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Why FactSet Research Systems Inc. (NYSE:FDS) Could Be Worth Watching

Simply Wall St
·3 mins read

Today we're going to take a look at the well-established FactSet Research Systems Inc. (NYSE:FDS). The company's stock led the NYSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at FactSet Research Systems’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for FactSet Research Systems

What is FactSet Research Systems worth?

According to my valuation model, FactSet Research Systems seems to be fairly priced at around 12.56% above my intrinsic value, which means if you buy FactSet Research Systems today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $245.83, there’s only an insignificant downside when the price falls to its real value. What's more, FactSet Research Systems’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will FactSet Research Systems generate?

NYSE:FDS Past and Future Earnings April 23rd 2020
NYSE:FDS Past and Future Earnings April 23rd 2020

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for FactSet Research Systems. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? FDS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on FDS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on FactSet Research Systems. You can find everything you need to know about FactSet Research Systems in the latest infographic research report. If you are no longer interested in FactSet Research Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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.