FDS

FactSet ($FDS) CLO Makes First Purchase in 15 Months...Stark Contrast to CEO's Continued Selling

09/25/2025 20:25

FactSet Research Systems ($FDS) has caught investors' attention as a senior executive made the company's first insider stock purchase in 15 months. On September 23, Chief Legal Officer Christopher McLoughlin purchased 337.62 shares at $296.92 per share, according to SEC filings. This stands in stark contrast to the pattern established by CEO Frederick Snow, who has been systematically selling 3,000 shares monthly since June 2024. The CEO has completed 15 separate transactions totaling 45,000 shares, cashing out approximately $20.5 million. Against this backdrop, another senior executive using personal funds to buy shares sends a powerful signal about internal assessment of the current stock valuation. FactSet, founded in 1978, is a leading global provider of financial data and analytics solutions serving asset managers, investment banks, hedge funds, and other financial institutions worldwide through subscription-based services. With approximately 9,000 clients and over 230,000 users, the company has built a stable revenue base with $2.4 billion in Annual Subscription Value (ASV). Key competitors include Bloomberg and Refinitiv (formerly Thomson Reuters Financial), and FactSet maintains a solid market position in the financial information services industry. The stock has plummeted approximately 31% from its November 2024 peak of $490. This sharp decline stems primarily from market turbulence triggered by the Trump administration's aggressive tariff policies since early 2025 and broader tech sector weakness. The U.S. stock market lost $4 trillion in value from its February peak, particularly impacting B2B technology service companies like FactSet that depend on corporate clients. However, the financial fundamentals remain robust. The most recent quarterly results showed revenue of $597 million (up 6.2% year-over-year), beating analyst expectations, with healthy ASV growth continuing. The company maintains strong profitability with earnings per share of $15.54 and an operating margin of 29.71%. The subscription-based business model provides high revenue predictability and low customer churn rates. Wall Street analysts remain divided on the stock. In March, Jefferies slashed its price target from $486 to $315 citing demand slowdown. However, UBS upgraded the stock from neutral to buy in September, arguing it was "excessively undervalued due to AI disruption concerns." Currently, among 21 brokerages, 3 rate it buy, 12 hold, and 6 sell, with a median price target of $470. Particularly noteworthy is Raymond James' August analysis suggesting "increased likelihood of becoming a buyout target due to stock price decline." FactSet's stable subscription revenue structure, high profitability, and current undervalued metrics could appeal to strategic investors. The P/E ratio of 18.3x is considerably below historical averages, while the $10.7 billion market cap falls within acquisition range for large tech companies or private equity firms. Investors should note positive signals including continued growth in subscriber and user counts. Total clients reached 8,996, exceeding estimates, while users surpassed 230,000. This indicates FactSet's services remain essential tools in the financial industry despite economic headwinds. International markets, particularly Asia-Pacific, also show solid growth momentum. Conversely, key risk factors include potential continued client spending reduction. Financial firms under cost-cutting pressure may delay subscription renewals or reduce user counts. Additionally, AI technology advancement could automate some analytical functions, potentially changing long-term demand structures. Bloomberg's continued market dominance also remains a competitive threat. The critical observation point now is whether the CLO's purchase represents an isolated transaction or signals additional executive buying. If other executives follow suit, it would strongly indicate internal confidence in stock price bottoming. Upcoming quarterly results will require close monitoring of customer churn rates and new contract activity. From an investment strategy perspective, current price levels appear attractive for medium-to-long-term investors. The 1.54% dividend yield combined with stable cash flows provides value as a defensive growth stock. However, given continued macroeconomic uncertainty and tech sector volatility, a gradual accumulation approach seems prudent. Considering the discount to analyst price targets, this could represent a worthwhile opportunity for investors with a 12-18 month investment horizon.