To The Moon

$FactSet Research(FDS)$ is set to report its fiscal Q4 2025 earnings before the market open on Thursday, September 18, 2025.

Earnings Per Share (EPS) and Revenue: The consensus analyst estimates are for an EPS of around $4.15 and revenue of approximately $593.4 million. A significant beat or miss on these top-line numbers will likely be the primary driver of the stock's immediate post-earnings movement.

Here is a breakdown of what investors should watch and potential short-term trading opportunities.

Based on FactSet Research Systems (FDS) fiscal Q3 2025 earnings reported on June 23, 2025, the company delivered a mixed performance, demonstrating top-line strength but continued pressure on profitability.

Q3 2025 Earnings Summary

Revenue Beat: FactSet reported revenue of $585.5 million, a 5.9% year-over-year increase, which surpassed analyst expectations. This growth was driven by a healthy 4.4% organic revenue increase, particularly from its wealth and institutional buy-side clients.

Earnings Miss: While revenue was strong, adjusted diluted EPS of $4.27 fell slightly short of analyst forecasts and represented a 2.3% decrease from the prior year. This decline was attributed to higher operating expenses.

Margin Pressure: Both GAAP and adjusted operating margins decreased significantly, by 350 and 270 basis points, respectively. The company cited a prior-year lower bonus accrual, a one-time payroll tax adjustment, and higher base salaries from recent acquisitions as key reasons for the margin contraction.

Annual Subscription Value (ASV): A crucial metric for a subscription business, organic ASV grew 4.5% year-over-year, reaching $2.30 billion. The company also announced the appointment of a new CEO, Sanoke Viswanathan, effective in September 2025.

Lesson Learned from Guidance

FactSet's management reaffirmed its fiscal year 2025 guidance. The key lesson here is that even in the face of profitability challenges, the company's business model is fundamentally sound and resilient. The reaffirmation of guidance, which anticipates a strong Q4, suggests several things:

Focus on Top-Line Growth: The company's priority is on expanding its customer base and increasing its Annual Subscription Value, a strategy that appears to be working.

Margin Re-evaluation: While margins were pressured in Q3, the guidance implies that management has a clear plan to navigate and improve profitability in the future, even if it requires a period of investment.

Management Confidence: Reaffirming guidance despite the Q3 earnings miss signals that the company's leadership is confident in its ability to meet its full-year targets.

In essence, the Q3 report was a "growth over profitability" story. The market reaction, which saw the stock rise in pre-market trading, indicates that investors were more focused on the strong revenue and ASV growth than the temporary margin pressures. The guidance provided a road map for investors, signaling that FactSet's long-term growth story remains intact, even with a new CEO at the helm.

Key Metrics to Watch

Annual Subscription Value (ASV): As a subscription-based business, this is a critical metric. Analysts are expecting total ASV to reach approximately $2.40 billion, up from $2.28 billion in the same quarter last year. Growth in ASV from different client segments (buy-side vs. sell-side) and geographic regions (U.S., EMEA, Asia Pacific) will provide insight into the company's core business health and its ability to attract and retain clients in a competitive market.

ASV Retention Rate: FactSet's ability to retain its customers is a key indicator of its "sticky" business model. The company's recent retention rate has been strong, above 95%, and any changes to this number could significantly impact investor sentiment.

Guidance for Fiscal Year 2026: Beyond the Q4 results, the most crucial factor for a stock's future performance is its forward-looking guidance. Investors will be paying close attention to management's outlook for fiscal year 2026 revenue and EPS. A conservative or bullish forecast will be a major determinant of the stock's direction.

Operating and Net Margins: Margins indicate the company's profitability and cost management. While FactSet's recent operating and net margins have faced pressure from higher operating expenses, investors will be watching to see if the company can demonstrate improved efficiency and a return to margin expansion.

AI and Product Integration: FactSet has been actively expanding its data offerings and integrating AI into its platform. Any updates on these initiatives and their impact on client adoption and future growth will be a focus of the earnings call.

FactSet Research (FDS) Price Target

Based on 16 analysts from Tiger Brokers offering 12 month price targets for Factset Research in the last 3 months. The average price target is $425.51 with a high forecast of $500.00 and a low forecast of $355.00. The average price target represents a 23.27% change from the last price of $345.19.

Potential Short-Term Trading Opportunities

Positive Surprise (Beat): If FactSet reports an EPS and/or revenue beat, especially if accompanied by strong ASV growth and positive forward guidance, the stock could see a significant short-term rally. This could create an opportunity for a momentum trade.

Negative Surprise (Miss): A miss on key metrics, particularly ASV, or a weak outlook for the upcoming fiscal year, could lead to a sharp sell-off. This could present a short-term shorting opportunity.

Options Trading: Given the binary nature of earnings reports, the options market can offer ways to capitalize on the expected volatility. Traders could consider buying calls if they anticipate a strong report, or puts if they expect a negative one. Straddles or strangles could also be used to profit from a large move in either direction, but these strategies are highly dependent on implied volatility.

Technical Analysis - Exponential Moving Average (EMA)

FDS share price have experienced a significant decline with a long period of negative momentum, though we saw revenue beat in Q3, but the earnings miss seem to take a toil on the share price.

I think we need to watch out for FDS priority is on expanding its customer base and increasing its Annual Subscription Value, a strategy that appears to be working. This will also bring us to see how FDS management would re-evaluating its margin, as if FDS can gather an earnings beat in terms of margin, we could see a recovery, or price surge.

Summary

FactSet Research Systems (FDS) is set to report its fiscal Q4 2025 earnings, with key investor attention on its ability to sustain growth while managing profitability. Analysts anticipate an EPS of around $4.15 and revenue of approximately $593.4 million. A primary metric to watch is the Annual Subscription Value (ASV), which is expected to grow to about $2.40 billion, indicating the health of its subscription-based business model.

Investors should pay close attention to management's guidance for fiscal year 2026, as this will provide a clearer picture of the company's future trajectory. While the company has shown consistent top-line growth, recent quarters have seen margin pressure due to increased operating expenses. The earnings call will be crucial for understanding management's plan to balance growth investments with profitability. A positive surprise on key metrics and an optimistic outlook could drive a short-term stock rally, while a miss or conservative guidance could lead to a sell-off.

Appreciate if you could share your thoughts in the comment section whether you think FDS could provide an earnings beat with a strong growth in its customer base.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.