Factset Research Systems Inc (FDS) Valuation

The current price of $193.88 is 39% below the GoodMoat target of $318.59. According to the GoodMoat framework, a margin of safety (MoS) above 40% is considered deeply undervalued, while 20–40% is favourable. At 39%, FactSet sits at the very top of the favourable band, indicating a substantial discount to the estimated intrinsic value. This provides a strong buffer for a value investor. The stock's P/E of 12.1 is a key point of attraction. It is significantly below the sector average for financial services and likely well below FactSet's own historical average, suggesting the market may be undervaluing its earnings power. This low multiple is juxtaposed against high-quality financials, including a 27.4% ROE, a 32.2% operating margin, and a robust 8.5% free cash flow yield. The valuation metrics, particularly the low P/E and high FCF yield, appear disconnected from the company's demonstrated profitability and stable revenue growth of 6.8% YoY. For a value investor, this scenario—a high-quality, profitable business trading at a decade-low multiple with a large margin of safety—is a compelling starting point for deeper analysis into its moat and competitive durability. Analysis based on data as of 2024-05-15.