Fair Isaac (FICO)
Technology · NYSE · US
Fundamentals
Valuation and ratings
Fair Isaac trades at $1,241.22, close to the $1,213.52 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 71 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 39.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Fair Isaac
Fair Isaac Corporation provides analytics software in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Scores and Software. The Scores segment offers business-to-business scoring solutions and services 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. Its 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, 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. In addition, the company offers analytic and decisioning software comprising FICO Decision Modeler, FICO Blaze Advisor, FICO Xpress Optimization, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Business Outcome Simulator, and FICO Decision Optimizer; pre-configured solutions consisting of FICO Fraud Solutions, FICO Originations, FICO Customer Communication Service, FICO Strategy Director, and FICO TRIAD Customer Manager; and professional services software, including FICO Implementation Services and FICO Analytic Services. It 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.
FICO passes 3 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
18 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$1.20B · 0.2% of book
- Valley Forge Capital, Valley Forge Capital Management, LP$821.30M · 24.3% of book
- Kensico Capital, KENSICO CAPITAL MANAGEMENT CORP$411.00M · 8.4% of book
- Chuck Akre, AKRE CAPITAL MANAGEMENT LLC$388.33M · 6.3% of book
- Lindsell Train, Lindsell Train Ltd$266.27M · 8.5% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Fair Isaac (FICO) undervalued?
Against our discounted cash flow estimate of $1,213.52, FICO at $1,241.22 is 2% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own FICO?
18 of the institutions we track reported a position in FICO in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is FICO's P/E ratio?
FICO trades at 39.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for FICO, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.