3/10 · Low — ~7% organic ASV growth, decelerating, in a maturing terminal market that AI may be attacking
Technicals
Downtrend — $250, −44% off 52-wk high, at the 200-DMA, RSI 58, −44% 12-mo (SPY +21%)
Conviction
Low — 0 expert voices in the KB; call rests entirely on fundamentals + quant
Position sizing
Watch-list only; no position until growth stabilizes or the price pays you for the AI risk
Next catalyst
2026-09-17 Q4 FY26 earnings (Street EPS $4.34)
Single biggest risk
Generative AI commoditizing the data-terminal moat — the thing the −44% drawdown is already pricing
One-line thesis. FactSet is a genuinely elite recurring-revenue business (95%+ subscription retention, 51% gross margin, 27% ROE) that the market has cut nearly in half in a year over two real worries — growth has slowed to ~7% and generative AI could erode the terminal moat — leaving a quality franchise at a fair-but-not-screaming price and, honestly, no expert conviction in our KB to lean on either way. Watch, don't chase.
◆ Synthos call — WatchFDS is a business we want at a price we don't have — it becomes a Buy below ~$241; until then, do nothing.
Downside Risk (lower = safer)
5/10 · Moderate
Cheap vs its own history & low beta 0.72 — but AI-disruption overhang and a -44% 12-mo drawdown say the market is repricing the moat.
Growth Quality
6/10 · High
Elite recurring model (95%+ ASV retention, 51% GM, 27% ROE) but growth has slowed to ~7% organic and margins are compressing.
Exponential Potential
3/10 · Low
6-7% ASV growth, decelerating, in a maturing terminal market AI may be attacking — a compounder losing steam, not an exponential.
⚖ Reverse-DCF cross-checkMarket-implied growth ≈ 8%/yrTo justify today’s $250, earnings would have to compound roughly 8% a year for 10 years (9% discount rate). Analysts forecast ~12%/yr, so the market is pricing in LESS than what the Street expects.What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Buy — CoreOwn it as a foundation — start or add now, size it for years, let dips be gifts.
Buy — TacticalGood price + confirmed trend + a defined exit — buy the setup, not a marriage.
WatchWe want the business, just not at this price/setup — act only when the listed trigger hits.
HoldFine to keep if you own it — no reason to buy more; new money does better elsewhere.
AvoidDon't own it — the problem is the business or the expectations, so a cheaper price won't fix it.
In plain English
FactSet sells a subscription to financial data and analysis software — think of it as a specialized, very expensive "Bloomberg-lite" that portfolio managers, banks, and wealth advisors rent by the seat. Almost all of its money is recurring: clients renew year after year (retention is above 95%), which is a wonderful, sticky business.
Two things went wrong for the stock (not yet the business): growth slowed from double digits to about 7% a year, and investors got scared that AI chatbots could do a lot of what a FactSet terminal does — cheaper. So the stock fell from about $450 to $250 in a year, roughly cut in half.
Is it cheap? Fairly priced, not a bargain. You pay about 16× earnings for a company still growing modestly and gushing cash — reasonable, but the AI worry is real and unresolved. Our verdict is Watch: put it on the list, wait for either a lower price or proof the moat holds.
Here's what our three scores mean in everyday terms:
Downside Risk 5/10 (middle). The stock doesn't swing wildly and it's much cheaper than it was — but a 44% fall in a year tells you the market is genuinely unsure the moat survives.
Growth Quality 6/10 (good, not great). A superb, sticky business — but growth has clearly slowed and profit margins dipped this year.
Exponential Potential 3/10 (low). This is a mature, slow-and-steady company in a market that may be shrinking around it, not a fast grower.
The one big worry: if AI tools let clients drop or shrink their FactSet subscriptions, the whole "sticky, always-renews" story weakens. Nobody knows yet — that's exactly why it's a Watch.
Solid = price · dashed = 50-day average · dotted = 200-day average · amber = 52-week high/low. Price above both averages is an uptrend.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Blue crossing above amber (bars flip green) = momentum turning up; below (bars red) = turning down. Bar height = the size of that gap.
