Will FactSet Research (FDS) Surprise This Earnings Season? - Analyst Blog

FactSet Research Systems Inc. FDS is set to report fiscal first-quarter 2014 results on Dec 17, 2013. Last quarter, it posted a negative earnings surprise of 2.52%. Let us see how things are shaping up for this announcement.

Factors this Past Quarter

FactSet is one of the leading providers of online integrated data-related products and services for the investment community (primarily bankers, investment managers and brokerage firms). 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 will help it to deliver innovative products 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. MSCI and Thomson Reuters, which are also coming up with substitute products at competitive prices, is a headwind for the company.

Earnings Whispers?

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 Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate currently stand at $1.23. Thus, the ESP is 0.00%.

Zacks Rank #2 (Buy): FactSet Research Systems carries a Zacks Rank #2 but a positive ESP would have made us confident about an earnings beat.

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 you may want to consider as our model shows that they have the right combination of elements to post an earnings beat in the imminent future:

Winnebago Industries Inc. WGO, with Earnings ESP of +10.26% and a Zacks Rank #1 (Strong Buy).

Apogee Enterprises Inc. APOG, with Earnings ESP of +3.03% and a Zacks Rank #2 (Buy).