FDS

FactSet is a high-quality, recurring-revenue franchise disguised, at today's price, as a value stock. The 10-K frames the business as a subscription platform serving ~9,000 clients and over 237,000 investment professionals, with revenue recognized over-time as clients consume daily access to the Hosted and Identifier (CGS) platforms — the definition of sticky, visible, deferred-revenue-backed sales. That durability shows in the numbers: five straight years of revenue growth ($1.59B in FY2021 to $2.32B in FY2025), a 32.2% operating margin (up from 31.8% as prior-year Sales Tax Dispute charges rolled off), a 25.7% net margin, and a 27.3% ROE. Net income grew 11.2% and diluted EPS 11.8% — faster than the 5.4% top line — helped by buybacks that shrank the share count 1.4%.

The valuation is what makes this a buy rather than a hold. At $245.55 the stock trades at 15.8x FY diluted EPS of $15.55 and 4.0x sales — a multiple that discounts a business barely growing, yet FDS is compounding earnings at double digits with best-in-class returns on capital. Against ~12% EPS growth, that is a growth-adjusted multiple comfortably below 1.5x, cheap for a franchise with this margin structure and pricing power. Today's +6.7% move (alongside the fresh 10-Q) suggests the market is beginning to re-rate, but there is meaningful room if the multiple normalizes toward the low-20s that a subscription compounder of this quality can support — hence a ~$300 target, roughly 19x earnings, still undemanding.