Here’s Why Conestoga Capital Advisors Sold its Stake in Factset Research Systems (FDS)

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. The Mid Cap Composite returned -3.2% net-of-fees in the third quarter, compared to a 2.8% gain for the Russell Midcap Growth Index. The strategy’s focus on high-quality, profitable companies struggled to keep pace in the quarter amid risk-on dominance. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as FactSet Research Systems Inc. (NYSE:FDS). FactSet Research Systems Inc. (NYSE:FDS) is a financial data company that provides integrated financial information and analytical applications for the investment community. The one-month return of FactSet Research Systems Inc. (NYSE:FDS) was 1.98%, and its shares lost 36.76% of their value over the last 52 weeks. On October 21, 2025, FactSet Research Systems Inc. (NYSE:FDS) stock closed at $294.11 per share, with a market capitalization of $11.119 billion.

Conestoga Capital Advisors stated the following regarding FactSet Research Systems Inc. (NYSE:FDS) in its third quarter 2025 investor letter:

“FactSet Research Systems Inc. (NYSE:FDS) delivers financial data, analytics, and software to investment professionals worldwide. Organic growth has slowed amid budget constraints at asset managers and intensifying competition from Bloomberg, S&P, and new fintech entrants. Margin pressures from rising technology and content costs further challenge earnings momentum. While the company remains a high-quality franchise, its premium valuation leaves little cushion for execution risks.”

Oversold but Not Overlooked: Why FactSet (FDS) Deserves a Second Look

FactSet Research Systems Inc. (NYSE:FDS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 36 hedge fund portfolios held FactSet Research Systems Inc. (NYSE:FDS) at the end of the second quarter, up from 29 in the previous quarter.  In the fourth quarter of fiscal 2025, FactSet Research Systems Inc. (NYSE:FDS) revenues increased 6.2% year-over-year, reaching $597 million. While we acknowledge the risk and potential of FactSet Research Systems Inc. (NYSE:FDS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FactSet Research Systems Inc. (NYSE:FDS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered FactSet Research Systems Inc. (NYSE:FDS) and shared the list of stocks on Jim Cramer’s radar. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.