What Happened?
Shares of financial data provider FactSet (NYSE: FDS) fell 3.4% in the morning session after the company reported fourth-quarter earnings that missed analyst expectations and provided a disappointing forecast for fiscal year 2026.
The financial data firm posted fourth-quarter adjusted earnings of $4.05 per share, which fell short of the consensus estimate of $4.15. Looking ahead, the company's outlook also concerned investors. FactSet projected its adjusted earnings for fiscal 2026 to land between $16.90 and $17.60 per share, notably weaker than the Wall Street consensus of $18.30. Analysts reacted to the news with caution.
BMO Capital pointed to a miss on profit margins, driven by higher technology expenses and increased bonus payments, as it cut its price target on the stock. Barclays also trimmed its price target significantly, from $390 down to $300, while keeping its "Underweight" rating.
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What Is The Market Telling Us
FactSet’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 4.1% on the news that the company reported third-quarter earnings that missed analyst estimates and provided a disappointing profit forecast for the next fiscal year. The financial data firm disclosed adjusted earnings of $4.05 per share, which fell short of Wall Street's expectation of $4.13 per share. While revenue for the quarter edged past forecasts at $596.9 million, investors focused on the weaker profit outlook. For fiscal 2026, FactSet guided for adjusted earnings between $16.90 and $17.60 per share, with the midpoint falling below the average analyst projection of $18.27 per share. The market's negative reaction suggests the earnings miss and downbeat guidance overshadowed the slight revenue beat.
FactSet is down 38.8% since the beginning of the year, and at $291.84 per share, it is trading 41.1% below its 52-week high of $495.72 from November 2024. Investors who bought $1,000 worth of FactSet’s shares 5 years ago would now be looking at an investment worth $866.41.
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