FactSet Research Systems (FDS)

Total return at 5 years: 12.8%/year = 11.4% appreciation + 1.4% dividend. The target price ($555) is ex-dividend; the $28 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $470 · Multiples $470) exceeds the market price ($323).

Today — fairly valued: at $323 trades ~31.1% below its value discounted to today (~$470); the discount is positive but does not reach the margin of safety we require (≥38%).

At 5 years — Infravalorado: the target price ($555) plus dividends yield above the required average return (10%) — the business compounds.

The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$294.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($323) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The market discounts less growth (-2.7%/year) than we project (5.5%/year) → if the base case holds, there is margin: perception is more pessimistic than the estimated reality.

That growth implies ~$0.5 bn of owner earnings in year 5 (vs ~$0.8 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on Utilidad neta comparable (P/E). In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Year 0 is the full fiscal year 2026, closed on August 31, 2026 and read from the results release of September 30, 2026 and reconciled against the FY2026 10-K filed on October 20, 2026 (revenues, operating income, net income, operating cash flow, capital expenditures, cash, debt and share repurchases match): revenues US$2,476 million (+6.7%), GAAP operating income US$700 million (28.3% margin against 32.2% in the prior fiscal year), GAAP net income US$533 million (21.5% margin; GAAP diluted earnings per share US$14.57), operating cash flow US$822 million and purchases of fixed assets and capitalized software US$115 million. Year 0's margin stays at its real level, with the non-recurring charges inside, and those charges are declared: the fiscal year's operating income absorbs US$79 million identified in the release's reconciliation (restructuring and severance US$46.2 million, one-time CEO onboarding costs US$19.5 million, divestiture and acquisition costs US$8.3 million, plus India labor-code reform, asset impairment, a client bankruptcy and a litigation reserve), equivalent to 3.2 points of operating margin and, after tax, to about US$67 million of net income. The fiscal 2027 guidance confirms that they do not recur: a GAAP operating margin of 31.0%-32.0%, which is almost exactly the fiscal year's 28.3% plus those 3.2 points. The gap between year 0 and year 1 therefore has a proper, verifiable name, and for that reason the path starts from the guidance and not from year 0's margin (§5 R1 previa). Year 1 is the entire fiscal year 2027 and takes both anchors of the guidance: revenues of US$2,600-2,625 million (base at the midpoint, US$2,612.5 million, +5.5%, consistent with the organic ASV growth guidance of 5.0%-6.5% from organic ASV of US$2,568 million, +7.0% at the close) and GAAP diluted earnings per share of US$17.00-17.50 (base US$17.34, on the model's year-1 share count; the adverse case at the low end, US$17.03, and the favorable case at the high end, US$17.49). Year 1's GAAP operating margin is the guidance midpoint (31.5%) and net income is 22.9% of revenues. From year 2 growth slows gently to 4.4% in year 5 and net margin recovers partially to 25.6% as discrete items fade and interest weighs less on a larger operating income; the amortization of intangibles from acquisitions is a recurring cost that does not go away. Share repurchases are material (US$644 million in the fiscal year, 6.3% of market value; the fourth-quarter diluted count fell 6.8% year over year, from 38.2 to 35.6 million) and are modeled via sharesPath, a single path for the three scenarios (§6), at a rate of −3.0% per year: moderate against the revealed pace and against the capacity to return capital, (fiscal-year free cash flow US$707 million − dividends US$164 million) / market value ≈ 5.3%, of which the modeled repurchase consumes a conservative portion (§6, when in doubt, less repurchase); in the fourth quarter repurchases were US$138 million, well below the fiscal year's quarterly average. Maintenance capex is taken as 100% of reported capex (maintPct=1.0): fiscal-year capex (US$114.7 million) is below depreciation and amortization (US$180.8 million), so there is no evidence that capex buys growth above replacement of the existing asset. Metric-level convention: comparable net income is already after interest, so cajaStart and deuda stay at 0 and the bridge neither subtracts the debt nor adds the cash again. The base-case exit multiple (21x) sits in the lower third of the financial-data archetype band [20,26]: return on capital is high (ROIC ~18.5% on the real invested capital of the balance sheet, equity + debt − cash, excellent category), but the moat is narrower than that of an index or ratings provider (Moody's, S&P Global, MSCI), with intense competition with AI capability (Bloomberg, LSEG Data & Analytics, BlackRock Aladdin) and a structural headwind from the shift toward passive management. The adverse case stresses year 1 with the low end of the guidance (revenues of US$2,600 million, 5.0%) and no additional margin recovery; the favorable case takes the high end of the guidance (US$2,625 million, 6.0%) and a faster margin recovery through operating leverage as AI products scale.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $555 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $323, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $555 in 5 years plus $28 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $470. Against the current market price ($323), the margin of safety is 31.1% (trades below the maximum → there is margin) and the total return at that price would be 12.8% annually.

