This company provides analytical solutions, credit scoring and credit account management products and services to banks, credit reporting agencies, credit card processing agencies, insurers, retailers and healthcare organizations worldwide. It just launched a new fraud detection product and announced its intention to acquire InfoCentricity, a software-as-a-service (SAAS)-based predictive analytics software company.
Fair Isaac Corp. (FICO)
from Wall Street Stock Forecaster
Fair Isaac Corp. (FICO) makes FICO Scores, a computer program that helps businesses make better decisions about customer creditworthiness. The company also makes software that helps credit card issuers control fraud and analyze cardholder spending patterns.
In its fiscal 2014 first quarter, which ended December 31, 2013, Fair Isaac’s earnings fell 17.6% to $26.2 million, or $0.73 a share. A year earlier, it earned $31.8 million, or $0.88. Revenue fell 3.0%, to $184.3 million from $190.0 million. The declines mainly resulted from a big order in the year-earlier quarter.
The company also raised its research spending by 24.3% in the latest quarter, to $18.1 million (or 9.8% of revenue) from $14.6 million (or 7.7%) a year earlier.
That’s partly because it’s shifting some products to a cloud-based model, so it could sell them on a subscription basis. This would give Fair Isaac more-predictable revenue streams.
The stock has gained 19% in the past year and currently trades at an attractive 15.4 times the $3.51 a share that Fair Isaac should earn for all of fiscal 2014, and pays and $0.08 dividend.
Fair Isaac is a buy.
Patrick McKeough, Wall Street Stock Forecaster, www.tsinetwork.ca, 888-292-0296, March 28, 2014