FactSet Posts a Healthy Fiscal Third Quarter, but Shares Still Pricey

FactSet reported strong fiscal third-quarter financial results. Revenue of $489 million beat the FactSet consensus of $479 million and represented organic revenue growth of 10.5%, an acceleration from the 9.9% seen in the prior quarter. Adjusted EPS of $3.76 easily beat the FactSet consensus of $3.22, though some of this might be consensus not reflecting the outsized margin improvement from its recent acquisition of CUSIP Global Services and a lower tax rate. Though FactSet is performing well, we previously increased our forecasts, and this quarter’s results do not materially change our long-term view of the narrow-moat firm. As a result, we will maintain our fair value estimate of $340 per share and regard the firm’s shares as modestly overvalued.