FactSet (FDS) Stock Drops Even After Strong Quarterly Performance

FactSet's Earnings Report: FactSet Research Systems Inc. reported first quarter fiscal 2026 earnings with adjusted EPS of $4.51, surpassing analyst expectations, and revenues of $607.6 million, reflecting a year-over-year growth of 6.9%.

Stock Decline Despite Positive Results: Despite the earnings beat, FactSet's shares fell 6.02% to $278.29 due to investor concerns over margin compression and a slowdown in demand, leading to a significant year-to-date decline of 41.85%.

Margin Compression Factors: The decline in operating margins was attributed to higher costs related to employee compensation, technology, and third-party content, with GAAP operating margin dropping to 31.6% from 33.6% in the previous year.

Market Outlook and Guidance: FactSet reaffirmed its fiscal 2026 guidance, projecting organic ASV growth and adjusted EPS, but investor caution remains due to competitive pressures and shifts in AI investment narratives affecting financial data providers.