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The Market Is Still Overvaluing FactSet

Despite slowing growth, margin contraction, and headwinds from weaker buy-side customer demand, the market continues to award FactSet with a higher multiple.

Wide-moat

Despite slowing growth, margin contraction, and headwinds from weaker buy-side customer demand, the market continues to award FactSet with a higher multiple. Not since the middle of 2001 has the company achieved such respect from the market. Owners of shares in FactSet will need to ignore the fact that in 2001 FactSet’s revenue grew by nearly 25% and diluted GAAP earnings per share grew by 28%. In comparison to this year, organic revenue expanded by 5.6% and diluted GAAP diluted earnings per share grew by only 4.1%.

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About the Author

Colin Plunkett

Equity Analyst
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Colin Plunkett, CFA, is an equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers banks and financial technology firms.

Before joining Morningstar in 2016, Plunkett was an equity research analyst for First Trust Portfolios. Previously, he worked in operations for Northern Trust and as a financial advisor for Merrill Lynch.

Plunkett holds a bachelor’s degree in business administration from Marquette University and a master’s degree in international accounting and finance from Cass Business School. He also holds the Chartered Financial Analyst® designation.

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