In which business areas is Factset active?
Factset Research Systems Inc (Factset) is a global provider of digital financial platforms and business solutions, according to Reuters. The company provides financial data and market information on securities, companies, industries and individuals, enabling its clients to research investment ideas and analyze, monitor and manage their portfolios. The company's products and services include workstations, portfolio analysis and corporate solutions. In addition to research, the workflow solutions include consulting, analysis and trading as well as content and technology solutions. The software can be individually adapted to the needs of the customer and the data can be accessed on the desktop and mobile platform as well as cloud-based or as an interface. Factset makes its money in the areas of research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting.
Before the quarterly figures - How is Factset starting Q3 2024?
Factset will publish its quarterly figures for Q3 2024 on 21.06.2024. Factset has not necessarily been convincing in the recent past. A year ago, the share price was USD 390; it is currently trading at USD 407, with shareholders enjoying a slight gain of 4% and a dividend yield of 1%. Investors who have invested since the beginning of the year are sitting on a loss of 12.24%. This is a poor performance in view of the positive index developments.
A look at the Trader Workstation chart from 20.06.24 shows that the share has always fluctuated between the USD 440 and USD 480 levels in recent months. In which direction will the pendulum swing at Factset? According to TOGGLE's AI, a negative price trend is imminent.
If the quarterly figures are better than expected, this will still lead to an average loss of 2.60% two weeks after the figures are announced, according to TOGGLE.
In the negative scenario, Factset underperforms the expected quarterly figures. According to TOGGLE, this scenario leads to an average loss of 2.73% two weeks after the announcement of the figures.
Fundamental data analysis - The strengths and weaknesses of Factset
Aus vergangenen Finanz- und Geschäftsdaten lassen sich in der Fundamentalanalyse Rückschlüsse auf die aktuelle Lage eines Unternehmens ziehen. Hierbei sind Faktoren wie Verschuldung, Gewinn und Cashflow von großer Bedeutung. Um diese Kennzahlen angemessen zu interpretieren, ist es entscheidend, sie in Relation zu einem Vergleichsuniversum zu setzen. Auf diese Weise lässt sich beurteilen, ob das Unternehmen im Vergleich zu anderen in seiner Branche eine eher starke oder schwache Position einnimmt.
Is Factset crisis-proof? - A look at the balance sheet
Factset's balance sheet has been negatively impacted by the coronavirus pandemic in recent years. Recently, the figures have improved noticeably.
The share of non-current assets in total assets was increased from 60% in the 2020 financial year to 80.5% in the 2023 financial year. In Q2 2024, this figure was also above 80%.
Factset's leverage ratio has remained constant at around 55 to 60% since 2020; in the past quarter it was 57%. Especially in the high-interest phase, it is important that companies do not take on too much debt. On a positive note, equity increased from USD 897 million to USD 1.7 billion between 2020 and Q2 2024.
Coverage ratio A is the ratio of equity to fixed assets. In the 2022 financial year, Factset reported only 42% here; in Q2 2024, the coverage ratio A was 53%. There is still room for improvement here.
In summary, Factset's debt has remained constant since 2020, while coverage has stabilized after a slump. Equity has doubled. Factset can therefore be described as a crisis-proof company. All financial data presented here was calculated on the basis of Yahoo Finance.
How profitable is Factset?
The profitability of the financial data provider is impressive. In 2020, the net return on assets was 2.2%, in the 2023 financial year it was 16.5% and in Q2 2024 Factset was 5.2%.
In Q2 2024, Factset achieved a net return on sales of 35%. If Factset maintains this level over the entire financial year, the company will reach a new five-year high.
The net return on equity is also at a very good level. In the 2023 financial year, Factset achieved 40.4% here. In Q2, the company is at 11.2%.
The cash flow margin is calculated from the ratio of operating cash flow to sales. Here, too, Factset is heading for a five-year high of 28.6%.
Behind Fact set has had a very successful quarter that gives us hope for more. Although equity was doubled, the net return on equity was maintained at a very high level. Five-year highs are on the horizon for other profitability indicators.
Popular fundamental data on Factset
Factset's price/earnings ratio (P/E ratio) of 32.2 in Q2 2024 was significantly lower than Thomson Reuters' P/E ratio of 44.7 and Morningstar's P/E ratio of 57.9. Factset is therefore valued more favorably than its competitors.
The price-to-book ratio of 8.6 is in line with the industry average. Thomson Reuters has a P/B ratio of 9.4 and Morningstar has 8.9.
While Thomson Reuters pays a dividend of 1.3%, Morningstar pays 0.6% to its shareholders. Factset pays a dividend of 1%.
Factset is valued more favorably than its competitors, but pays a lower dividend than Thomson Reuters. Overall, all companies are at a similar level. The experts expect sales to increase by 4.3% to USD 552.7m. The data cited here comes from Trader Workstation and Yahoo Finance.
Technical analysis - What picture does the Factset chart paint?
Shortly before the quarterly figures for Q2 2024 were reported on 21.03.24, Factset shares fell from USD 488 to USD 445. In the last few days there has been hardly any volatility at Factset, the share is now at USD 407 on 20.06.24.
The Ichimoku indicator clearly clouds the impression of Factset. All five individual indicators of the Ichimoku point to falling prices. The chart has recently fallen below the 200-day line and the 50-day line. Factset is currently 8.8% below the 200-day line and 4.5% below the 50-day line.
The relative strength indicator (RSI) indicates whether a share is overbought or oversold. From a level of 70, the share is considered overbought. At a level below 30, the stock is considered oversold. According to this chart from Stock3, Factset is fairly valued at 46 according to the RSI.
Conclusion: The evaluation of Factset
Factset has lost momentum in recent years. Since the beginning of the year, the share has lost more than 12%, significantly underperforming the Dow Jones (+3.4%) and the S&P 500 (+16%).
TOGGLE's AI forecasts slightly falling share prices in the event of both better and worse quarterly figures. Factset's balance sheet shows a constant debt/equity ratio with volatile profitability. However, the higher interest rate means that a constant level of debt is also more expensive for Factset. On a positive note, equity has doubled since 2020.
Factset's chart, on the other hand, pours water on the wine. According to the Ichimoku indicator, the Factset share could fall further. This impression is reinforced by the fact that the share has fallen below the 200-day line and the 50-day line. The previous support lines are therefore now resistances. The RSI indicates a fair valuation.
As the fundamental and chart analysis does not provide a consistent picture, Factset must be rated HOLD here.
