FactSet Research Systems Inc. (NYSE:FDS) is set to report fiscal third-quarter 2016 results on Jun 28, 2016. Last quarter, the company posted a positive earnings surprise of 4.6%. Let us see how things are shaping up for this announcement.
Factors to Consider
FactSet reported mixed second-quarter fiscal 2016 results. Nonetheless, year-over-year comparisons were favorable on both the counts. Moreover, the company has a high client retention ratio, which is a positive. Also, ASV increased year over year and the company added a good number of clients.
The share repurchase program is expected to support earnings in the long run apart from boosting shareholders’ value.
The company continues with product innovation across its segments with special emphasis on financial services to gain more customers. Moreover, the company’s acquisitions of Portware, Revere Data, Matrix Data and Code Red will enhance its product suite and help it to evolve as a global financial database company. It will also help FactSet to maximize value for its partners and provide exclusive content set.
Nonetheless, competition from Bloomberg L.P., Dow Jones & Company Inc., MSCI Inc. (NYSE:MSCI) and Thomson Reuters, which are also introducing substitute products at competitive prices, is a headwind.
Earnings Whispers?
Our proven model does not conclusively show that FactSet Research is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at $1.63. Thus, the ESP is 0.00%.
Zacks Rank: FactSet Research Systems has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some companies with a positive ESP and a favorable Zacks Rank that you may want to consider:
Synergy Resources Corporation (NYSE:SYRG) with Earnings ESP of +50.00% and a Zacks Rank #2 (Buy)
Worthington Industries, Inc. (NYSE:WOR) with Earnings ESP of +9.52% and a Zacks Rank #2
FACTSET RESH (FDS): Free Stock Analysis Report
MSCI INC-A (MSCI): Free Stock Analysis Report
WORTHINGTON IND (WOR): Free Stock Analysis Report
SYNERGY RES CP (SYRG): Free Stock Analysis Report
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