Stock of the Day

October 21, 2020

Fair Isaac (FICO)

$1,697.04
-$28.50 (-1.7%)
Market Cap: $42.13B

About Fair Isaac

Fair Isaac Corporation develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers 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 predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. It offers FICO Customer Analytics, FICO Responsible AI, FICO Advisors, FICO Business Outcome Simulator, FICO Forecaster, FICO TRIAD Customer Manager, FICO Blaze Advisor, FICO Xpress Optimization, FICO Falcon Fraud Manager, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Decision Optimizer, and FICO Strategy Director, as well as software implementation and configuration services. The company 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.

Fair Isaac Bull Case

Here are some ways that investors could benefit from investing in Fair Isaac Co.:

  • Fair Isaac Co. has a consensus rating of "Moderate Buy" from analysts, indicating positive sentiment and potential for stock appreciation.
  • The average target price for Fair Isaac Co. is $2,078.15, suggesting significant upside potential from the current stock price of $1,752.55.
  • Despite recent stock sales by insiders, the company maintains a strong market capitalization of approximately $42.80 billion, reflecting its robust market position.
  • Fair Isaac Co. reported a net margin of 30.66%, indicating strong profitability relative to its revenue, which is attractive for investors seeking stable returns.
  • The company has a history of strong performance, with a 52-week high of $2,402.51, showcasing its potential for recovery and growth in the market.

Fair Isaac Bear Case

Investors should be bearish about investing in Fair Isaac Co. for these reasons:

  • Fair Isaac Co. recently reported earnings per share (EPS) of $4.15, which missed analysts' expectations of $6.21, raising concerns about its short-term financial performance.
  • The company has a negative return on equity of 53.40%, suggesting that it is not effectively generating profit from its equity, which could deter potential investors.
  • Insider selling activity has been notable, with executives selling significant shares, which may signal a lack of confidence in the company's near-term prospects.
  • The stock has experienced volatility, with a recent trading price of $1,752.55, down from its 52-week high, indicating potential instability in the market.
  • With a P/E ratio of 80.43, the stock may be considered overvalued compared to its earnings, which could pose a risk for investors looking for value opportunities.

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