Education
About Us
Working with TipRanks
Follow Us
Fair Isaac Corporation (FICO)
NYSE:FICO
Top Page
Fair Isaac
(NYSE:FICO)
Rating:70Outperform
Price Target:
$1,879.00
▲( 10.90% Upside)
Positive Factors
Market Confidence
FICO continues to be included on the Needham Conviction List, indicating strong confidence in its performance.
Strategic Initiatives
FICO's focus on AI, marketplace, and partner channel evolution with substantive announcements this year is expected to enhance the client experience and drive incremental revenue.
Technological Advancements
The unveiling of the next-gen FICO Platform, which takes capabilities to a new scale, was one of the most exciting announcements.
Negative Factors
Market Disruption
The option for Fannie and Freddie to no longer require FICO scores, potentially favoring the VantageScore, would threaten to disrupt the entire mortgage-backed security ecosystem.
Regulatory Concerns
The recent commentary by the FHFA Director is perceived as a threat to Fair Isaac’s pricing power.
Share Price Volatility
FICO shares have fallen 20% since news broke about comments that Federal Housing Finance Agency (FHFA) director Bill Pulte made at a Mortgage Bankers Association conference.
Fair Isaac (FICO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$41.24B
Dividend YieldN/A
Average Volume (3M)230.10K
Price to Earnings (P/E)73.0
Beta (1Y)1.35
Revenue Growth14.72%
EPS Growth21.81%
CountryUS
Employees3,718
SectorTechnology
Sector Strength76
IndustrySoftware - Application
Share Statistics
EPS (TTM)7.81
Shares Outstanding24,341,690
10 Day Avg. Volume323,846
30 Day Avg. Volume230,100
Financial Highlights & Ratios
PEG Ratio13.57
Price to Book (P/B)-45.31
Price to Sales (P/S)0.00
P/FCF Ratio73.56
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue7.62
Enterprise Value/Gross Profit35.79
Enterprise Value/Ebitda17.17
Forecast
1Y Price Target
$2,481.00Price Target Upside46.43% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Fair Isaac Business Overview & Revenue Model
Company DescriptionFair Isaac Corporation, commonly known as FICO, operates in the analytics and software sector, primarily focused on decision management solutions. It is renowned for creating the FICO Score, a widely used credit scoring system that helps lenders assess credit risk. Besides credit scoring, FICO provides products and services that assist businesses in fraud detection, customer engagement, and risk management.
How the Company Makes MoneyFICO makes money through a diverse revenue model that includes the sale of software and solutions, professional services, and the licensing of its credit scoring models. A significant portion of its revenue comes from the licensing of its FICO Score to financial institutions, lenders, and credit reporting agencies, who use these scores to evaluate the creditworthiness of consumers. Additionally, FICO generates income by offering analytics software and tools that help businesses optimize decision-making processes and manage risk. Key partnerships with financial institutions and credit bureaus also play an essential role in its revenue-generating activities.
Fair Isaac Key Performance Indicators (KPIs)
Any
On Premises and SAAS Software Revenue by Deployment Method
Compares revenue from on-premises and SaaS software, indicating the company’s transition to cloud-based solutions and recurring revenue potential.
Compares revenue from on-premises and SaaS software, indicating the company’s transition to cloud-based solutions and recurring revenue potential.
