Value Stock: FICO

Most people have heard the term “FICO score” but few know that it is tabulated by a business called Fair Isaac Corporation (FICO), otherwise now called FICO. FICO is a value stock with a price-to-book ratio of just 2.1.

FICO helps consumers manage their credit through its consumer website. It also provides analytics and decision management to clients in 80 countries to help them reduce fraud, manage credit risk, and meet regulatory demands.

FICO Met Estimates for the Fiscal Fourth Quarter 2010

On Nov 3, FICO reported its fiscal fourth quarter results and met the Zacks Consensus Estimate of 41 cents. The company made just 35 cents in the year ago quarter. It has surprised 2 out of the last 4 quarters and met once.

Revenue rose 2% to $155.1 million from $151.9 million in the year ago period. 2 out of the company’s three segments saw revenue increases, with the Tools Revenue rising 13%.

The company saw general stabilization in the business despite “continued macroeconomic challenges.”

Bookings for the fourth quarter rose to $105.6 million compared to $85.9 million a year ago. Bookings are contracts signed in the quarter which may generate future revenue streams. So while you can look at them as good things to come, bookings aren’t necessarily reliable either.

Outlook for Fiscal 2011

FICO provided earnings per share guidance for fiscal 2011 of between $1.63 and $1.68 per share.

The 2011 Zacks Consensus Estimate has risen to $1.64 from $1.63 in the last 30 days. This is earnings growth of 12.9%.

FICO’s Value Characteristics

FICO has a forward P/E of 14.4, which is well under its peers at 25.6x. This is, however, just under the value cut off I use of 15x.

The company has a solid return on equity (ROE) of 12.4%, in line with its peers at 12.3%.

FICO is a Zacks #1 Rank (strong buy) stock.

FAIR ISAAC INC (FICO): Free Stock Analysis Report

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