FactSet Research Systems (FDS)

Total return at 5 years: 15.1%/year = 13.6% appreciation + 1.4% dividend. The target price ($572) is ex-dividend; the $28 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $449 · Multiples $483) exceeds the market price ($302).

Today — fairly valued: at $302 trades ~37.5% below its value discounted to today (~$483); the discount is positive but does not reach the margin of safety we require (≥38%).

At 5 years — Muy infravalorado: the target price ($572) 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 ~$303.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($302) 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 (-3.2%/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 ~$0.7 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.

The year-0 is the TTM closed on May 31, 2026 (latest 10-Q, ingested in XBRL on July 1, 2026 along with the third fiscal quarter 2026 earnings 8-K). The TTM net margin (23.2%) is compressed versus FY2025 (25.7%) by non-recurring charges in the third fiscal quarter of 2026: CEO transition (US$4.3 million), restructuring and severance (US$19.6 million), an impairment on an equity investment (US$2.3 million), and a client bankruptcy (US$0.75 million), added to higher compensation and technology costs. The company reaffirmed its full fiscal-2026 guidance on July 1, 2026: revenue of US$2,450-2,470 million, GAAP operating margin of 29.5%-31.0%, GAAP net income of US$555-582 million, and GAAP diluted EPS of US$14.85-15.35 — a level practically identical to the TTM (TTM net margin 23.2% vs. 23.1% implied at the midpoint of guidance), so the year-0 is not normalized upward: guidance confirms that the TTM level, charges included, is the correct starting point for year 1 (§5 R1 previous). The year-1 revenue path is anchored in the organic ASV growth guidance (US$130-160 million over a base of US$2,370.9 million, +5.5%/+6.7%) and in the organic growth already observed (ASV +7.1% year over year and organic revenue +7.0% in the third fiscal quarter of 2026), consistent with the reported revenue trajectory (FY23 +13.1%, FY24 +5.6%, FY25 +5.4%, TTM +6.6%). The margin is projected with a gradual (not complete) recovery toward pre-charge levels, given that amortization of intangibles from past acquisitions is a recurring cost that does not disappear and the company flags pricing pressure and higher technology/AI spending. Share buybacks are material (US$612.6 million over the last twelve months, ~5.6% of market value, with marked acceleration: US$203.1 million in the third fiscal quarter alone) and are modeled via sharesPath (a single path for all three scenarios, §6), at a rate of −3.0%/year — moderate against the recent TTM pace (which annualized runs around −6/−7%, partly supported by cash and not entirely by free cash flow) and against real capital-return capacity: (TTM free cash flow of US$708.3 million − TTM dividends of US$164.3 million) / market value ≈ 5.0%, of which the modeled buyback consumes a conservative portion, leaving headroom (§6, when in doubt, less buyback). Maintenance capex is taken as 100% of reported capex (maintPct=1.0): TTM capex (US$121.3 million) is below TTM depreciation and amortization (US$176.4 million), so under the Greenwald rule there is no evidence that capex is buying incremental growth beyond replacing existing assets — all capex is treated as maintenance, the conservative reading for owner earnings. 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 ~19.1% on real invested capital from the balance sheet, equity + debt − cash, excellent category), but the moat is narrower than that of an index or credit-rating provider (Moody's, S&P Global, MSCI) — there is intense competition with AI capability (Bloomberg, LSEG Data & Analytics, BlackRock Aladdin) and a structural headwind from the shift toward passive management — and terminal growth decelerates to a mid-to-low single digit. The bear stresses year 1 with lower revenue growth (5.0% vs. 6.2% in the base case) and no margin recovery; the bull captures the high end of organic ASV guidance and a faster margin recovery from operating leverage at the scale of AI products.

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 $572 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $302, 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 $572 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 $483. Against the current market price ($302), the margin of safety is 37.5% (trades below the maximum → there is margin) and the total return at that price would be 15.1% annually.

• Entry multiple. TTM P/E ~19.3x, close to the base case's exit multiple (21x).
• Guidance vs. TTM. FY2026 net income guidance matches the TTM net margin almost exactly.
• 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 (101%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• ROIC. ~19.1% on real invested capital, excellent category vs. the 10% bar.
• Cash generation. Consistent cash conversion (~34% OCF margin), capital-light.
• Earnings quality. TTM GAAP margin compressed by specific 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-may-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. +7.1% year over year as of May-2026, within reaffirmed guidance.
• Historical deceleration. From +13.1% (FY23) to +5.4% (FY25) before rebounding in the TTM.
• Geographic diversification. APAC grows faster (10.5%) but off a small base (10.3% of ASV).

• Subscription retention. ASV >95% 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)13.4x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 101% of ROIC
• ✓Value creation (ROIC − 10% bar)+9pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.7x — no over-investment
• !Float / working capitalConsumes cash $0.1 bn (positive WC)
• !Dilution (SBC % of revenue + shares)SBC 3.1% 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$1,390M / equity US$2,032M, moderate.
• Liquidity. Cash and equivalents of US$304M, ample interest coverage.
• Internal control. Material weakness identified in FY2024, remediation under way through FY2026.

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. 68% of deployed capital to buybacks in the TTM, with no recent acquisitions.

• Motivated sellers: GAAP net income and operating margin fell year over year in the third quarter of fiscal 2026 (-14.7% and -14.3pp respectively) on non-recurring CEO-transition, restructuring and impairment charges, a result that punishes GAAP without touching the underlying value of the 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).

There is a margin of safety: the market's perception is meaningfully worse than reality. TTM comparable net income already reflects the non-recurring charges of the most recent quarter and still matches the midpoint of the reaffirmed full-fiscal-year guidance, which suggests the market is pricing in a continuation of that cost pressure beyond what the company itself projects.

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 +7%/year (+39% total): the margin of safety protects the downside. The bull (+21%/year, +157% 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$612.6M TTM, partly funded with debt, may not be sustainable.

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 (+38%) → excellent business at a fair price.

• Peter Lynch Growth at a reasonable price (GARP)

  A stalwart growing 6% at a PEG of 3.5 → expensive for its growth.

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

  Earnings yield 7% (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 +5%/yr, bull-scenario ceiling +20%/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.