Data provided by:
Main Street Data
Main Street DataFair Isaac Financial Statement Overview
Summary
Fair Isaac presents a compelling financial profile with strong growth and profitability, evidenced by its income statement and cash flow. However, the high leverage and negative equity from its balance sheet pose financial risks. Despite these concerns, consistent revenue and cash flow growth, along with margins outperforming industry averages, suggest resilience and potential for continued success.Income Statement
Fair Isaac demonstrates robust revenue growth with a TTM increase of 7.19% and consistent improvement over recent years. The gross profit margin stands impressively at 80.82% for TTM, indicating efficient cost management. EBIT (44.15%) and EBITDA (44.94%) margins are strong, reflecting healthy operational performance. Net profit margin at 31.36% further underlines its profitability. Overall, the company showcases a solid growth trajectory and high profitability, aligning with industry leaders.85
Very Positive
Balance Sheet
The balance sheet shows a concerning debt-to-equity ratio due to negative equity, indicating potential financial risk. The company's total debt has been increasing, now at $2.55 billion. Despite this, Fair Isaac maintains a substantial equity ratio of -61.23%, highlighting leverage concerns. Return on equity is not applicable due to negative equity. While the company exhibits strong asset management, the high leverage poses a potential risk.60
Neutral
Cash Flow
Cash flow analysis reveals a solid operating cash flow to net income ratio of 1.23, indicating efficient cash generation relative to earnings. Free cash flow has grown steadily, with a TTM increase of 10.71%, supporting the company's investment capacity. The free cash flow to net income ratio of 1.20 further underscores strong cash management. Overall, Fair Isaac has a healthy cash flow position, although high leverage could impact future cash flow stability.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.84B | 1.72B | 1.51B | 1.38B | 1.32B | 1.29B | Gross Profit |
| 1.49B | 1.37B | 1.20B | 1.08B | 984.07M | 933.42M | EBIT |
| 812.61M | 733.63M | 642.83M | 542.41M | 321.13M | 295.97M | EBITDA |
| 829.07M | 761.49M | 663.81M | 576.66M | 554.93M | 349.56M | Net Income Common Stockholders |
| 577.09M | 512.81M | 429.38M | 373.54M | 392.08M | 236.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 135.67M | 150.67M | 136.78M | 133.20M | 195.35M | 157.39M | Total Assets |
| 1.70B | 1.72B | 1.58B | 1.44B | 1.57B | 1.61B | Total Debt |
| 2.08B | 2.24B | 1.89B | 1.89B | 1.31B | 907.64M | Net Debt |
| 1.94B | 2.09B | 1.75B | 1.76B | 1.12B | 750.25M | Total Liabilities |
| 2.44B | 2.68B | 2.26B | 2.24B | 1.68B | 1.28B | Stockholders Equity |
| -735.66M | -962.68M | -687.99M | -801.95M | -110.94M | 331.08M |
| Cash Flow | Free Cash Flow | ||||
| 691.00M | 624.08M | 464.68M | 503.42M | 416.25M | 342.93M | Operating Cash Flow |
| 708.72M | 632.96M | 468.92M | 509.45M | 423.82M | 364.92M | Investing Cash Flow |
| -35.84M | -27.99M | -15.95M | -5.67M | 137.85M | -24.58M | Financing Cash Flow |
| -657.42M | -592.92M | -455.00M | -547.16M | -523.57M | -289.42M |
Fair Isaac Technical Analysis
Negative
1694.36
Price Trends
1923.18
Negative
1889.82
Negative
1950.52
Negative
Market Momentum
-23.17
Positive
29.68
Positive
7.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FICO, the sentiment is Negative. The current price of 1694.36 is below the 20-day moving average (MA) of 2024.22, below the 50-day MA of 1923.18, and below the 200-day MA of 1950.52, indicating a bearish trend. The MACD of -23.17 indicates Positive momentum. The RSI at 29.68 is Positive, neither overbought nor oversold. The STOCH value of 7.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FICO.
Fair Isaac Risk Analysis
Fair Isaac disclosed 30 risk factors in its most recent earnings report. Fair Isaac reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fair Isaac Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $24.41B | 85.35 | 8.87% | ― | 9.96% | 50.93% | |
76 Outperform | $39.00B | 16.66 | 16.61% | 1.53% | 4.09% | 14.05% | |
74 Outperform | $66.75B | ― | -40.16% | ― | 27.50% | -49.96% | |
72 Outperform | $54.78B | ― | -7.35% | ― | 27.79% | 56.19% | |
71 Outperform | $41.10B | 48.93 | 5.25% | 1.89% | -9.12% | ― | |
70 Outperform | $41.24B | 72.98 | -47.82% | ― | 14.72% | 21.81% | |
61 Neutral | $11.29B | 10.07 | -7.05% | 2.96% | 7.47% | -10.75% |
* Technology Sector Average
Performance Comparison
FICO
Fair Isaac
1,694.36
309.23
22.32%
CTSH
Cognizant
79.12
13.26
20.13%
FIS
Fidelity National Info
78.22
4.50
6.10%
TYL
Tyler Technologies
566.02
86.89
18.13%
NET
Cloudflare
158.04
84.17
113.94%
SNOW
Snowflake
200.05
49.31
32.71%
Fair Isaac Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q2-2025)
| % Change Since: -13.62%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
FICO's earnings call highlighted strong financial performance with significant growth in revenues and net income, particularly driven by the Scores segment. The company demonstrated ongoing innovation and strategic partnerships. However, challenges were noted in the Software segment's slower growth and macroeconomic factors affecting usage. Overall, the highlights outweigh the lowlights, indicating a positive sentiment.Q2-2025 Updates
Positive Updates
Strong Revenue and Income Growth
FICO reported Q2 2025 revenues of $499 million, up 15% from the prior year. GAAP net income increased by 25% to $163 million, and GAAP earnings per share rose by 28% to $6.59.
