FDS - Embedded Expectations Analysis - 2020 05 27
FactSet Research Systems Inc. (FDS:USA) trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 28.5x Uniform P/E, implying bullish expectations for the firm. However, management may have concerns about margin pressures, organic ASV growth, and client retentionSpecifically, management may lack confidence in their ability to sustain organic ASV and professional services growth, maintain client retention rates, and execute new business initiatives. Moreover, they may have concerns about margin declines due to cost of sales and exchange rates, the potential of banks cancelling their subscriptions, and ongoing headwinds in their APAC operations. Furthermore, they may be exaggerating the quality of their web-based product, and they may lack confidence in their ability to maintain coverage expansion, assist clients in accessing FactSet remotely, and execute their business continuity plans
FactSet Research Systems is a provider of integrated financial information, analytical applications and other services for the investment and corporate communities. The company's data and technology solutions can be implemented across the investment portfolio lifecycle or as standalone components. The company is focused on its three segments: United States, Europe, and Asia Pacific. The company delivers insight and information through the workflow solutions of Research, Analytics and Trading, Content and Technology Solutions, and Wealth. The company provides insights on global market trends and knowledge on companies and industries, as well as capabilities to monitor portfolio risk and performance and to execute trades.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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