FICO
FICO
$1086.00
-0.55%
Fair Isaac Corporation (FICO) is a leading applied analytics company operating in the Software - Application industry, primarily known for its ubiquitous FICO credit scores which serve as the benchmark for consumer creditworthiness in the United States. The company is a dominant market leader and near-monopoly in the credit scoring ecosystem, with its US-centric scores business generating the majority of its revenue and profits, complemented by a growing software segment focused on analytics, decision-making, and fraud solutions for financial institutions. The current investor narrative is dominated by a significant stock price correction and debate over its valuation, as the stock has fallen sharply from its highs, potentially driven by concerns over competition from AI-driven lending platforms like Upstart, as highlighted in recent news, and questions about the sustainability of its premium multiples amidst a broader market rotation.…
FICO
FICO
$1086.00
Related headlines
FICO 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on FICO's 12-month outlook, with a consensus price target around $1411.80 and implied upside of +30.0% versus the current price.
Average Target
$1411.80
6 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
6
covering this stock
Price Range
$869 - $1412
Analyst target range
Analyst coverage for FICO is limited, with only 6 analysts providing estimates, which is relatively sparse for a company of its market cap and suggests it may be under-followed by the broader institutional community. The consensus sentiment, based on institutional ratings, appears neutral to bullish, with recent actions from firms like Baird (Outperform), Wells Fargo (Overweight), and Goldman Sachs (Buy) indicating maintained confidence, though firms like JP Morgan and UBS have Neutral stances. The average target price or specific Buy/Hold/Sell distribution is not provided in the data, making it impossible to calculate implied upside or downside; the wide range of analyst estimates for future EPS (low: $81.61, high: $91.70 on revenue estimates between $3.65B and $3.99B) signals a high degree of uncertainty regarding the company's near-term financial performance. The pattern of recent ratings shows no downgrades, only reiterations, which could be interpreted as analysts holding firm on their views despite the severe price decline, but the limited coverage and lack of a clear consensus target price point to elevated volatility and less efficient price discovery for the stock.
Bulls vs Bears: FICO Investment Factors
The investment debate for FICO is a stark clash between deteriorating technical momentum and resilient fundamental strength. Currently, the bearish technical evidence is stronger, as the stock's 48% decline, high volatility (beta 1.38), and lack of a reversal pattern dominate near-term price action. However, the bullish fundamental case—anchored by 16% revenue growth, 83% gross margins, and a forward P/E of 19x—provides a compelling counter-argument for value-oriented investors. The single most important tension is whether the threat from AI-driven competitors like Upstart represents an existential risk to FICO's monopoly (justifying the crash) or is an overhyped narrative that has created a buying opportunity in a still-dominant, highly profitable business. The resolution of this competitive narrative will determine if the stock is a falling knife or a deep-value turnaround.
Bullish
- Dominant Market Position: FICO's credit scores are the US industry benchmark, creating a near-monopoly with powerful network effects. This is evidenced by the core Scores segment generating $304.53M in the last quarter, underpinning the company's 82.96% gross margin.
- Strong Revenue & Profit Growth: The company's fundamentals remain robust despite the stock crash. Q1 2026 revenue grew 16.36% YoY to $511.96M, while net income was $158.37M, demonstrating the underlying business strength is intact.
- Attractive Forward Valuation: The stock's severe correction has compressed its forward P/E to 19.21x, down from a trailing P/E of 55.64x. This forward multiple is reasonable for a company with its growth and profitability profile, suggesting a potential valuation floor.
- Exceptional Profitability Metrics: FICO's business model is exceptionally profitable, with an 82.96% gross margin and a 45.72% operating margin. This high-margin, asset-light model generates substantial free cash flow, with TTM FCF of $735.08M.
Bearish
- Severe Technical Downtrend: The stock is in a deep bear market, down 48.27% over the past year and 29.23% over the past 3 months. Trading at 47% of its 52-week high with a beta of 1.38, it has shown extreme volatility and persistent selling pressure with no clear reversal signal.
- Competitive Disruption from AI: Recent news highlights institutional investment in AI-driven lending platforms like Upstart, posing a long-term threat to FICO's scoring monopoly. This narrative of technological disruption is a key driver of the valuation de-rating and investor skepticism.
- Elevated Trailing Valuation: Despite the crash, the trailing P/E of 55.64x remains at a premium and is above the midpoint of its historical range (23.84x to 88.36x). This indicates the market may still be pricing in perfection, leaving room for further multiple compression if growth falters.
- Weak Liquidity & Negative Equity: The balance sheet shows a current ratio of 0.83, indicating potential short-term liquidity constraints. Furthermore, a negative debt-to-equity ratio of -1.76, while an accounting artifact, signals an equity base eroded by buybacks or deficits, which could limit financial flexibility.
