The stock of credit scoring company Fair Isaac (FICO) is leading the S&P 500 index lower on May 20, with its share price falling 10% on no news.
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FICO stock is the biggest decliner in the S&P 500 in afternoon trading on May 20 as more than 314,000 shares changed hands. That’s more than the three-month average of 187,000 FICO shares that typically get traded on any given day.
It’s not clear why Fair Isaac’s stock is plunging. The company hasn’t made any statements and there are no media reports that would push the share price lower. Fair Isaac is one of America’s leading credit scoring agencies, responsible for people’s “FICO score.” The other main credit scoring companies, Equifax (EFX) and Transunion (TRU) are also trading lower on May 20 for no apparent reason.
Differing Views
Analysts seem to have differing views on FICO stock after the company’s latest financial results. In mid-May, Bank of America Securities (BAC) reiterated a Buy rating on Fair Isaac’s stock and raised its price target on the shares to $3,700 from $2,800 previously. Bank of America’s new price target is 82% higher than where the shares currently trade.
However, other analysts have taken issue with the valuation of FICO stock. Daniel Jones, an analyst who writes the Crude Value Insights newsletter, recently rated Fair Isaac’s stock a Sell, noting that the company’s price-to-earnings ratio is just over 90x and its price/operating cash flow sits above 70x, making it richly valued. FICO stock is up 2% this year.
Is FICO Stock a Buy?
The stock of Fair Isaac has a consensus Strong Buy rating among nine Wall Street analysts. That rating is based on seven Buy and two Hold ratings issued in the last three months. The average FICO price target of $2,439.89 implies 20.76% upside from current levels.
