FactSet Research Systems Inc.
) is set to report fiscal third-quarter 2014 results on Jun 17,
2014. Last quarter, it posted in-line earnings. Let us see how
things are shaping up for this announcement.
Factors this Past Quarter
FactSet delivered modest second-quarter results. While the bottom
line matched the Zacks Consensus Estimate, the top line lagged the
same. Nonetheless, the year-over-year comparisons were favorable.
Moreover, the company has a high client retention ratio of 92%,
which is a positive catalyst. Also, FactSet has been witnessing
growth in its Annual Subscription Value (ASV), driven by new client
wins. We believe that the improvements in the financial sector will
positively impact the company, going forward. Additionally, the
fresh buyback program will support its earnings per share.
FactSet continues to launch products and applications across its
segments with special emphasis on financial services to gain more
customers. Moreover, the company's acquisition of Revere Data and
Matrix Data will help it to deliver innovative products to its
clients and evolve as a global financial database company. It will
also help FactSet to maximize value for its partners and provide
customers with exclusive content sets.
Nonetheless, competition from Bloomberg L.P., Dow Jones &
Company Inc., MSCI Inc. and Thomson Reuters, which are also coming
up with substitute products at competitive prices, is a headwind
for the company.
Our proven model does not conclusively show that FactSet Research
Systems is likely to beat earnings estimates this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. This is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
currently stand at $1.26. Thus, the ESP is 0.00%.
FactSet Research Systems has a Zacks Rank #2 (Buy) which when
combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing a 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:
Micron Technology Inc.
) with Earnings ESP of +8.70% and a Zacks Rank #1 (Strong Buy)
) with Earnings ESP of +0.72% and a Zacks Rank #2
) with Earnings ESP of +0.72% and a Zacks Rank #3 (Hold)
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