Relative performance vs S&P 500 & its sector (XLF (sector)), set to 100 a year ago
Solid = FDS · dashed = S&P 500 · dotted = XLF (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
Price$250.09
Market cap$9B
P/E trailing11×
P/E FY26E / FY27E14× / 13×
EV / Sales4.2×
EV / EBITDA11.3×
Gross margin51.4%
Net margin23.2%
Dividend yield1.78%
Beta0.715
52-wk range$190 – $450
RSI(14)58
50 / 200-DMA$231 / $251
12-mo return+-44% (SPY +21%)
Street target$254 ($210–$340)
Analyst grades2 Buy · 20 Hold · 7 Sell
FMP ratingB+
Next earnings2026-08-05
What the experts actually said 0 traceable claims on FDS · showing the highest-conviction voices
Every claim reconciles to a real claim_id in the Synthos knowledge base — this is the evidence the verdict is built on, not vibes. Management (the company itself) is shown but half-weighted; one cautionary voice is included on purpose.
1. What it is
FactSet Research Systems (NYSE: FDS) is a financial-data and analytics vendor founded in 1978 and headquartered in Norwalk, CT. It sells integrated data, analytics, and workflow software to the global investment community — portfolio managers, investment banks, asset and wealth managers, and increasingly corporates. The core economic engine is Annual Subscription Value (ASV): the forward-looking next-12-months revenue from all current subscriptions. Fiscal year ends August 31.
The business is almost entirely recurring, with annual ASV retention above 95% and client retention above 90% — the kind of subscription durability that historically earned FactSet a premium multiple. Its differentiation is breadth and integration of content plus deep workflow embedding (research, analytics, trading, wealth). The current strategic push is AI: management reports 90%+ of its Top 50 clients now use four or more FactSet AI products, and it has struck partnerships (Google Cloud, Finster AI, TIFIN.AI, plus an MCP server) to position FactSet as an "AI-ready" data layer — which is both the opportunity and the defense against the AI-disruption bear case.
Revenue mix (FY2025, from filings):
By segment (geographic operating segments): Americas $1,506M (65%) · EMEA $580M (25%) · Asia Pacific $235M (10%). Q3 FY26 organic ASV growth ran Americas +7.2%, EMEA +5.6%, APAC +10.0% — APAC fastest, Americas the mass.
By country (product/geo detail): United States $1,416M (61%) · Europe $349M · United Kingdom $231M. The base is US-heavy but genuinely global.
2. The expert thesis (traceable)
There is no expert coverage of FDS in the Synthos knowledge base.total_claims = 0, net_bullish_voices = 0. No investor or operator in our tracked panel has made a signed, traceable claim on FactSet.
That means this note carries zero borrowed conviction — there are no claim_ids to cite because none exist, and House Standard forbids inventing them. The verdict below is built entirely from fundamentals (FMP filings), analyst estimates, management's own guidance (half-weighted, §9), and quant/technical signals. Treat the absence of a bull panel as itself informative: this is not a name the smart-money voices we track are thumping the table on.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
Score
0–10
The read
Downside Risk(lower = safer)
5 · Moderate
Beta 0.72, net-debt/EBITDA 1.4×, 16× trailing (cheap vs its own ~30×+ history) argue safety — but a −44% 12-mo drawdown and an unresolved AI-disruption thesis argue the moat itself is being repriced. Net: middle.
Growth Quality
6 · Good
Elite recurring model — 95%+ ASV retention, 51% gross margin, 27% ROE, ~16% ROIC — but organic ASV growth has slowed to ~7% and FY26 margins are compressing (GAAP op margin 26.7% vs 33.2%). Quality of the base is high; the trajectory is softening.
Exponential Potential
3 · Low
~7% organic growth, decelerating, in a maturing terminal market where generative AI is a genuine secular threat. This is a mature compounder losing steam, not an accelerator.
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. The cases bound the range; the scores summarize them.
Case
Key assumptions
Fair value
Bull
AI turns out to be a tailwind not a threat — FactSet monetizes AI products, ASV growth re-accelerates toward high-single/low-double digits, margins recover. FY27E EPS ~$20 and the multiple re-rates to ~18× as the disruption fear fades.
~$352 (+41%)
Base(our anchor)
Growth stabilizes at ~6–7%, margins hold near current (adjusted) levels, AI is a wash. FY27E EPS ~$19.6 earns a ~14× multiple — a de-rated but fair price for a slowing, high-retention compounder.
