Fair Isaac (FICO) AI Stock Analysis

• Market Cap: $36.46B
• Dividend Yield: N/A
• Average Volume (3M): 359.37K
• Price to Earnings (P/E): 59.9
• Beta (1Y): 1.36
• Revenue Growth: 16.66%
• EPS Growth: 34.26%
• Country: US
• Employees: 3,718
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Application
• EPS (TTM): 8.57
• Shares Outstanding: 24,003,656
• 10 Day Avg. Volume: 352,899
• 30 Day Avg. Volume: 359,374
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.30
• Enterprise Value/Revenue: 24.64
• Enterprise Value/Gross Profit: 30.15
• Enterprise Value/Ebitda: 52.32
• 1Y Price Target: $1,960.86
• Price Target Upside: 27.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 69 Neutral
• Price Target: $1,666.00 ▲(8.75% Upside)

Fair Isaac's strong financial performance and positive earnings call outlook are tempered by valuation concerns and technical indicators suggesting potential bearish momentum. The company's innovative products and strategic partnerships provide a positive long-term outlook, but immediate risks from high leverage and market conditions remain.

Positive Factors

Business Model

FICO has a very high-quality business model given its ability to take prices in Scores across lending classes.

Financial Performance

FICO's results exceeded consensus estimates on both revenue and earnings, showing strong performance.

Market Position

The company continues to gain lending partners for mortgage scoring, indicating a strong market position.

Negative Factors

Investor Concerns

The announcement has caused FICO shares to pull back, which is believed to be due to investor concern about the days of the 'FICO monopoly' being over.

Market Uncertainty

Lenders may pull both a FICO and VS and only submit the higher score to make mortgages appear less risky, adding uncertainty to the market.

Risk to System

Credit score providers are incentivized to loosen their criteria to score more individuals and inflate scores, making scores less reliable and adding risk to the system.

Fair Isaac Business Overview & Revenue Model

Company Description

Fair Isaac Corporation (FICO) is a data analytics and software company that specializes in credit scoring and predictive analytics. Founded in 1956, FICO operates primarily in the financial services sector, providing solutions that help businesses make informed decisions regarding credit risk, fraud detection, and customer engagement. Its core products include the FICO Score, widely used by lenders to evaluate consumer credit risk, and various analytics software solutions that assist organizations in optimizing their operations and enhancing customer experience across multiple industries.

How the Company Makes Money

FICO generates revenue through a combination of software licenses, subscription services, and consulting fees. The company primarily earns money from its analytics and decision management software, which is sold as a one-time license or through annual subscriptions. FICO also generates significant revenue from its credit scoring services, as lenders pay to access FICO Scores and related analytic tools. Additionally, the company has established partnerships with various financial institutions and technology firms, which can provide supplementary revenue through joint offerings and integrations. FICO's focus on developing innovative solutions in fraud detection and risk management further enhances its revenue potential in a growing market.

Fair Isaac Financial Statement Overview

Summary

Fair Isaac exhibits strong profitability and cash flow performance, indicating operational excellence. However, negative equity and high financial leverage pose significant risk factors, necessitating attention to balance sheet weaknesses for long-term stability.

Income Statement

Fair Isaac demonstrates strong profitability with a rising gross profit margin of 81.7% and a healthy net profit margin of 32.8% in TTM. Revenue growth is robust at 12.3% over the last year, indicating strong market demand and effective business strategy. The EBIT margin of 45.9% and EBITDA margin of 46.3% further highlight operational efficiency. However, future growth could be impacted by industry competition and economic fluctuations.

Balance Sheet

The company's balance sheet shows a negative stockholders' equity, which is concerning as it indicates liabilities exceeding assets. The debt-to-equity ratio is high due to negative equity, reflecting financial leverage risks. Return on equity is not meaningful with negative equity, but the company maintains an equity ratio of -75.0%, underscoring potential financial instability.

Cash Flow

Cash flow generation is strong, with a free cash flow growth rate of 23.3%, indicating effective cash management and operational success. The operating cash flow to net income ratio is high at 1.23, showing efficient conversion of earnings to cash. The free cash flow to net income ratio of 1.22 further supports strong cash flow sustainability. These metrics indicate a robust cash flow position despite balance sheet weaknesses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.93B	1.72B	1.51B	1.38B	1.32B	1.29B
Gross Profit	1.58B	1.37B	1.20B	1.08B	984.07M	933.42M
EBITDA	908.54M	761.49M	663.81M	560.74M	538.83M	329.54M
Net Income	632.62M	512.81M	429.38M	373.54M	392.08M	236.41M
Balance Sheet
Total Assets	1.86B	1.72B	1.58B	1.44B	1.57B	1.61B
Cash, Cash Equivalents and Short-Term Investments	189.05M	150.67M	136.78M	133.20M	195.35M	157.39M
Total Debt	2.80B	2.24B	1.90B	1.91B	1.33B	907.64M
Total Liabilities	3.26B	2.68B	2.26B	2.24B	1.68B	1.28B
Stockholders Equity	-1.40B	-962.68M	-687.99M	-801.95M	-110.94M	331.08M
Cash Flow
Free Cash Flow	769.74M	624.08M	464.68M	503.42M	416.25M	342.93M
Operating Cash Flow	781.62M	632.96M	468.92M	509.45M	423.82M	364.92M
Investing Cash Flow	-37.95M	-27.99M	-15.95M	-5.67M	137.85M	-24.58M
Financing Cash Flow	-714.73M	-592.92M	-455.00M	-547.16M	-523.57M	-289.42M

Fair Isaac Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1531.99
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FICO, the sentiment is Neutral. The current price of 1531.99 is above the 20-day moving average (MA) of 1408.61, above the 50-day MA of 1511.66, and below the 200-day MA of 1832.41, indicating a neutral trend. The MACD of 12.19 indicates Negative momentum. The RSI at 61.77 is Neutral, neither overbought nor oversold. The STOCH value of 89.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FICO.

Fair Isaac Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DT	77 Outperform	$15.01B	30.77	20.69%	―	18.70%	214.47%
WDAY	73 Outperform	$61.71B	106.89	6.66%	―	14.21%	-62.56%
FICO	69 Neutral	$36.46B	59.92	-47.82%	―	16.66%	34.26%
DDOG	68 Neutral	$45.96B	380.76	4.45%	―	26.00%	-25.64%
TTD	66 Neutral	$25.39B	62.78	16.36%	―	23.18%	63.48%
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%
TEAM	58 Neutral	$44.09B	―	-21.58%	―	19.66%	15.17%

Fair Isaac Corporate Events

Fair Isaac Announces Retirement of Scores President

On August 28, 2025, Fair Isaac Corporation (FICO) announced the retirement of James Wehmann, President of Scores, effective September 5, 2025. Wehmann, who joined FICO in 2012, is stepping down to focus on family and personal interests. CEO William Lansing will assume direct responsibility for the Scores business, acknowledging Wehmann’s significant contributions and leaving the Scores division in a strong position.