NEW YORK (TheStreet) -- Shares of FactSet Research Systems (FDS) - Get FactSet Research Systems Inc. Report are lower by 2.93% to $123.04 after Piper Jaffray (PJC) - Get Piper Jaffray Companies Report downgraded the financial data and software company to "neutral" from "overweight" with a price target of $130, down from their previous target of $134.
The price objective indicates a potential upside of 2.56% from the stock's previous close.
TheStreet Ratings team rates FACTSET RESEARCH SYSTEMS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACTSET RESEARCH SYSTEMS INC (FDS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.8%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FDS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FDS has a quick ratio of 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, FACTSET RESEARCH SYSTEMS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- FACTSET RESEARCH SYSTEMS INC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FACTSET RESEARCH SYSTEMS INC increased its bottom line by earning $4.47 versus $4.14 in the prior year. This year, the market expects an improvement in earnings ($4.92 versus $4.47).
- You can view the full analysis from the report here: FDS Ratings Report
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