What Happened?
Shares of financial data provider FactSet (NYSE: FDS) fell 4.1% in the morning session after the company reported third-quarter earnings that missed analyst estimates and provided a disappointing profit forecast for the next fiscal year.
The financial data firm disclosed adjusted earnings of $4.05 per share, which fell short of Wall Street's expectation of $4.13 per share. While revenue for the quarter edged past forecasts at $596.9 million, investors focused on the weaker profit outlook. For fiscal 2026, FactSet guided for adjusted earnings between $16.90 and $17.60 per share, with the midpoint falling below the average analyst projection of $18.27 per share. The market's negative reaction suggests the earnings miss and downbeat guidance overshadowed the slight revenue beat.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy FactSet? Access our full analysis report here, it’s free.
What Is The Market Telling Us
FactSet’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago when the stock dropped 3.1% on the news that markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell.
The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.
FactSet is down 33.4% since the beginning of the year, and at $317.36 per share, it is trading 36% below its 52-week high of $495.72 from November 2024. Investors who bought $1,000 worth of FactSet’s shares 5 years ago would now be looking at an investment worth $943.39.
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