FactSet Research Systems (FDS) has quietly outperformed the market over the past month, even as the stock remains sharply lower this year, inviting a closer look at what investors might be pricing in.

The recent bounce, including an 11.29% 1 month share price return off a deep year to date slide of 39.01 percent, suggests sentiment is stabilising even though the 1 year total shareholder return remains sharply negative.

If this shift in momentum has you reassessing your watchlist, it could be a good moment to discover high growth tech and AI stocks that sit at the intersection of finance and technology.

With earnings still growing and the share price lagging, investors now face a crucial question: is FactSet trading at a meaningful discount to its fundamentals, or is the market already pricing in its next leg of growth?

Most Popular Narrative: 13.5% Undervalued

With FactSet shares last closing at $290.63 against a narrative fair value of $335.94, the valuation case leans positive and hinges on execution.

FactSet is integrating new acquisitions like Irwin and LiquidityBook, adding immediate cross-sell opportunities and expanding services across buy-side and banking workflows, which will support revenue growth. The launch of new GenAI products, including Pitch Creator and conversational API, is expected to provide additional services that drive adoption and increase ASV growth, positively impacting future revenue.

Curious how steady mid single digit revenue growth, rising margins and a richer earnings multiple all fit together into that upside case? Dig into the full narrative to see the specific assumptions driving this fair value view.

Result: Fair Value of $335.94 (UNDERVALUED)

However, slowing price increases and rising technology expenses could constrain revenue growth and margins, challenging the optimistic earnings and valuation assumptions embedded in this narrative.

Another Angle on Valuation

On earnings, the picture is less forgiving. FactSet trades at 17.5 times earnings versus a fair ratio of 14.1 times, even as the US capital markets group averages 24 times. That premium to its own fundamentals hints at valuation risk if growth disappoints from here.

Build Your Own FactSet Research Systems Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a customised view in just minutes, Do it your way.

A great starting point for your FactSet Research Systems research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Ready for your next investing move?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.