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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Fair Isaac Corporation (XNYS:FICO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FICO
Name:
FAIR ISAAC CORPORATION (XNYS:FICO)
Sector:
123.99M
Industry:
Software�Application
CEO:
SECMr. William Lansing
Total Employees:
3,367
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -95.59% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF FAIR ISAAC CORPORATION(FICO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
439.78
One Month Price Target:
$442.78
Six Month Price Target :
$457.77
Likely Price in One Year's Time:
Ticker:
$475.77
Likely Trading Range Today Under (Normal Volatility)
$437.97
Price Upper limit ($) :
$442.23
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$414.35
This week:
$382.92
This month :
$326.06
Other Primary facts
Market Cap:
11.15B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
25.25M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.58%
-20.71%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$557.75
$503.41
$321.81
$376.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$485.72
Buy Put:
Sell Put:
$474.12
$393.69
$405.44
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FICO
Sharpe Ratio:
2.22%
Comparison:
FICO, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 129.83% higher than the industry
& is -2.81% lower than the market/S&P 500 average
Average Returns/Yield of
FICO
Daily returns:
0.07%
Weekly returns:
0.36%
Monthly returns:
1.44%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 73.88% above industry average
Classification:
FICO, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
FICO has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.85%
Weekly Volatility:
6.37%
Monthly Volatility:
12.75%
Yearly Volatility:
44.16%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.38%
Volatility in last five trading days has been -86.73% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.78%
Weekly VaR:
-12.93%
Monthly VaR:
-25.86%
How Much Can the price of
FICO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-89.58%
This translates to price declining to:
$342.84
This translates to price declining to:
$45.84
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FICO is a 82.51% riskier investment compared to the market/S&P 500 & is 56.35% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -20.70% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FICO
Beta in relation to market/S&P 500--1.22
Expected beta in 1 year's time:
1.005
Expected beta in 3 year's time:
1.421
Unlevered (debt free) Beta:
-0.86
Beta in relation to Nasdaq (XNAS):
1.15
Beta in relation to all global stocks::
1.051
Beta Comparison & Analysis
Beta of competitors/peers::
1.102
Beta is 10.55% higher than peers
Average Industry Beta:
1.335
Beta is -8.81% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.058
Alpha is -345.11% below industry average alpha yield
Alpha is 368% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FICO
Equity cost of capital:
0.115
Equity cost of capital is -6.56% below industry mean WACC
Unlevered (without debt) cost of capital:
-8.11%
Before-tax cost of debt:
2.96%
After-tax cost of debt:
2.34%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.34%
WACC is -89.40% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$53.55
Revenue growth rate per share of (3Y):
-20.63
Annual revenue growth rate is -73.64% below industry average
EPS:
$15.22
Expected Annual growth rate of EPS (3Y):
27.06%
Expected future EPS growth rate is -1.08% lower than the Software�Application industry
Free cash flow (FCF) per share:
$16.21
-
-
Debt per share
$64.12
EBITDA per share
$23.88
Valuation Analysis Today of
FICO
P/E Ratio:
32.2
P/E Ratio of Competitors/Peers:
22.92
P/E ratio is 40.47% higher than main peers & is -81.87% lower than the industry
Stock price/value with industry average P/E ratio: $2,703.04
FICO is -83.73% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
8.21
Price to sales ratio is -28.41% below the industry mean
P/B (Price to book value ratio):
-20.63
Price to free cash flow: 27.12
Price to free cash flow ratio is -71.72% lower than the industry
Net income growth rate (3Y):
184.67%
Net income growth rate is -24.37% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-300.81%
Net debt to equity ratio:
-282.76%
Debt to assets ratio:
110.66%
Net debt to assets ratio:
104.02%
Debt-to-asset ratio is 101.68% above industry average
Ability to repay debt:
Interest coverage ratio:
12.08
Interest coverage ratio is -77.25% less than industry average
Looking forward:
Debt growth rate:
57.31%
Annual debt growth is -94% lower than industry average debt growth rate
Debt repayment rate in last quarter: 32.73%
Analysis of Key Statistics
Correlation of price movement with the market:
0.732
Statistical significance of correlation:
FICO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is 45.52% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.013
Covariance of price movement with the market:
-0.021
Kurtosis
11.086
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.197
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
FICO
Gross Profit Margin Ratio:
312%
Operating Profit Margin Ratio:
42.68%
Operating profit margin is -322.76% lower than the industry
Net Profit Margin Ratio:
312%
Effective Tax Rate:
19.67%
Effective tax rate is -25.41% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-79.19%
Return on equity (ROE) is 505.45% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
29.13%
Return on assets (ROA) is -858.45% lower than the industry
Financial Leverage:
-9.4x
Current Ratio:
1.44
Current ratio is -52.07% below industry average
Cash Conversion Cycle (days):
47.7
Cash conversion cycle is -49.66% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
7.01%
In-depth Efficiency Analysis
Revenue generated per employee:
401.6K
Each employee generates 16% more revenue than industry average revenue per employee
EBITDA generated per employee:
179.1K
Each employee generates 1567% more EBITDA than industry average revenue per employee
Profit generated per employee:
126.6K
Each employee generates -826% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
36.8K
Each employee generates -574% less free cash flow than industry average revenue per employee
Assets/Capital per employee
297.4K
Each employee generates -574% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 2.84%
Growth rate in R&D investment/expenditure is 85.89% higher than the industry
Competitors/Peer firms of
FICO
PAGSEGURO DIGITAL LTD. (XNYS:PAGS)
LEIDOS HOLDINGS, INC. (XNYS:LDOS)
GODADDY INC. (XNYS:GDDY)
CERIDIAN HCM HOLDING INC. (XNYS:CDAY)
Bill.com Holdings Inc (XNYS:BILL)
ZENDESK, INC. (XNYS:ZEN)
TELEDYNE TECHNOLOGIES INCORPORATED (XNYS:TDY)
TYLER TECHNOLOGIES, INC. (XNYS:TYL)
BLACK KNIGHT, INC. (XNYS:BKI)
Current Analyst Ratings
Strong buy�8%
Buy�0%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
295.60M
1.06B
162.34M
-
399.56M
-
2.46M
564.36M
-
49.91M
22.55M
603.12M
577.21M
426.26M
530.66M
104.40M
426.26M
Statement of Cash Flow
Date:
Period:
5.23M
Differed Income Tax :
3.91M
Stock Based Compensation :
29.88M
Change in Working Capital :
- 4171.00K
Accounts Receivables:
58.43M
Other Working Capital:
- 47584.00K
Other Non-Cash Items:
5.08M
Net Cash Provided by Operating Activities:
124.88M
Investments in PP&E:
- 895.00K
Net Acquisitions:
2.26M
Purchases of Investments:
- 2763.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
162.16M
-
162.16M
260.16M
-
39.68M
462.00M
70.66M
787.26M
3.56M
35.24M
16.61M
87.99M
1.00B
-
1.46B
20.42M
65.00M
-
98.38M
137.99M
321.80M
1.62B
60.55M
1.68B
-
2.00B
265.00K
2.67B
- 77992.0K
- 3130674.00K
December 31, 2021 at 12:00:00 AM
859.95M
- 538299.00K
1.46B
-
1.68B
1.5B
129.00K
-
- 1272.00K
- 788000.00K
-
- 482755.00K
-
1.12B
- 155429.00K
- 1377.00K
- 33197.00K
162.16M
195.35M
124.88M
- 895.00K
123.99M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
FICO
2023
2024
2025
2026
2027
$563.86
$610.01
$659.93
$713.94
$772.36