~$274 (+10%)
Bear
AI erodes seat count / pricing power; ASV growth fades toward low-single digits and net retention slips below 95%. FY27E EPS stalls near ~$18 and the multiple compresses to ~11× as the market treats the terminal as a melting ice cube.
~$200 (−20%)
Synthos fair value = the base case, ~$274 (+10%), with the full $200–$352 span as the honest range. This sits essentially on top of the Street's $254 consensus (we are a touch more constructive on FY27 earnings power, but not much) and squarely inside a Buy/Hold/Sell split that already reads Hold. The wide range is the point: the AI question dominates, and it is not yet answerable from the data. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). FDS is a high-quality compounder that is decelerating — the opposite of an exponential:
Forward growth: revenue CAGR FY25→FY30E ~5.7% ($2.32B → $3.06B est); EPS CAGR ~11.7% ($15.74 → ~$27.39 est) — the gap is buybacks and modest margin, not unit acceleration.
Acceleration (the 2nd derivative) is negative: organic ASV growth has cooled from low-double-digits in prior years to ~7.1% (Q3 FY26). Revenue growth: +11.7% (FY23) → +5.7% (FY24→FY25) → ~6.4% GAAP (Q3 FY26). The inflection is down, not up. Per our flagship philosophy we hunt forward next-exponentials with positive acceleration — FDS is the wrong side of that test today.
Room to run: at ~$8.9B market cap FDS is small enough that size is not the cap on returns — but the constraint here is demand runway, not room. The addressable financial-data/terminal market is mature and arguably contracting in seat-terms as AI tools substitute for some workflows. Small cap + shrinking-ish TAM = low exponential score, for the opposite reason a megacap gets one.
Reinvestment runway: capex is light (~5% of revenue), FCF conversion is high (~85% of operating cash flow) — a cash machine, but one that returns cash (dividends + buybacks, $629M FYTD) rather than reinvesting into a new growth S-curve. That is a compounder's capital-return profile, not an exponential's reinvestment profile.
Exponential Potential: Low (3/10). Own FDS, if at all, for durable high-single-digit compounding + a fat, growing dividend — never for a fast multibagger. The honest read is that AI is more likely to be the story's ceiling than its next leg.
Revenue: FY25 (ended Aug 2025) $2.32B, +5.4% (FY24 $2.20B, +5.6% on FY23 $2.09B). Steady but clearly single-digit. Q3 FY26 (May 2026) revenue $622.9M, +6.4% YoY (+7.0% organic).
Quarterly trajectory: Q1 FY26 $607.6M → Q2 $611.0M → Q3 $622.9M — sequential growth is positive but gentle; ASV added just $35.4M in the latest three months.
Margins: gross 51.4% TTM, EBITDA margin 36.9% TTM, net 23.2% TTM. But watch the compression: Q3 FY26 GAAP operating margin fell to 26.7% from 33.2% a year earlier (higher comp, one-time charges, new-CEO comp). Adjusted operating margin 34.0% vs 36.8% — softer even excluding one-offs.
Earnings: FY25 net income $597M, EPS $15.74 (GAAP) / $15.55 diluted, up from $14.11 FY24. Q3 FY26 GAAP diluted EPS $3.50 (−9.6% YoY on the margin hit); adjusted diluted EPS $4.53, +6.1% — the adjusted line is still growing.
Balance sheet: total debt $1.56B, cash $338M, net debt ~$1.22B, net-debt/EBITDA ~1.4× — investment-grade (B+ letter rating), comfortably serviceable (interest coverage ~9×). Goodwill + intangibles are 75% of assets (from the 2022 CGS acquisition), so tangible book is negative — a bookkeeping artifact of an asset-light software roll-up, not a solvency flag.
6. Valuation — priced in or room?
For the first time in years, FDS is not expensive on its own history. Trailing P/E is 16.4× (vs a multi-year norm well north of 25–30×), EV/EBITDA 11.3×, EV/sales 4.2×, FCF yield ~8%, dividend yield ~1.8% with 27 straight years of increases. On forward estimates the multiple compresses further: ~14× FY26E, ~13× FY27E, ~9× FY30E if estimates hold.