Scores Segment Performance
The Scores segment saw revenues increase by 25% to $297 million, driven by a 31% rise in B2B revenues, primarily due to a 48% increase in mortgage origination revenues.
Free Cash Flow Growth
FICO delivered free cash flow of $65 million in Q2 and $677 million over the last four quarters, marking a 45% increase over the prior trailing 12-month period.
Innovative Product Developments
FICO announced the Kenya-specific FICO score and continued to push financial literacy initiatives. The FICO Score 10 T adoption program showed strong results, with significant client engagement in mortgage originations.
Strategic Partnerships
New partnerships were established with Fujitsu in Japan and dacadoo in the life insurance industry, aiming to enhance digital transformation and precision in underwriting.
Negative Updates
Software Segment Slower Growth
Software segment revenues grew only 2% to $202 million, with professional services declining by 9%. There were usage headwinds in both platform and non-platform categories.
Challenges with Non-Platform ARR
Non-platform ARR declined by 3%, reflecting some macroeconomic factors affecting customer usage and outreach programs.
Economic Uncertainty Impact
The macroeconomic environment remains fluid, with some customers delaying or downsizing outreach programs due to volatility.
Company Guidance
During the FICO Second Quarter 2025 Earnings Conference Call, the guidance provided was optimistic, with the company reiterating its fiscal 2025 guidance amidst a solid performance. The company reported second-quarter revenue of $499 million, which marked a 15% increase compared to the prior year. GAAP net income was $163 million, a 25% increase, and GAAP earnings per share rose by 28% to $6.59. Non-GAAP net income was $193 million, also up 25%, with non-GAAP earnings per share at $7.81, a 27% increase from the previous year. The company generated $65 million in free cash flow during the quarter, with a trailing twelve-month free cash flow of $677 million, reflecting a 45% increase. The Scores segment saw significant growth, with revenues of $297 million, up 25% year-over-year, driven by a 31% increase in B2B revenues, predominantly from mortgage originations. Meanwhile, the Software segment delivered $202 million in revenue, up 2% from the prior year. Overall, FICO maintains confidence in its strategic initiatives and financial prospects for the remainder of the fiscal year.Fair Isaac Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Fair Isaac Secures $1 Billion Credit Facility
Positive
May 13, 2025
On May 13, 2025, Fair Isaac Corporation entered into a Third Amended and Restated Credit Agreement, establishing a $1.0 billion unsecured revolving credit facility with a five-year term, aimed at refinancing existing debt and supporting corporate activities. Additionally, the company closed a private offering of $1.5 billion in Senior Notes, intended to repay existing debt and fund general corporate purposes, potentially strengthening its financial structure and market position.
The most recent analyst rating on (FICO) stock is a Buy with a $1450.00 price target. To see the full list of analyst forecasts on Fair Isaac stock, see the FICO Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Fair Isaac Launches $1.5 Billion Senior Notes Offering
Neutral
May 8, 2025
Fair Isaac Corporation announced a proposed refinancing of its existing credit agreement with a new $1.0 billion unsecured revolving credit facility maturing in 2030, aimed at repaying certain outstanding debts and supporting corporate purposes. Additionally, on May 8, 2025, FICO commenced a private offering of $1.5 billion in senior notes due 2033, intended to repay existing debts and fund general corporate purposes, reflecting strategic financial restructuring to enhance liquidity and operational flexibility.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.