Fair Isaac is Tuesday's IBD Stock Of The Day as the credit-scoring services firm and S&P 500 component broke out above a buy point Tuesday. FICO stock surged during market trade.
Montana-based FICO is a data analytics company, best known for its FICO score — a measure of consumer credit risk that is used by consumer lenders in the U.S. The company's two operating segments are "scores" and "software."
FICO's software business segment includes services such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance and other professional services.
In fiscal year 2022, FICO's score business made up around 51% of its total revenue while its software segment made up about 49%.
Analysts see earnings for the S&P 500 giant growing 20% in Q4 to $5.29 per share with revenue increasing 11% to $389 million. For the full fiscal year, Wall Street predicts EPS gaining 16% to $19.99 and sales jumping 11% to $1.52 billion.
Analysts also forecast solid EPS growth over the next four fiscal years, with earnings expected to reach $40.70 per share in 2027, according to FactSet.
S&P 500: FICO Stock Action
Shares of FICO rose 3.6% to 918.29 on Tuesday just clearing a 916.41 buy point from from a flat base with an official entry of 916.41, according to MarketSmith. FICO stock rebounded from the 50-day line in strong volume.
The stock has gained more than 50% in 2023, including nearly 6% in October. During effectively all of that run, the S&P 500 stock has been cradled by its 10-week moving average. FICO stock's relative strength line is also at new highs of 97.
At the end of September, HSBC initiated coverage of FICO with a reduce rating and 729 target price. The firm's view is that the market is too optimistic on FICO and is overvaluing the stock.
Earlier last month, Raymond James analyst Patrick O'Shaughnessy also initiated FICO stock coverage with an outperform rating and a 1,007 price target.
O'Shaughnessy wrote that although the S&P 50o stock has performed well over the past year, further upside remains as investors fully appreciate the pricing power, resilience and competitive position of the company's FICO credit score business.
The analyst added that FICO is a "unique and impressive" company with a sustainable double-digit earnings growth outlook that justifies a premium valuation.
FICO stock has a 97 Composite Rating out of a best-possible 99. The S&P 500 component also has a 97 Relative Strength Rating and a 96 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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