The catch is why it's cheap: the de-rating from ~$450 to $250 is the market pricing AI-disruption risk and decelerating growth, not a temporary dislocation. A PEG lens is unflattering — ~16× trailing on ~6–7% organic growth is a PEG above 2, so "cheap vs history" and "cheap vs growth" disagree. Our base case applies a ~14× multiple to FY27E EPS (~$19.6) for ~$274 — modestly above spot, essentially in line with the Street's $254. Street targets (context): consensus $254, high $340, low $210, on a 2 Buy / 20 Hold / 7 Sell split. This is not a value trap nor a clear bargain — it is a fair price for a good business with a real, unquantified secular question mark. That ambiguity is the whole reason for a Watch rather than a Buy.
7. Technicals (from the tech block)
Trend:down. $250 sits at the 200-DMA ($251) and above the 50-DMA ($231) — a stock trying to base after a steep fall, not one in an uptrend. MACD +0.64 (mildly positive, consistent with a bounce off the lows).
Location:−44.4% off the 52-week high ($450), +31.6% off the 52-week low ($190). Max drawdown from peak −49.6% — the stock nearly halved. This is a repricing, not noise.
Momentum: RSI(14) 58 — neutral, neither oversold nor overbought; no technical urgency either way.
Relative strength (the tell): FDS −44.5% 12-mo vs SPY +20.6% and QQQ +30.3% — brutal underperformance of both the market and tech. Only in the last 3 months (+11.2% vs SPY +13.7%) has it roughly kept pace, hinting at a possible bottoming.
Read: technicals confirm the fundamental caution — a broken uptrend attempting to stabilize at the 200-DMA. There is no technical reason to rush; a decisive hold above the 200-DMA on improving ASV would be the entry signal a Watch is waiting for.
8. Moat & competitive position
FactSet's moat is workflow lock-in on top of integrated data: once a research or portfolio team builds its process around FactSet's terminal, APIs, and models, switching is painful — which is why ASV retention runs above 95%. Add high gross margins (51%), 27% ROE, and a 27-year dividend-growth streak, and you have a textbook sticky-subscription compounder.
The competitive frame is a data-terminal oligopoly: Bloomberg (private, the 800-lb gorilla), S&P Global Market Intelligence, LSEG/Refinitiv, Morningstar, and Moody's/MSCI in adjacent analytics. FactSet is the nimble, buy-side/wealth-tilted challenger. The secular threat is new: generative AI could let clients extract, summarize, and analyze data without a full FactSet seat — compressing seat counts or pricing. Management's answer (embed AI into FactSet, become the "AI-ready" data layer, MCP server, cloud partnerships) is credible but unproven, and the −44% drawdown says the market is not yet convinced.
Peer set (FMP's list — a rough financials-sector basket, not pure comps): Morningstar $6.3B (the closest true comp — data/analytics), SEI Investments $11.0B, Jefferies $10.8B, Invesco $12.0B, Comerica $11.3B, Assurant $13.8B, American Financial $11.9B, Old Republic $10.2B, XP $8.5B, Grupo Galicia $8.1B. Note: this basket is mostly banks/insurers/asset managers — the informative comps for FDS are Bloomberg (private), S&P Global, LSEG, and Morningstar, which FMP does not list here.
9. Management, capital allocation & guidance
Leadership transition: FactSet is under a new CEO, Sanoke Viswanathan (ex-JPMorgan), and a new CFO, Joshua Warren (ex-Envestnet CFO, prior BlackRock), appointed April 2026. New-management investment (compensation, technology) is a direct cause of the FY26 margin compression — a "spend to defend/transform" phase that could pay off or drag. Worth watching closely.
Capital allocation: shareholder-return-led — $629M returned FYTD (buybacks + dividends), $203M of buybacks in Q3 FY26 alone at ~$219/share, 27 consecutive years of dividend increases (quarterly dividend raised to $1.16). Net-debt/EBITDA ~1.4×, well-managed. This is a mature cash-return profile, not a reinvestment-for-growth one.
Insider activity: the only recent transactions are the new CFO's onboarding equity awards (May 2026) and routine controller in-kind tax withholdings — no informative discretionary buying or selling in the sampled window.
Management's own guidance (half-weighted — they talk their book): the SEC 8-K earnings release (filed 2026-07-01, Q3 FY26) reads like a real earnings release and reaffirmed FY26 guidance: organic ASV growth $130–160M, GAAP revenue $2,450–2,470M, GAAP operating margin 29.5–31.0%, adjusted operating margin 34.0–35.5%, GAAP diluted EPS $14.85–15.35, adjusted diluted EPS $17.25–17.75. Management framed the quarter as "continued ASV acceleration" and leaned hard on AI adoption (90%+ of Top 50 clients on 4+ AI products). Taken at half-weight: guidance is intact and cash-rich, but the margin range implies the FY26 compression is real and management-chosen, not a one-quarter blip.
