Fair Isaac (FICO) AI Stock Analysis

• Market Cap: $37.38B
• Dividend Yield: N/A
• Average Volume (3M): 322.88K
• Price to Earnings (P/E): 66.0
• Beta (1Y): 1.33
• Revenue Growth: 14.72%
• EPS Growth: 21.81%
• Country: US
• Employees: 3,718
• Sector: Technology
• Sector Strength: 90
• Industry: Software - Application
• EPS (TTM): 7.81
• Shares Outstanding: 24,341,690
• 10 Day Avg. Volume: 336,450
• 30 Day Avg. Volume: 322,877
• PEG Ratio: 9.69
• Price to Book (P/B): -32.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 52.52
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 5.59
• Enterprise Value/Gross Profit: 26.28
• Enterprise Value/Ebitda: 12.61
• 1Y Price Target: $2,086.50
• Price Target Upside: 36.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 67 Neutral
• 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 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 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 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

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

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

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.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.72B	1.51B	1.38B	1.32B	1.29B
Gross Profit	1.37B	1.20B	1.08B	984.07M	933.42M
EBITDA	761.49M	663.81M	576.66M	554.93M	349.56M
Net Income	512.81M	429.38M	373.54M	392.08M	236.41M
Balance Sheet
Total Assets	1.72B	1.58B	1.44B	1.57B	1.61B
Cash, Cash Equivalents and Short-Term Investments	150.67M	136.78M	133.20M	195.35M	157.39M
Total Debt	2.24B	1.89B	1.89B	1.31B	907.64M
Total Liabilities	2.68B	2.26B	2.24B	1.68B	1.28B
Stockholders Equity	-962.68M	-687.99M	-801.95M	-110.94M	331.08M
Cash Flow
Free Cash Flow	624.08M	464.68M	503.42M	416.25M	342.93M
Operating Cash Flow	632.96M	468.92M	509.45M	423.82M	364.92M
Investing Cash Flow	-27.99M	-15.95M	-5.67M	137.85M	-24.58M
Financing Cash Flow	-592.92M	-455.00M	-547.16M	-523.57M	-289.42M

Fair Isaac Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1532.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TTD	77 Outperform	$42.12B	105.34	16.88%	―	25.07%	103.30%
DDOG	76 Outperform	$50.61B	324.61	6.48%	―	25.54%	40.02%
DT	74 Outperform	$16.36B	33.94	20.86%	―	18.75%	208.06%
WDAY	72 Outperform	$63.33B	133.48	5.70%	―	15.38%	-67.58%
FICO	67 Neutral	$37.38B	66.01	-47.82%	―	14.72%	21.81%
TEAM	67 Neutral	$52.61B	―	-34.33%	―	19.12%	-161.42%
Sector *	63 Neutral	$34.70B	5.15	-11.38%	1.67%	5.54%	-17.15%

Fair Isaac Corporate Events

Fair Isaac Secures $1 Billion Credit Facility

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.

Fair Isaac Launches $1.5 Billion Senior Notes Offering

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.