Will FactSet Research (FDS) Beat Q4 Earnings Estimates?

We expect FactSet Research Systems Inc. (NYSE:FDS) to beat expectations when it reports fourth-quarter fiscal 2017 results on Sep 26. In the last quarter, the company delivered a positive earnings surprise of 0.54%.

Let’s see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that FactSet Research is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate ($1.90 per share) and the Zacks Consensus Estimate ($1.89 per share), is pegged at +0.43%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank #3 (Hold):Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of FactSet Research’s Zacks Rank #3 and +0.43% ESP makes us reasonably confident about an earnings beat in the to-be-reported quarter.

FactSet Research Systems Inc. Price and EPS Surprise

What is Driving Better-Than-Expected Earnings?

The company is consistent with product innovation across segments with special emphasis on financial services to gain customers. Moreover, the company’s acquisitions of Portware, Revere Data, Matrix Data, Code Red and BISAM Technologies S.A will enhance product suite and aid it to evolve as a global financial database company. It will also help FactSet to maximize value for partners and provide exclusive content set.

FactSet has a high client retention ratio which is another positive. The share repurchase program is anticipated to support earnings in the long run apart from boosting shareholder value.

Furthermore, the company is one of the leading providers of online integrated data-related products and services for the investment community. According to ReportsnReports, the Global Business Information market is expected to witness a CAGR of 5.15% from 2014 to 2019. FactSet, being one of the key data providers, is expected to gain a competitive edge through its technological know-how and increasing share in new markets.

Overall, we expect to witness an earnings beat from FactSet Research this time around.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Accenture PLC (NYSE:ACN) with an Earnings ESP of +0.13% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.

Thor Industries, Inc. (NYSE:THO) with an Earnings ESP of +2.80% and a Zacks Rank #2.

Paychex, Inc. (NASDAQ:PAYX) with an Earnings ESP of +0.06% and a Zacks Rank #2.

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