FactSet Research Systems' (FDS) fiscal Q3 results and commentary addressed investor concerns on growth deceleration and margin compression from AI investments, RBC Capital Markets said in a note Thursday.

Analysts said FactSet's sustained momentum in June, solid pipeline, and accelerating adoption of Model Context Protocol and AI bode well for its annual subscription value growth.

The company's fiscal Q3 margins, however, missed analyst expectations due to foreign exchange hedging headwinds and higher non-compensation expenses linked to growth and productivity efforts, according to the note.

Management has reiterated that restructuring and productivity efforts will help meet its annual margin guidance, suggesting a "meaningful" margin recovery in fiscal Q4, analysts said.

RBC Capital Markets maintained a sector perform rating and a $240 price target on the stock.

Shares of FactSet were up 1.5% in Thursday trading.

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