Funny thing about FactSet
"So what?" you may ask. Well, it means that although this company has already been a tremendous winner in the stock market (trading in the low single digits just six or seven years ago), there is no reason to think it's close to hitting a wall with respect to growth.
In fact, results for its fiscal first quarter look like more of the same steady and sustainable growth we've seen from this company in recent quarters. Revenue rose than 21%, and while operating income according to generally accepted accounting principles was up only 6% because of stock compensation expenses and some tax matters, net income climbed 17%. Operating cash flow was flat for the quarter, but as I've said in the past, quarter-by-quarter cash flow analysis can be more misleading than it is informative.
So what could propel this still-small company even higher? First of all, the company has considerable potential to grow its overseas business, as less than a third of its subscription revenue comes from outside the United States.
What's more, the company has quite modest capabilities right now in fixed income. As much as we at The Motley Fool talk about equities, fixed income is an enormous worldwide market, and many of your leading investment banks, such as Lehman Brothers
Put simply, investment professionals and traders consume ever-larger amounts of information on a day-to-day basis to do their business. Accordingly, it seems pretty safe to say that the demand for information services, like those provided by FactSet, will continue to be in ever-higher demand, barring a total market meltdown. Although these shares aren't exactly cheap by conventional measures, this is a well-run, high-potential company with plenty of room yet to run.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).