0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
Company Overview: Fair Isaac Corporation (NYSE: FICO) offers software and data management products and services that enable businesses to automate and connect decisions. Companies use its innovative solutions in over 120 countries to secure 2.6 billion payment cards from fraud, assist consumers in obtaining credit, and ensure that millions of airlines and rental cars arrive at their destinations on time. FICO holds over 200 US and foreign patents on its technologies, which it offers to businesses in financial services, telecommunications, health care, retail, and other industries.
FICO Details
Key Takeaways from FY21 (ended September 30, 2021)
Revenues & Gross Profit Key Highlights; Analysis by Kalkine Group
Recent Developments
Segment-Wise Revenue for FY21: Its revenue-generating operating segments are Scores and Software.
Balance Sheet & Liquidity Position
Key Metrics: In FY21, FICO's EBITDA and operating margins were 33.2% and 38.4%, higher than the industry median of 9.7% and 0.5%, respectively. Net margin stood at 29.8% vs. industry median of -4.1%.
Profitability and Leverage Profile; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 40.30% of the total shareholding, while the top 4 constitute the maximum holding. The Vanguard Group, Inc., and BlackRock Institutional Trust Co., N.A. hold the maximum stake in the company at 10.11% and 8.67%, respectively, as also highlighted in the chart below:
Top 10 Shareholders; Analysis by Kalkine Group
Risk Analysis
Outlook
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: Over the last twelve months, FICO corrected 20.49%. The stock is currently trading close to the mid-point of its 52-week range of USD 342.89 to USD 553.97. We have valued the stock using the EV/EBITDA multiple-based illustrative relative valuation method and arrived at a target price with an upside of low twenties (in percentage terms). We believe that the company can trade at a premium compared to its peer's average, considering its market dominance in the fintech space, robust profitability margins, and global market presence. We have taken peers like Black Knight, Inc. (NYSE: BKI) and Envestnet, Inc. (NYSE: ENV). Considering the decent bottom-line performance, strategic growth initiatives, various new customer announcements, positive outlook, and current valuation, we give a "Buy" recommendation on the stock at the current price of USD 415.00, up 0.67% as of December 20, 2021, at 10:42 AM ET.
FICO Technical Chart, Data Source: REFINITIV
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Technical Indicators Defined
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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