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Fair Isaac
(NYSE:FICO)
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Rating:67Neutral
Price Target:
$748.00
▼(-34.02% Downside)
Action:Downgraded
Date:10/06/26
The score is driven primarily by strong profitability and cash generation, supported by upbeat raised guidance and accelerating platform momentum. These positives are tempered by significant balance-sheet leverage/negative equity and currently weak technicals with the stock trading well below key moving averages; valuation is reasonable at ~19.8x earnings but lacks dividend support.
Positive Factors
Platform ARR expansion
Rapid platform ARR growth and 148% net retention indicate strong customer expansion and recurring demand for FICO’s decisioning products. This land-and-expand model can support durable software growth, improve revenue visibility, and gradually shift the business toward a scalable platform mix.
Negative Factors
High leverage
Debt has risen materially while interest expense is increasing, reducing financial flexibility despite strong cash generation. Near-term deleveraging needs may constrain capital allocation, and the heavily debt-supported structure leaves less cushion if operating conditions or revenue growth weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Platform ARR expansion
Rapid platform ARR growth and 148% net retention indicate strong customer expansion and recurring demand for FICO’s decisioning products. This land-and-expand model can support durable software growth, improve revenue visibility, and gradually shift the business toward a scalable platform mix.
Read all positive factors
Fair Isaac Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyFair Isaac (FICO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.42B
Dividend Yield0.06%
Average Volume (3M)904.50K
Price to Earnings (P/E)19.2
Beta (1Y)1.27
Revenue Growth24.09%
EPS Growth34.17%
CountryUS
Employees3,876
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)34.81
Shares Outstanding21,597,635
10 Day Avg. Volume1,857,364
30 Day Avg. Volume904,504
Financial Highlights & Ratios
PEG Ratio1.89
Price to Book (P/B)-20.78
Price to Sales (P/S)18.22
P/FCF Ratio47.12
Enterprise Value/Market Cap2.25
Enterprise Value/Revenue13.57
Enterprise Value/Gross Profit15.94
Enterprise Value/Ebitda25.62
Forecast
1Y Price Target
$1,204.14Price Target Upside6.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)49.82
Revenue Forecast (FY)$2.80B
Fair Isaac Business Overview & Revenue Model
Company Description
Fair Isaac Corporation, also known as FICO, delivers advanced analytics, software solutions, and data management services designed to help businesses optimize, automate, and interconnect their crucial decision-making processes. These offerings rea...
How the Company Makes Money
FICO generates revenue mainly through two primary streams: Scores revenue and Software revenue. (1) Scores: FICO earns money by licensing its credit scoring models—most notably the FICO Score—to credit bureaus and other partners that distribute sc...
Fair Isaac Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call highlights very strong financial performance (double-digit revenue and earnings growth), robust cash generation, record capital returns, and accelerating platform momentum and ARR — all of which drove an upward revision to FY guidance. Counterbalancing these positives are sector-specific headwinds (soft mortgage volumes due to higher rates), declines in legacy/non-platform revenues and professional services, elevated leverage with higher near-term interest expense, and ongoing competitive/operational risks (GSE certification delay for the DLP and score-shopping pressure from VantageScore). Overall, the positives (revenue/earnings growth, platform adoption, cash generation and strategic partnerships) outweigh the challenges, but there are clear near-term risks to monitor.Positive Updates
Strong Top-Line and Earnings Growth
Q3 revenue of $674 million, up 26% year-over-year; GAAP net income $237 million, up 30% YoY; GAAP EPS $10.45, up 41% YoY; non-GAAP net income $277 million, up 31% YoY; non-GAAP EPS $12.18, up 42% YoY.
Negative Updates
Mortgage Volume Headwinds and Sensitivity to Rates
Mortgage origination volumes grew only low single digits YoY and decelerated quarter-over-quarter; management cites elevated interest rates and affordability constraints keeping originations below historical norms and causing some quarter-to-quarter revenue pressure.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Top-Line and Earnings Growth
Q3 revenue of $674 million, up 26% year-over-year; GAAP net income $237 million, up 30% YoY; GAAP EPS $10.45, up 41% YoY; non-GAAP net income $277 million, up 31% YoY; non-GAAP EPS $12.18, up 42% YoY.