FICO Technical Analysis
The stock is in a pronounced and severe downtrend, with a 1-year price change of -48.27%, trading near the lower end of its 52-week range. Based on a current price of $1,035.5 and a 52-week high of $2,217.6, the stock is trading at approximately 47% of its 52-week range, indicating it is deeply oversold and potentially presenting a value opportunity, though the persistent downward momentum suggests it could still be a 'falling knife.' Recent momentum shows no signs of recovery, with the stock down -29.23% over the past 3 months and -2.49% over the past month, indicating the selling pressure has continued unabated and the short-term trend is aligned with the longer-term bearish trajectory, with no meaningful divergence to signal a reversal. Key technical support is at the 52-week low of $870.01, while resistance is at the 52-week high of $2,217.6; a breakdown below the 52-week low would signal a continuation of the bear market, while any recovery would face immense overhead supply. The stock's beta of 1.376 indicates it is approximately 38% more volatile than the broader market (SPY), which has compounded losses for investors during this downturn, as evidenced by a relative strength of -77.31% over the past year.
Beta
1.23
1.23x market volatility
Max Drawdown
-58.2%
Largest decline past year
52-Week Range
$870-$2218
Price range past year
Annual Return
-49.0%
Cumulative gain past year
| Period | FICO Return | S&P 500 |
|---|---|---|
| 1m | +17.7% | +8.6% |
| 3m | -20.3% | +6.7% |
| 6m | -37.5% | +9.8% |
| 1y | -49.0% | +26.6% |
| ytd | -33.9% | +8.3% |
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FICO Fundamental Analysis
Revenue growth remains robust, with the most recent quarterly revenue of $511.96 million representing a 16.36% year-over-year increase, and segment data shows both the core Scores ($304.53M) and Applications ($207.43M) businesses contributing to this expansion. The multi-quarter trend shows revenue growing from $433.81M in Q2 2024 to $511.96M in Q1 2026, indicating a consistent upward trajectory, which underpins a strong fundamental investment case despite the stock's technical weakness. The company is highly profitable, with net income of $158.37 million in the last quarter and a stellar gross margin of 82.96%, demonstrating the powerful economics of its analytics and software business model. Operating margins are also strong at 45.72%, and while net income has fluctuated quarter-to-quarter, the underlying profitability remains intact, with the net margin for the period at 30.93%. The balance sheet shows a negative debt-to-equity ratio of -1.76, which is an accounting artifact typically resulting from accumulated deficits or share buybacks reducing equity, but the company generates substantial free cash flow, with TTM FCF of $735.08 million. The current ratio of 0.83 indicates potential short-term liquidity constraints, but the strong and consistent operating cash flow generation, evidenced by $174.08 million in the last quarter, provides ample internal funding for growth and shareholder returns via buybacks.
Quarterly Revenue
$511959000.0B
2025-12
Revenue YoY Growth
+0.16%
YoY Comparison
Gross Margin
+0.82%
Latest Quarter
Free Cash Flow
$735084000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is FICO Overvalued?
Given the company's substantial net income of $158.37 million, the primary valuation metric is the Price-to-Earnings (PE) ratio. The trailing PE is 55.64x, while the forward PE is significantly lower at 19.21x, indicating the market expects a substantial earnings rebound or growth acceleration in the coming year to justify the current price. Compared to industry averages, the trailing PE of 55.64x is at a significant premium, though the forward multiple of 19.21x appears more reasonable; however, without a provided industry average PE, the premium/discount assessment is qualitative, but the high trailing multiple suggests the market has historically priced in exceptional growth and profitability. Historically, the stock's own trailing PE has ranged dramatically, from a low around 23.84x in mid-2021 to a high of 88.36x in late 2024; the current 55.64x sits above the midpoint of this range, suggesting the valuation, while down from recent peaks, is not yet at deeply distressed levels and may still reflect optimistic expectations for a recovery.
PE
55.6x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 24x~88x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
41.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: FICO's primary financial risk is its elevated valuation, with a trailing P/E of 55.6x, which demands sustained high growth. A slowdown in its core Scores segment, which drove $304.5M last quarter, would severely pressure earnings and justify further multiple compression. While free cash flow generation is strong ($735M TTM), the negative equity (-1.76 D/E) and a current ratio of 0.83 indicate a balance sheet with limited cushion for aggressive investment or share buybacks if operating cash flow weakens.
Market & Competitive Risks: The paramount market risk is the accelerating narrative of competitive disruption from AI-powered lending platforms, as highlighted by recent institutional investment in Upstart. This threatens FICO's near-monopoly status and could lead to a permanent de-rating of its valuation multiples. Furthermore, the stock's high beta of 1.38 makes it 38% more volatile than the market, amplifying losses during downturns, as seen in its -77% relative strength over the past year. Trading at a premium trailing P/E, it remains vulnerable to sector rotation out of growth stocks.
Worst-Case Scenario: The worst-case scenario involves a confirmed loss of market share to AI competitors, triggering a simultaneous earnings miss and a derating of its forward P/E toward its historical low of ~24x. This could be exacerbated by a broader market downturn. Such an event chain could drive the stock to re-test and break its 52-week low of $870, representing a potential downside of approximately -16% from the current price of $1,035.5. In an extreme bear market, a drawdown matching its maximum of -58% could theoretically push the stock toward the $650 range, though this is a less probable tail risk.
