, management and integration for data management teams at financial institutions, expanding its Managed Services offerings.

These initiatives highlight the company’s ongoing commitment to providing cutting-edge tools for financial professionals and position FactSet as a key player in modernizing financial data and analytics solutions, making it easier for clients to derive valuable insights and drive investment success.

FactSet’s dedication to sustainability, validated by the Science Based Targets initiative, showcases a strong strategic commitment to reducing greenhouse gas emissions and tackling the global climate crisis. By pledging to cut scope 1 and 2 emissions by 45% and scope 3 emissions by 25% by its 2030 fiscal year, FactSet sets clear, science-driven goals that support global climate action. The company’s alignment with global initiatives such as the United Nations Global Compact and Principles for Responsible Investment, along with the leadership of an executive-sponsored Sustainability Committee, highlights its commitment to achieving a net-zero future.

FDS’s commitment to rewarding its shareholders through dividends and share repurchases is commendable. In fiscal 2024, 2023 and 2022, the company repurchased shares worth $235 million, $177 million and $19 million, respectively. It paid out $151 million, $139 million and $126 million in dividends in 2024, 2023 and 2022, respectively. In the first quarter of fiscal 2025, it paid a quarterly dividend of $39.6 million or $1.04 per share.

FDS: Key Risks to Watch

Increased operating expenses are hurting FDS’ prospects. In the first quarter of fiscal 2025, total operating expenses rose 6.9% year over year. This rise in total operating expenses was primarily driven by a 16.7% year-over-year increase in selling general and administrative expenses.

FDS’ Zacks Rank and Stocks to Consider

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FDS currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the broader Zacks Business Services sector are Charles River Associates (CRAI Quick QuoteCRAI – Free Report) and Booz Allen Hamilton (BAH Quick QuoteBAH – Free Report) .

Charles River Associates currently carries a Zacks Rank of #2 (Buy). It has a long-term earnings growth expectation of 16%.

CRAI delivered a trailing four-quarter earnings surprise of 31%, on average. Shares of CRAI have surged 79.4% in the past year.

Booz Allen Hamilton currently sports a Zacks Rank of #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BAH has a long-term earnings growth expectation of 13.3%. It delivered a trailing four-quarter earnings surprise of 11.7%, on average. Shares of BAH have risen 2.8% in the past year.