Fair Isaac (FICO) AI Stock Analysis

• Market Cap: $29.12B
• Dividend Yield: N/A
• Average Volume (3M): 302.03K
• Price to Earnings (P/E): 45.4
• Beta (1Y): 1.30
• Revenue Growth: 15.91%
• EPS Growth: 29.42%
• Country: US
• Employees: 3,718
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 7.33
• Shares Outstanding: 23,722,134
• 10 Day Avg. Volume: 205,276
• 30 Day Avg. Volume: 302,034
• PEG Ratio: 1.89
• Price to Book (P/B): -20.78
• Price to Sales (P/S): 18.22
• P/FCF Ratio: 47.12
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 15.61
• Enterprise Value/Gross Profit: 18.83
• Enterprise Value/Ebitda: 32.00
• 1Y Price Target: $2,103.70
• Price Target Upside: 71.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 41.09
• Revenue Forecast (FY): $2.46B

• Rating: 68 Neutral
• Price Target: $1,448.00 ▲(17.95% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is supported by very strong profitability and cash generation and a constructive earnings update (solid growth, platform traction, and margin expansion). It is held back by elevated balance-sheet risk (negative equity and high debt), weak current technicals (price below all key moving averages with bearish momentum), and a high P/E with no dividend yield provided.

Positive Factors

High margins & profitability

FICO’s very high gross and operating margins reflect a scalable analytics/software model with low incremental cost to serve. Durable margin structure supports sustained operating cash flow, investment in product development, and continued shareholder returns over the next several quarters.

Strong free cash flow

Consistently large operating and free cash flows provide durable internal funding for share repurchases, platform investment, and potential debt paydown. Robust cash generation enhances financial flexibility and cushions execution risk over a 2-6 month horizon if growth normalizes.

Platform ARR growth & retention

Rapid platform ARR expansion combined with 122% dollar-based net retention signals a sticky, expanding subscription base with strong upsell dynamics. Platform mix increases recurring revenue predictability and, together with partnerships and reseller programs, supports sustainable medium-term growth.

Negative Factors

High leverage & negative equity

Negative equity and a sizable, rising debt load materially weaken balance-sheet flexibility. High structural leverage increases refinancing and interest-rate risk, constrains strategic options (M&A, investment), and elevates downside risk if operating cash flow weakens.

Regulatory/timing uncertainty for Score 10T

Unclear agency timelines for Score 10T and Direct Licensing slow the path to broader adoption and monetization. Regulatory delays create execution risk for a key product transition and may postpone revenue and market-share gains tied to the new score.

Revenue concentration & mortgage exposure

Heavy geographic concentration and sizable dependence on mortgage-originations-driven Scores revenue amplify exposure to U.S. interest-rate cycles, housing trends, and regional regulatory shifts. Limited geographic/product diversification raises cyclicality and execution risk.

Fair Isaac Business Overview & Revenue Model

Company Description

Fair Isaac Corporation develops analytic, software, and data management products and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Scores and Software. The Software segment offers pre-configured decision management solution designed for various business problems or processes, such as marketing, account origination, customer management, customer engagement, fraud detection, financial crimes compliance, collection, and marketing, as well as associated professional services. This segment also provides FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to analytics to be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. Fair Isaac Corporation markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.

How the Company Makes Money

FICO generates revenue primarily through its software licensing, subscription services, and consulting services. The company has a diversified revenue model that includes selling licenses for its analytics software and providing ongoing maintenance and support services. Additionally, FICO earns significant income from its FICO Score product, which is utilized by lenders and financial institutions to assess borrower creditworthiness. The company also offers analytics and consulting services that help clients implement and optimize their decision management processes. Strategic partnerships with major financial institutions and technology providers further enhance FICO's revenue streams, as these collaborations often involve joint product development and integrated solutions that extend FICO's market reach.

Fair Isaac Financial Statement Overview

Summary

Exceptional profitability and cash generation (TTM gross margin ~82%, net margin ~33%, EBIT margin ~47%; TTM operating cash flow ~$759M and free cash flow ~$735M). However, the balance sheet is a major risk factor with negative equity (~-$1.81B TTM) and sizable/rising debt (~$3.21B TTM), reducing financial flexibility if growth slows.