10. Catalysts & what to watch
Next earnings: 2026-09-17 (Q4 FY26; Street EPS $4.34, revenue ~$629M). The key lines: organic ASV growth (does it hold ~7% or slip?) and operating margin (does the compression stabilize?).
AI adoption vs erosion: the single biggest swing factor — evidence that AI products add ASV (bull) vs signs of seat/pricing erosion (bear).
Margin trajectory under new management: whether the FY26 investment phase reverses into margin recovery in FY27, or becomes a permanently lower plateau.
Net ASV retention: any slip below 95% would be a thesis-breaker for the sticky-subscription case.
New CEO's strategy: first full-year strategic framing from Viswanathan — capital allocation, M&A appetite, AI roadmap.
Thesis tripwires (what would change the call): organic ASV growth decelerating below ~5%; net retention below 95%; adjusted operating margin sustained below ~33%; or evidence of AI-driven seat cancellations. Any two together would push this from Watch toward Avoid; clear AI-monetization proof + re-accelerating ASV would push it toward Buy.
11. Key risks
AI disruption (structural, and the dominant risk): generative AI could commoditize data extraction/analysis and compress FactSet's seat count and pricing power. This is what the −44% drawdown is pricing, and it is genuinely unresolved.
Growth deceleration: organic ASV at ~7% and slowing; the premium multiple that FactSet enjoyed for a decade is gone precisely because the growth that justified it faded.
Margin compression: FY26 GAAP operating margin fell ~650bps YoY on new-management comp and tech spend; if this is a plateau rather than an investment blip, EPS estimates are at risk.
Execution/transition risk: a brand-new CEO and CFO simultaneously — leadership continuity risk at a pivotal strategic moment.
Competitive: Bloomberg's entrenched dominance plus S&P Global/LSEG scale; FactSet is the smaller player defending share in a consolidating, AI-disrupted market.
No expert corroboration: unlike our conviction names, there is zero KB coverage — no tracked smart-money voice is validating a bull case here, which is itself a caution.
12. Verdict, position sizing & monitoring
Watch. FactSet is a genuinely high-quality, high-retention, cash-generative subscription business trading at a fair-but-not-cheap ~16× after a brutal −44% year. The problem is not the balance sheet or the cash flow — both are excellent — it is that the two things that broke the stock (decelerating ~7% growth and the AI-disruption question) are exactly the two things the data cannot yet resolve. With no expert conviction in our KB to lean on, a Street that reads Hold (2 Buy / 20 Hold / 7 Sell), and a base-case fair value (~$274) only ~10% above spot, this does not clear the bar for a Buy — but the quality and the reset valuation keep it well clear of Avoid.
Sizing:Watch-list only — no position today. The asymmetry isn't there yet: ~+10% base upside against a live, unquantified secular threat. Revisit on either a lower price (toward the ~$200 bear, where the AI risk is better paid for) or hard evidence the moat and ASV growth are holding.
Monitoring: re-underwrite on the §10 tripwires; formal re-score at the 2026-09-17 print (ASV growth + margin are the two numbers that matter). This verdict is logged as a tracked Synthos call as of 2026-07-03 at $250.09.
Single biggest risk: generative AI eroding the data-terminal moat — the overhang the market is already pricing and the data can't yet clear.
Provenance & disclosures
Traceability:0 KB claims, breadth 0 — FactSet has no expert coverage in the Synthos knowledge base. This note is fundamentals- and quant-driven; no claim_ids are cited because none exist, and fabricating conviction is structurally prohibited by House Standard.
Data as-of: fundamentals 2026-05-31 (Q3 FY26) · estimates & prices 2026-07-02/03 · management guidance from the SEC 8-K earnings release filed 2026-07-01. Forward figures are analyst consensus (FMP) or management guidance, labeled as estimates.
Management caveat: FactSet's own FY26 guidance is management's self-interested book, half-weighted by design (§9).
Peer caveat: the FMP peer basket is a generic financials list; the informative comps (Bloomberg, S&P Global, LSEG, Morningstar) are noted in §8.
Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").