Fair Isaac Corp

FICO: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$4,946.00	Mylz	Qyplwgpzqb

Fair Isaac Corporation: Very Strong Business Model, but We Suggest Waiting for a Better Entry Point

Rajiv Bhatia

Jun 1, 2023

In initiating coverage on Fair Isaac Corporation, we peg its fair value estimate at $660 per share. Fair Isaac is best known for its FICO scores, and over three quarters of the firm’s profit is from its scoring segment as this segment has very high operating margins. Fair Isaac’s positive business attributes, including strong pricing power, are well appreciated by the market, in our view, and with shares currently trading at approximately $780 per share, we regard shares as moderately overvalued.

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How we make money

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

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Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.

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