Read all positive updates
Company Guidance
FICO raised fiscal 2026 guidance to revenue of $2.53 billion (up ~20% y/y), GAAP net income of $850 million (up ~30%) and GAAP EPS of $36.86 (up ~39%), and non‑GAAP net income of $979 million (up ~33%) with non‑GAAP EPS of $42.43 (up ~42%); management also guided to a full‑year operating tax rate of 25–26% (effective tax rate ~24%), said Q4 operating expenses will be modestly higher (front‑loaded marketing for the Accenture partnership plus some one‑time restructuring), expects Q4 interest expense to be higher following a $1.5 billion term loan (total debt $5.58 billion at a 5.64% weighted average rate, cash and marketable investments $305 million), plans near‑term debt paydown while continuing to view buybacks as attractive after Q3 repurchases of $1.96 billion (1.705 million shares at an average $1,149), and noted strong cash generation (Q3 free cash flow $370 million; trailing four‑quarter FCF $961 million, +28%).Fair Isaac Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
28
Negative
Cash Flow
86
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.39B | 1.99B | 1.72B | 1.51B | 1.38B | 1.32B |
| Gross Profit | 2.04B | 1.64B | 1.37B | 1.20B | 1.08B | 984.07M |
| EBITDA | 1.27B | 951.19M | 761.49M | 663.81M | 560.74M | 538.83M |
| Net Income | 815.02M | 651.95M | 512.81M | 429.38M | 373.54M | 392.08M |
Balance Sheet | ||||||
| Total Assets | 2.04B | 1.87B | 1.72B | 1.58B | 1.44B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 248.44M | 134.14M | 150.67M | 136.78M | 133.20M | 195.35M |
| Total Debt | 5.60B | 3.07B | 2.24B | 1.90B | 1.91B | 1.33B |
| Total Liabilities | 6.13B | 3.61B | 2.68B | 2.26B | 2.24B | 1.68B |
| Stockholders Equity | -4.10B | -1.75B | -962.68M | -687.99M | -801.95M | -110.94M |
Cash Flow | ||||||
| Free Cash Flow | 996.02M | 769.88M | 607.41M | 464.68M | 503.42M | 416.25M |
| Operating Cash Flow | 1.00B | 778.81M | 632.96M | 468.92M | 509.45M | 423.82M |
| Investing Cash Flow | -52.60M | -43.72M | -27.99M | -15.95M | -5.67M | 137.85M |
| Financing Cash Flow | -885.88M | -750.33M | -592.92M | -455.00M | -547.16M | -523.57M |
Fair Isaac Technical Analysis
Negative
1133.70
Price Trends
969.93
Negative
1094.58
Negative
1191.87
Negative
Market Momentum
-97.92
Positive
30.99
Neutral
46.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FICO, the sentiment is Negative. The current price of 1133.7 is above the 20-day moving average (MA) of 807.45, above the 50-day MA of 969.93, and below the 200-day MA of 1191.87, indicating a bearish trend. The MACD of -97.92 indicates Positive momentum. The RSI at 30.99 is Neutral, neither overbought nor oversold. The STOCH value of 46.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FICO.
Fair Isaac Risk Analysis
Fair Isaac disclosed 30 risk factors in its most recent earnings report. Fair Isaac reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fair Isaac Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.85B | 16.83 | 11.28% | 0.92% | 8.08% | -18.39% | |
73 Outperform | $2.09B | 63.65 | 3.36% | ― | 8.57% | ― | |
72 Outperform | $5.86B | 18.76 | 48.90% | 0.57% | 3.60% | 48.92% | |
72 Outperform | $19.01B | 22.63 | 12.66% | 1.37% | 8.57% | 9.06% | |
70 Outperform | $13.72B | 101.41 | 10.03% | ― | 22.70% | 99.66% | |
67 Neutral | $14.42B | 19.18 | -33.43% | 0.06% | 24.09% | 34.17% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Fair Isaac Corporate Events
Business Operations and StrategyFinancial Disclosures
Fair Isaac launches major restructuring to embed AI focus
Negative
Oct 6, 2026
On October 1, 2026, Fair Isaac Corporation’s management approved a broad restructuring plan aimed at reducing organizational layers, simplifying operations, optimizing processes and tools, and embedding AI-driven product development more dee...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.