FICO

Based on a comprehensive analysis, here is an assessment of whether FICO stock is worth buying.

Technical Analysis The technical picture is weak, with the stock showing significant underperformance and high volatility. Its sharp decline and position closer to its 52-week low than its high indicate it is in an oversold condition. While this might attract bargain hunters, the prevailing negative momentum suggests a clear downtrend is in place.

Fundamental Analysis Fundamentally, FICO is a paradox. It possesses exceptional profitability with very high margins, indicating a strong business model. However, this strength is contrasted by a negative shareholder equity, which distorts metrics like ROE, and a recent sequential decline in revenue that signals a potential growth slowdown.

Valuation & Risk Valuation is a major concern, as the stock trades at a significant premium with exceptionally high PE and PS ratios. This leaves little room for error and suggests investor expectations are very high. Coupled with a market beta above 1.3, the stock carries heightened volatility risk, meaning investors could experience substantial price swings.

**Recommendation: HOLD**

Based on the analysis, a buy recommendation is not warranted at this time. While FICO's core profitability is impressive, the combination of technical weakness, a premium valuation, and emerging concerns over top-line growth create significant headwinds. Investors should adopt a wait-and-see approach, monitoring for signs of revenue reacceleration and a more attractive valuation before considering a position. This is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month outlook for Fair Isaac Corporation (FICO):

12-Month Outlook for FICO:

The outlook for FICO hinges on its ability to reignite revenue growth to justify its premium valuation. Key catalysts include sustained demand for its core FICO® Scores and the adoption of higher-margin software solutions like the FICO® Platform. However, significant risks remain, primarily its exceptionally high valuation multiples (PE and PS ratios) which leave no room for disappointment, and its recent sequential revenue decline suggesting potential softening demand. Given these crosscurrents and the lack of a clear consensus analyst target, investors should anticipate a period of consolidation with high volatility, with a key resistance level likely forming around previous technical support zones.

Wall Street Consensus

Most Wall Street analysts are optimistic about FICO's 12-month outlook, with consensus target around $1616.29, indicating expected upside potential.

Overall, FICO has investment potential but also faces challenges. Here are key factors to weigh before investing.

FICO has experienced significant underperformance this quarter amidst heightened volatility, pressured by substantial selling pressure.

The stock's sharp 11.1% decline over one month and 5% drop over three months significantly lags the broader market, as confirmed by its -8.38% relative strength, indicating consistent underperformance. This negative momentum, coupled with a beta above 1.3, highlights its amplified volatility during the recent downturn.

While the current price sits above the 52-week low, its position substantially closer to the trough than the peak suggests the stock remains in an oversold technical condition. This is further evidenced by the deep 40.6% maximum drawdown from recent highs.

Of course. Here is a fundamental analysis of FICO based on the provided data.

1. Revenue & Profitability

FICO demonstrates exceptionally high profitability, as evidenced by a robust gross profit margin of approximately 82.3% and a net income margin of 30.1% for the quarter ending September 2025. This indicates the company has strong pricing power and low cost of revenue relative to its sales. However, revenue declined sequentially from $536.4 million to $515.8 million, suggesting a potential slowdown in top-line growth that warrants monitoring.

2. Financial Health

The company's financial health shows significant strain based on its capital structure. The debt-to-equity ratio is negative (-1.76), which is an unusual situation typically resulting from negative shareholder equity, often due to accumulated deficits or large share buybacks. While the interest coverage ratio of 5.95 isadequate, indicating earnings can service interest expenses, the negative equity and high debt ratios raise concerns about long-term financial stability.

3. Operational Efficiency

FICO exhibits strong operational efficiency in terms of profitability, with a healthy return on assets (ROA) of 8.3%. However, the return on equity (ROE) is negative (-8.9%), a direct consequence of the negative shareholder equity which distorts this metric. The asset turnover ratio of 0.28 suggests that the company is not highly efficient at generating revenue from its asset base, which is common for high-margin, intellectual property-based businesses like FICO.

Valuation Level

FICO's exceptionally high PE ratios (both TTM and forward above 57) and a very high PS ratio of 19.43 indicate significant overvaluation. The negative PB ratio is misleading due to negative book value, while the extremely high EV/EBITDA (157) and negative PEG ratio (-4.29) further confirm substantial overvaluation relative to current earnings and growth prospects.

Peer Comparison

Without industry average data, a direct peer comparison is not possible. However, the observed valuation metrics—particularly the PE ratios near 60 and PS ratio of 19.43—are exceptionally high by broad market standards, suggesting FICO trades at a significant premium. This elevated valuation level implies heightened investor expectations for future growth that may not be sustainable.

FICO exhibits notable volatility risk, with a beta of 1.293 indicating it is approximately 29% more volatile than the broader market. This amplified market sensitivity is further evidenced by a significant one-year maximum drawdown of -40.56%, suggesting the stock has experienced substantial price declines during recent market downturns. Investors should be prepared for potential sharp price swings that are more pronounced than the overall market.

Regarding other risks, while the absence of notable short interest can be interpreted as a lack of strong negative sentiment from sophisticated investors, this does not eliminate fundamental risks. The stock could still face headwinds from industry-specific challenges, such as the cyclicality of its core credit scoring business or regulatory changes affecting the financial data analytics sector. Furthermore, any inherent liquidity risks, while not specified here, should be assessed to ensure sufficient market depth for investment size.