FDS — FactSet Research Systems Inc.

Price action is constructive—FDS has rallied hard off the 52-week low and is above all major moving averages. But the consensus rating is Hold, with 7 sells vs 2 buys, the average price target is ~$251 (17% below price), and short interest is ~12.8% of float. So the tape says bullish while fundamental analysts and short sellers are skeptical.

Revenue has accelerated modestly: YoY growth went from ~4.5–5% in late FY2024 to 6.4% in Q3 FY2026 (latest quarter $622.9M vs $585.5M a year ago). Operating cash flow is strong—latest quarter OCF $284.5M, +12.1% YoY, and trailing FCF is ~$708M. GAAP operating margin, however, compressed to 26.7% in Q3 FY2026 from 33.2% in Q3 FY2025, and GAAP EPS fell to $3.51 from $3.88; adjusted EPS rose 6.1% to $4.53. Some of the margin dip is investment/AI/cloud cost, and the Q4 FY2023/FY2024 data contain one-off charges that distort historical averages. Net: steady mid-single-digit growth and strong cash conversion, but visible GAAP margin pressure in the latest quarter.

At $304.47 as of 2026-08-27, FDS is not expensive by its own history: TTM P/E is 19.9x vs 5-yr avg 33.3x, P/S is 4.4x vs 7.9x, and forward P/E is ~17.1x on next-FY EPS of $17.79. But those historical averages were inflated by impairment-depressed earnings in FY2023-24, and PEG of ~2.3x against ~6-8% growth is not obviously cheap. The sell-side average target of ~$251 says the stock has already outrun most fundamental estimates.

The stock is pricing in a clean execution scenario: sustained ~6-7% revenue growth, margin stabilization, and eventual AI monetization. It is not pricing in a miss—if FY2027 guidance disappoints, the high short interest and low analyst targets leave room to fall to the $250-270 zone. If guidance is upbeat, the stock can test the $320-350 area and force short covering. The playbook is to wait for the September 17 guide rather than chase the current move.

As of 2026-08-27, RSI(14) was 64.4—bullish but not overbought. Price was +6.4% above its 20-day, +16.2% above its 50-day, and +22.5% above its 200-day SMA, so the trend is clearly up. Implication: momentum is in the buyer's favor, but the stock is extended enough that a pullback/consolidation is normal; chasing at $304 after a +22% run above the 200-day has poor entry timing.

• Bank and asset-manager tech budgets remain tight; FactSet's growth is capped by seat-count expansion and ASV rather than big project wins.
• AI/cloud partnership costs (e.g. Google Cloud) are inflating operating expenses and pressuring GAAP margins in the near term.
• Capital markets activity (M&A/IPO) has stabilized but hasn't rebounded strongly enough to drive a step-change in terminal demand.
• Competition from Bloomberg, LSEG, and S&P Global keeps pricing power limited in the core desktop/data business.
• Lower rates would ease client IT budgets, but no immediate rate pivot is apparent in the macro backdrop.

• Q4 FY2026 earnings on Sept 17, 2026 and the first look at FY2027 organic ASV/revenue guidance.
• AI monetization metrics—any disclosure showing AI is lifting net revenue retention or average contract value.
• Upward analyst target revisions after recent beats, which could close the target-vs-price gap.
• Short covering if the 12.8% short interest compresses following a strong guide.

• Broad sell-side skepticism: average target ~$251 vs $304.47, so the stock is above most analysts' fair values.
• Operating margin compression from AI/cloud/content costs could continue and erode EPS quality.
• If growth stays ~6% and the market re-rates to 15x forward EPS, the stock sits near $267.
• Competitive disruption and consolidation among buy-side clients reduce the available terminal/seat market.
• High short interest is a double-edged sword: a miss could trigger a sharp unwind of the recent rally.

FactSet is a good business—sticky subscriptions, high ROIC, strong free cash flow, steady mid-single-digit growth—but the current setup is not a clear bargain or a clear short. As of 2026-08-27 the shares trade roughly around my fair value estimate (~$314), and the September FY27 guide is the key data point. I lean neutral: a hold-quality company that needs either a pullback or better margin/AI news to become compelling.

Calculated as ~17.5x next-fiscal-year EPS of $17.79 → $311, cross-checked with ~16x trailing FCF/share of ~$19.91 → $319, centered near $314. The multiple reflects FDS's high-quality subscription model, strong cash conversion, and mid-single-digit growth, but also margin/AI/competitive risk that keeps it below the current 20x trailing P/E.