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Fair Isaac Corporation (FICO)
NYSE:FICO
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Fair Isaac (FICO) AI Stock Analysis

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FICO

Fair Isaac

(NYSE:FICO)

Rating:67Neutral
Price Target:
$1,852.00
▲(20.85%Upside)
FICO's overall stock score reflects its strong financial performance and positive earnings call, offset by high valuation and technical weakness. The company's robust financial health and strategic growth initiatives are significant strengths, while its high leverage and current market technicals present notable risks.
Positive Factors
Earnings Growth
20%+ EPS growth is still the base case moving forward.
Stock Repurchase
The Board of Directors has approved a new $1 billion share repurchase authorization.
Valuation
Valuation analysis suggests a heavily favorable risk-reward from these levels.
Negative Factors
Market Perception
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 Volatility
The director's tweets have caused considerable volatility in the stocks of FICO and the credit bureaus.
Regulatory Criticism
The recent pull-back in the shares is in response to criticism from the FHFA on the company's mortgage score pricing strategy.

Fair Isaac (FICO) vs. SPDR S&P 500 ETF (SPY)

Fair Isaac Business Overview & Revenue Model

Company DescriptionFair 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 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
Any
On Premises and SAAS Software Revenue by Deployment Method
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.
Chart InsightsFICO's SAAS Software revenue shows robust growth, consistently outpacing On Premises Software. Despite a 2% increase in the Software segment's overall revenue, the earnings call highlighted slower growth and challenges with non-platform ARR, reflecting macroeconomic pressures. The strategic focus on SAAS aligns with broader industry trends towards cloud solutions, suggesting potential for continued expansion, especially as FICO leverages new partnerships and innovations. However, economic uncertainties could temper this momentum, impacting customer adoption and usage rates.
Data provided by:Main Street Data

Fair Isaac Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q2-2025)
|
% Change Since: -21.87%|
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 Financial Statement Overview

Summary
Fair Isaac exhibits strong financial performance with robust revenue growth and high profitability margins. The income statement and cash flow are particularly strong, with impressive margins and efficient cash generation. However, the balance sheet reveals high leverage and negative equity, posing financial risks.
Income Statement
85
Very Positive
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.
Balance Sheet
60
Neutral
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.
Cash Flow
78
Positive
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.
BreakdownSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue1.72B1.51B1.38B1.32B1.29B
Gross Profit1.37B1.20B1.08B984.07M933.42M
EBITDA761.49M663.81M576.66M554.93M349.56M
Net Income512.81M429.38M373.54M392.08M236.41M
Balance Sheet
Total Assets1.72B1.58B1.44B1.57B1.61B
Cash, Cash Equivalents and Short-Term Investments150.67M136.78M133.20M195.35M157.39M
Total Debt2.24B1.89B1.89B1.31B907.64M
Total Liabilities2.68B2.26B2.24B1.68B1.28B
Stockholders Equity-962.68M-687.99M-801.95M-110.94M331.08M
Cash Flow
Free Cash Flow624.08M464.68M503.42M416.25M342.93M
Operating Cash Flow632.96M468.92M509.45M423.82M364.92M
Investing Cash Flow-27.99M-15.95M-5.67M137.85M-24.58M
Financing Cash Flow-592.92M-455.00M-547.16M-523.57M-289.42M

Fair Isaac Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1532.52
Price Trends
50DMA
1751.10
Negative
100DMA
1822.05
Negative
200DMA
1928.43
Negative
Market Momentum
MACD
-76.17
Positive
RSI
32.59
Neutral
STOCH
56.78
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 1532.52 is below the 20-day moving average (MA) of 1639.95, below the 50-day MA of 1751.10, and below the 200-day MA of 1928.43, indicating a bearish trend. The MACD of -76.17 indicates Positive momentum. The RSI at 32.59 is Neutral, neither overbought nor oversold. The STOCH value of 56.78 is Neutral, 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$42.12B105.3416.88%25.07%103.30%
76
Outperform
$50.61B324.616.48%25.54%40.02%
74
Outperform
$16.36B33.9420.86%18.75%208.06%
72
Outperform
$63.33B133.485.70%15.38%-67.58%
67
Neutral
$37.38B66.01-47.82%14.72%21.81%
67
Neutral
$52.61B-34.33%19.12%-161.42%
63
Neutral
$34.70B5.15-11.38%1.67%5.54%-17.15%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FICO
Fair Isaac
1,532.52
-56.20
-3.54%
WDAY
Workday
241.74
14.61
6.43%
TEAM
Atlassian
203.00
24.86
13.96%
TTD
Trade Desk
86.14
-6.07
-6.58%
DT
Dynatrace
54.15
9.73
21.90%
DDOG
Datadog
149.84
31.92
27.07%

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 09, 2025