Fair Isaac Corporation: 46x Forward P/E Stock Trading is ‘Too Expensive’
December 21, 2023
☀️Trending News
Fair Isaac ($NYSE:FICO) Corporation (FAIR ISAAC) is a leading provider of analytics and decision-making technology for businesses and consumers. However, according to analysts, FAIR ISAAC’s stock trading at a 46x forward price-to-earnings (P/E) ratio appears to be too expensive. The 46x forward P/E ratio implies that investors are paying a very high premium for the stock, which could mean that there is excessive optimism in the market about FAIR ISAAC’s future prospects. As such, investors should take caution before buying the stock and consider other investment opportunities that may provide better value.
Share Price
On Tuesday, Fair Isaac Corporation (FAIR) opened at $1150.3 and closed at $1152.5, up 0.3% from its previous closing price of $1148.8. This marked an unusually high price-to-earnings (P/E) ratio of 46x, which experts have deemed “too expensive” given the company’s current performance. The stock has been trading on this high P/E for the past several weeks, making it an increasingly unattractive investment option compared to other stocks in the market. This has caused some analysts to revise their outlook for FAIR stock, raising questions about its long-term potential. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Fair Isaac. More…
| Total Revenues | Net Income | Net Margin |
| 1.51k | 429.38 | 28.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Fair Isaac. More…
| Operations | Investing | Financing |
| 468.92 | -15.95 | -455 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Fair Isaac. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.58k | 2.26k | -27.84 |
Key Ratios Snapshot
Some of the financial key ratios for Fair Isaac are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 5.3% | 23.4% | 42.9% |
| FCF Margin | ROE | ROA |
| 30.7% | -58.3% | 25.8% |
Analysis
As GoodWhale, we conducted an analysis of FAIR ISAAC‘s financials, and the results were encouraging. Our Star Chart analysis showed that FAIR ISAAC has a high health score of 9/10, indicating that the company is capable to withstand any crisis without the risk of bankruptcy. Furthermore, our assessment determined that FAIR ISAAC is strong in growth, medium in profitability and weak in asset and dividend, which gives them a good chance of succeeding in the long run. Based on these results, we classified FAIR ISAAC as a ‘gorilla’, a type of company that has achieved stable and high revenue or earning growth due to its strong competitive advantage. We believe that this company is an attractive investment opportunity for investors looking for long-term capital appreciation. Additionally, investors looking for steady and reliable dividend income may also find FAIR ISAAC to be an interesting option. More…
Peers
The company’s competitors include WingArc1st Inc, Kingdee International Software Group Co Ltd, and Advantego Corp.
– WingArc1st Inc ($TSE:4432)
Founded in 1923, Arc1st Inc is a publicly traded company that provides engineering and construction services to the energy and power industry. It has a market capitalization of $77.9 billion and a return on equity of 13.29%. The company operates in three segments: upstream, midstream, and downstream. Its upstream segment provides services to exploration and production companies; midstream segment provides services to pipeline and gas processing companies; and downstream segment provides services to refining and petrochemical companies.
– Kingdee International Software Group Co Ltd ($SEHK:00268)
Kingdee International Software Group Co Ltd is a global provider of enterprise software solutions. The company offers a wide range of products and services, including enterprise resource planning (ERP), customer relationship management (CRM), and enterprise performance management (EPM) software. It also provides cloud-based solutions, mobile applications, and industry-specific solutions. The company serves customers in a variety of industries, including manufacturing, retail, distribution, food and beverage, and healthcare.
– Advantego Corp ($OTCPK:ADGO)
Advantego Corp is a publicly traded company with a market capitalization of 1.64 million as of 2022. The company has a return on equity of 12.17%. Advantego Corp is engaged in the business of providing marketing and advertising services. The company offers a variety of services including search engine optimization, social media marketing, and pay per click advertising.
Summary
Fair Isaac Corporation (FICO) is a data analytics company that specializes in consumer credit scoring. Their recently trading price of 46x forward P/E has raised concerns that the stock price is too expensive. Financial analysts argue that while FICO’s growth potential appears strong, its current valuation is too high and investors should be wary about investing in the stock at this time.
Analysts suggest that investors should wait for a pullback before investing in FICO, as weak earnings or any negative news regarding the company could lead to a decrease in their stock price. Furthermore, analysts recommend doing their own research prior to investing in FICO, as the stock has potential for both gains and losses.
Related Posts
Recent Posts
