Fair Isaac may be overvalued with mixed growth prospects, but the 8 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $623.0 to $807.0 per share, for an average of $714.38. At today's price of $654.94, Fair Isaac is trading -8.32% away from its average target price, suggesting there is an analyst consensus of some upside potential.
Fair Isaac Corporation develops data management, software and analytics products and services that enable companies to automate, improve and connect decisions in North America, Latin America, Europe, the Middle East, Africa and Asia Pacific. The large-cap Technology company is based in Bozeman, MT. Fair Isaac has offered a 0.0% dividend yield over the last 12 months.
Fair Isaac has a trailing twelve month P/E ratio of 44.74, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of 22.81, the company has a forward P/E ratio of 28.71. Based on the 41.4% average annual growth rate of Fair Isaac's historical and projected earnings per share, the company's PEG ratio is 1.08. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 13.05%, which gives us a PEG ratio of 3.43. This suggests that these shares are overvalued.
Furthermore, Fair Isaac is likely overvalued compared to its book value, since its P/B ratio of 82.33 is higher than the sector average of 6.23.
If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its strong cash flows. Furthermore, Fair Isaac has wide margins as you can see in the financial summary below, indicating the company is highly profitable..
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $1,160 | $1,295 | $1,376 | $1,310 |
| Revenue Growth | n/a | 11.59% | 6.31% | -4.81% |
| Gross Margins | 70.96% | 72.1% | 75.84% | 76.93% |
| Gross Margins Growth | n/a | 1.61% | 5.19% | 1.44% |
| Operating Margins | 21.86% | 22.86% | 36.73% | 41.41% |
| Operating Margins Growth | n/a | 4.57% | 60.67% | 12.74% |
| Earnings Per Share | $6.64 | $8.13 | $14.22 | $14.85 |
| EPS Growth | n/a | 22.44% | 74.91% | 4.43% |
| Diluted Shares (MM) | 29 | 29 | 28 | 25 |
| Free Cash Flow (MM) | $236 | $343 | $416 | $503 |
| FCF Growth | n/a | 45.08% | 21.38% | 20.94% |
| Capital Expenditures (MM) | $24 | $22 | $8 | $6 |
| Net Debt / EBITDA | 2.57 | 2.09 | 1.99 | 3.04 |