Income Statement

Profitability is a clear strength: TTM (Trailing-Twelve-Months) gross margin is ~82% and net margin is ~33%, with operating profitability also very strong (EBIT margin ~47%). Revenue has grown consistently across the annual periods shown (from ~$1.32B in 2021 to ~$1.99B in 2025), and TTM (Trailing-Twelve-Months) revenue growth remains positive. The main watch-out is the evident slowdown in growth more recently (2025 annual growth is modest versus prior years), which can pressure valuation and future operating leverage if it persists.

Balance Sheet

The balance sheet is the weak link. Stockholders’ equity is negative across all periods shown (TTM (Trailing-Twelve-Months) about -$1.81B), which makes leverage look structurally high and indicates the capital structure is heavily debt/obligation-supported rather than equity-supported. Total debt is sizable and rising (about $1.33B in 2021 to ~$3.21B TTM (Trailing-Twelve-Months)) while total assets are materially lower (~$1.85B TTM (Trailing-Twelve-Months)), limiting balance-sheet flexibility. While the business is highly profitable, the negative equity profile elevates financial risk and reduces cushion in a downturn.

Cash Flow

Cash generation is strong and high-quality. TTM (Trailing-Twelve-Months) operating cash flow (~$759M) and free cash flow (~$735M) are robust relative to net income, with free cash flow running at roughly the same level as earnings (TTM free cash flow to net income ~0.96). Free cash flow growth is slightly negative TTM (Trailing-Twelve-Months), suggesting some recent normalization, but multi-year cash flow generation remains solid overall. One caution: cash flow covers accounting profits well, but it is not consistently above them, so there is limited extra cushion if working capital or cash taxes swing.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	2.06B	1.99B	1.72B	1.51B	1.38B	1.32B
Gross Profit	1.71B	1.64B	1.37B	1.20B	1.08B	984.07M
EBITDA	1.01B	951.19M	761.49M	663.81M	560.74M	538.83M
Net Income	657.79M	651.95M	512.81M	429.38M	373.54M	392.08M
Balance Sheet
Total Assets	1.85B	1.87B	1.72B	1.58B	1.44B	1.57B
Cash, Cash Equivalents and Short-Term Investments	162.03M	134.14M	150.67M	136.78M	133.20M	195.35M
Total Debt	3.23B	3.07B	2.24B	1.90B	1.91B	1.33B
Total Liabilities	3.66B	3.61B	2.68B	2.26B	2.24B	1.68B
Stockholders Equity	-1.81B	-1.75B	-962.68M	-687.99M	-801.95M	-110.94M
Cash Flow
Free Cash Flow	735.08M	769.88M	607.41M	464.68M	503.42M	416.25M
Operating Cash Flow	758.89M	778.81M	632.96M	468.92M	509.45M	423.82M
Investing Cash Flow	-47.51M	-43.72M	-27.99M	-15.95M	-5.67M	137.85M
Financing Cash Flow	-739.59M	-750.33M	-592.92M	-455.00M	-547.16M	-523.57M

Fair Isaac Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1227.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

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 1227.63 is below the 20-day moving average (MA) of 1384.00, below the 50-day MA of 1556.12, and below the 200-day MA of 1631.91, indicating a bearish trend. The MACD of -73.83 indicates Positive momentum. The RSI at 23.93 is Positive, neither overbought nor oversold. The STOCH value of 29.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FICO.

Fair Isaac Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DT	72 Outperform	$10.22B	56.43	6.96%	―	18.50%	207.45%
TTD	70 Outperform	$12.06B	28.45	16.78%	―	20.82%	41.82%
FICO	68 Neutral	$29.12B	45.45	―	―	15.91%	29.42%
WDAY	65 Neutral	$34.25B	54.68	7.34%	―	13.35%	-60.76%
DDOG	65 Neutral	$36.83B	352.57	3.34%	―	26.63%	-46.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TEAM	56 Neutral	$18.84B	-98.94	-13.47%	―	19.51%	53.35%