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Has FactSet Research Systems Inc. (NYSE:FDS) Improved Earnings Growth In Recent Times?

Simply Wall St

Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at FactSet Research Systems Inc.'s (NYSE:FDS) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.

View our latest analysis for FactSet Research Systems

How Well Did FDS Perform?

FDS's trailing twelve-month earnings (from 30 November 2019) of US$362m has jumped 29% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.7%, indicating the rate at which FDS is growing has accelerated. What's enabled this growth? Let's see whether it is only attributable to an industry uplift, or if FactSet Research Systems has experienced some company-specific growth.

NYSE:FDS Income Statement, January 17th 2020
NYSE:FDS Income Statement, January 17th 2020

In terms of returns from investment, FactSet Research Systems has invested its equity funds well leading to a 52% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 21% exceeds the US Capital Markets industry of 1.5%, indicating FactSet Research Systems has used its assets more efficiently. However, its return on capital (ROC), which also accounts for FactSet Research Systems’s debt level, has declined over the past 3 years from 40% to 29%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.08% to 83% over the past 5 years.

What does this mean?

FactSet Research Systems's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as FactSet Research Systems gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research FactSet Research Systems to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for FDS’s future growth? Take a look at our free research report of analyst consensus for FDS’s outlook.

  2. Financial Health: Are FDS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 November 2019. This may not be consistent with full year annual report figures.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.