Investment Thesis
FactSet demonstrates solid financial health with strong profitability metrics (31.6% operating margin, 25.1% net margin) and consistent revenue growth of 5.4% YoY despite flat net income. The company maintains healthy liquidity (1.54x current ratio), reasonable leverage (0.63x debt/equity), and strong interest coverage (14.4x), though ROE of 7.0% suggests capital efficiency could improve.
Strengths
- Exceptional operating margin of 31.6% indicates strong operational efficiency and pricing power
- Robust interest coverage ratio of 14.4x demonstrates comfortable debt servicing capability
- Healthy free cash flow generation of 90.4M (14.9% FCF margin) with FCF exceeding net income
- Solid balance sheet with debt/equity of 0.63x and current ratio of 1.54x providing financial flexibility
- Consistent revenue growth of 5.4% YoY in a stable data/software services sector
Risks
- Flat net income YoY (0.0% growth) despite 5.4% revenue growth indicates margin compression or cost headwinds
- Low ROE of 7.0% suggests inefficient capital deployment relative to equity base
- Low ROA of 3.0% indicates asset-heavy business model or underutilized assets
- Significant long-term debt of 1.4B requires ongoing cash generation to service and reduce leverage
- 13 Form 4 insider filings in 90 days warrants monitoring for potential insider concerns
Key Metrics to Watch
- Net income growth trajectory - critical to understand if flat YoY was temporary or structural
- Operating margin sustainability - ensure the 31.6% level is maintained amid competitive pressures
- Free cash flow conversion and dividend/debt paydown allocation
- Revenue growth acceleration - 5.4% YoY growth should accelerate given the business model
- ROE and ROA improvement - leverage excess cash to improve capital efficiency
Financial Metrics
Revenue
607.6M
Net Income
152.6M
EPS (Diluted)
$4.06
Free Cash Flow
90.4M
Total Assets
4.2B
Cash
275.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
31.6%
Net Margin
25.1%
ROE
7.0%
ROA
3.6%
FCF Margin
14.9%
Balance Sheet & Liquidity
Current Ratio
1.54x
Quick Ratio
1.54x
Debt/Equity
0.63x
Debt/Assets
48.6%
Interest Coverage
14.37x
Long-term Debt
1.4B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-24T20:04:11.526589 |
Data as of: 2025-11-30 |
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