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Bozeman, Montana-based Fair Isaac Corporation (FICO) is a prominent software company that develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions. With a market cap of $38.5 billion, Fair Isaac operates through Scores and Software segments. It is expected to announce its Q3 earnings after the market closes on Wednesday, July 31.
Ahead of the event, analysts expect Fair Isaac to report a profit of $5.33 per share, up 15.1% from $4.63 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS estimates in three of the past four quarters while missing on one other occasion. Its EPS of $5.09 for the last reported quarter exceeded the consensus estimates by 4.1%.
Looking ahead to fiscal 2024, analysts expect Fair Isaac to report an EPS of $19.73, up 24.5% from $15.85 in fiscal 2023. In fiscal 2025, its EPS is projected to grow 28.9% year over year to $25.44.
FICO stock is up 34% on a YTD basis, significantly outperforming the S&P 500 Index’s ($SPX) 13.8% gains and the S&P 500 Technology Sector SPDR’s (XLK) 12.2% returns over the same time frame.
Fair Isaac’s stock has outpaced the broader market thanks to its strong brand, sound financial health, and strategic expense management. The iconic FICO Score has been a key growth driver.
On April 25, Fair Isaac unveiled its stronger-than-expected Q2 earnings results, which sent its stock on a winning streak. While Q2 revenue rose 14.1%, net income jumped 27.8%. The Scores segment, with a 19.3% revenue increase, highlighted the company’s upward trajectory. Focusing on high-margin software and cost efficiency has bolstered profit margins.
Additionally, a $243.5 million share repurchase in the last reported quarter underscores the company’s confidence in its long-term prospects and commitment to enhancing shareholder value.
The consensus opinion on Fair Isaac stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 11 analysts covering the stock, six recommend a “Strong Buy,” two advise a “Moderate Buy,” and the remaining three analysts suggest a “Hold” rating. Over the past month, a new “Strong Buy” recommendation was added to the consensus rating.
Although Fair Isaac is currently at a premium to its average target price of $1,434.42, the Street-high target price of $1,850 hints at a potential upside of 18.6% from current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
