10Y annualized return is
excellent
at 36.4% per year
FICO has met or exceeded earnings expectations in
some
recent quarters (5/10)
High Gross Profit Margin
Strong Net Profit Margin
Decent Operating Profit Margin
Strong Liquidity Ratios
Good Interest Coverage
Strong Financial Performance 📈
Market Leadership and Adoption of Innovations 🏆
Strong Cash Flow and Capital Return 💰
Growth Potential in Software Segment 🚀
Expansion of Buy Now Pay Later Data Integration 🔍
High Price-to-Earnings Ratio
Extremely High Price-to-Sales Ratio
Negative Return on Equity
High Debt Levels
Foreign Exchange Impact 🌍
Uncertainty in Macroeconomic Environment 🌪️
FICO demonstrates strong business quality through consistent financial performance, market leadership, and effective capital return strategies. Future prospects appear promising, particularly with software growth and integration of alternative data, despite some macroeconomic uncertainties.
Analysis Date: February 4, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Fair Isaac Corporation, often called FICO, creates software and tools that help businesses make better decisions. They provide services that help companies with tasks like finding new customers, preventing fraud, and managing accounts. FICO also offers credit scores that help businesses understand the financial reliability of their customers. In simple terms, FICO helps companies use data to improve their operations and make smarter choices.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
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Fair Isaac Corporation is a high-quality, global analytics firm with impressive revenue and profit growth, but its stock is currently overvalued. Desp...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$859.57
Current Market Price: $1676.73
IV/P Ratio: 0.51x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-95.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for FICO
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (74.98)
P/B ratio ≤ 1.5 (-35.85)
Current ratio ≥ 2.0 (1.80x)
Long-term debt < Net current assets (9.18x)
Margin of safety (-95.0%)
FICO does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
-56.94%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
80.14%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
30.66%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
FICO has a net profit margin of 30.66%, indicating that it retains a significant portion of its revenues as profit after all expenses.
An operating profit margin of 42.91% suggests that the company effectively manages its operating expenses relative to its revenues.
The return on equity is -59.39%, indicating that the company is not generating positive returns for its shareholders, which could deter potential investors.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
-2.15x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.80x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
Current and quick ratios of 1.80 suggest that FICO has a solid liquidity position and can cover its short-term liabilities comfortably.
An interest coverage ratio of 6.87 indicates that the company can comfortably meet its interest obligations, reflecting sound financial health.
The debt-to-assets ratio of 1.43 and a negative debt-to-equity ratio of -2.15 indicate that the company is heavily leveraged, which increases financial risk.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
FICO reported a strong financial quarter with revenues of $440 million, up 15% year-over-year, and GAAP net income of $153 million, up 26%. This reflects a solid business model that is growing and generating significant profit.
The adoption of FICO Score 10 T has been strong, with over $261 billion in annualized mortgage originations signed up for the new scoring model. This demonstrates FICO's competitive advantage and strong market position in the credit scoring industry.
FICO delivered free cash flow of $187 million in Q1 and $673 million over the last four quarters, showing the company's ability to generate cash. Additionally, the company is actively returning capital to shareholders through stock buybacks.
The company experienced a negative impact of approximately 2% on total ARR and 3% on platform ARR due to foreign exchange rates, which could affect growth in international markets.
FICO expects to accelerate ARR growth back to the 30% range in the software segment, driven by a strong pipeline of bookings and increased customer usage of their platform.
FICO is actively working to integrate Buy Now Pay Later data into their scoring models, which could enhance credit decisions and open new revenue streams.
FICO acknowledged the fluid macroeconomic environment and potential impacts of interest rate changes on the mortgage market, which could affect future revenue growth.