• Entry multiple. TTM P/E 22×, close to the base case's exit multiple (21x).
• Guidance vs. fiscal year. The fiscal 2027 GAAP operating margin guidance (31.0%-32.0%) equals the fiscal 2026 margin excluding the non-recurring charges.
• Multiple compression vs. peers. Below index/rating providers with a wider moat.

Each margin over sales, year by year: historical (solid line) → projection (dotted).

• ✓ ROIC exceeds the cost of capital (~10%)
• ✓ CFROIC backs up the ROIC (109%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• ROIC. ~18.5% on real invested capital, excellent category vs. the 10% bar.
• Cash generation. Consistent cash conversion (~34% OCF margin), capital-light.
• Earnings quality. Fiscal 2026 GAAP margin compressed by US$79 million of one-time non-recurring charges.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

ASV (Annual Subscription Value) is the business's central operating driver: it measures the expected 12-month revenue of all subscription services currently in force, and its organic growth anticipates that of reported revenue. ASV retention above 95% for years is the most direct quantitative evidence of the business's switching cost — client churn is not reported separately in dollars, so ASV retention is the metric that best approximates that dynamic.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (31-ago-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Organic ASV. +7.0% year over year at August 2026, above the fiscal 2027 guidance (5.0%-6.5%).
• Historical deceleration. From +13.1% (FY23) to +5.4% (FY25) before recovering to +6.7% in fiscal 2026.
• Geographic diversification. APAC grows faster (10.5%) but off a small base (10.3% of ASV).

• Subscription retention. ASV >95% (fiscal 2026) and clients 91% (FY2025), stable for years.
• CUSIP franchise. Exclusive global issuer of CUSIP/CINS, a narrow but defensible regulatory position.
• Intense competition. Bloomberg, LSEG and BlackRock Aladdin compete with well-funded AI capabilities.
• Structural headwind. Shift toward passive management reduces demand among active managers.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Structural debt is what is exposed to the contraction phase of the cycle; operational debt (leases, matched funding) self-liquidates with the business.

• ✓Leverage (net debt / EBITDA)Net cash $0 bn
• ✓Interest coverage (EBIT / interest)12.8x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 109% of ROIC
• ✓Value creation (ROIC − 10% bar)+9pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.6x — no over-investment
• !Float / working capitalConsumes cash $0 bn (positive WC)
• !Dilution (SBC % of revenue + shares)SBC 3.4% of revenue

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Leverage. Debt US$1,370M / equity US$2,002M, moderate.
• Liquidity. Cash and equivalents of US$304M, ample interest coverage.
• Internal control. Material weakness identified in FY2024, concluded to be remediated as of August 31, 2026 according to the FY2026 10-K.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Leadership transition. CEO since Sep-2025 and CFO since Apr-2026, without an execution track record of their own yet.
• Skin in the game. Directors and executives own just 1.2% of shares.
• Capital allocation. 70% of capital deployed to repurchases in fiscal 2026, with no acquisitions.

• Forced sellers: fiscal 2026 net income fell 10.6% and the GAAP operating margin dropped from 32.2% to 28.3% (fourth-quarter net income fell 21.1% and operating income 11.7%) because of non-recurring charges for restructuring, CEO onboarding and divestiture, a result that penalizes GAAP without touching the value of the underlying business.
• Missing buyers: recent CEO change (September 2025) and CFO change (April 2026), which tends to generate caution among institutional investors until a track record of execution from the new team is seen.
• The market itself is already pricing in the structural risk of the shift toward passive management and competition from artificial-intelligence rivals, which keeps the multiple below peers with wider moats (Moody's, S&P Global, MSCI).

It trades at a real discount to value, though short of the required margin of safety. The fiscal 2027 guidance (GAAP earnings per share of US$17.00-17.50, +18% over the US$14.57 of fiscal 2026) shows that the company itself treats the fiscal-year charges as not recurring, while the market appears to discount a continuation of that cost pressure.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at +6%/year (+31% total): the margin of safety protects the downside. The bull (+17%/year, +122% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• AI competition. Bloomberg, S&P Global and LSEG are investing heavily in artificial-intelligence capabilities.
• Passive management. Structural shift that reduces demand among active managers.
• Provider concentration. One cloud provider and two content providers represent concentration risk.
• Buyback pace. US$644M in fiscal 2026, above free cash flow less dividends; total debt stayed flat.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  A narrow moat and ROIC 19% above the 10% bar, but the margin is limited (+31%) → excellent business at a fair price.

• Peter Lynch Growth at a reasonable price (GARP)

  A stalwart growing 6% at a PEG of 3.9 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Earnings yield 6% (EBIT/EV) + ROIC 19% → brushes the Magic Formula.

• Howard Marks Perception vs reality + cycle

  The price discounts -3% vs our 6%: perception is more pessimistic than reality, with an identified source of the discount.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor +4%/yr, bull-scenario ceiling +16%/yr over 5y → capital protected, asymmetry in your favor.

• Pat Dorsey Moat strength (Five Rules)

  A narrow moat, stable; sources: switching costs, intangibles, efficient scale → partially passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  Justifying the price requires discounting -3%, within what we project (6%) — the story squares with the numbers.