FICO — Fair Isaac Corp
Snapshot dated September 29, 2026.
Fair Isaac Corporation, commonly known as FICO, provides analytics and decision management software that enables businesses to automate and improve complex operational decisions. The company's most recognized product is the FICO Score, which functions as a standardized measure used by the vast majority of U.S. lenders to assess consumer credit risk. The business operates through two distinct segments: Scores, which licenses credit scoring models to financial institutions, and Software, which provides enterprise-level tools for fraud detection, customer acquisition, and loan origination. With 22.7 million shares outstanding and a market cap of $14.1B, FICO serves a broad client base ranging from large banking institutions and insurers to various government agencies. It occupies a position as the primary standard-setter in consumer credit scoring, while its software division competes against diverse analytics and decision-support providers. Recently, the company has prioritized migrating its software customers to the cloud-based FICO Platform to facilitate real-time decisioning.
Fair Value / Share
$934.00
Price on September 29, 2026
$620.85
Upside to fair value
50.44%
Margin of safety 33.5%
Upside is measured against what you pay; margin of safety is measured against what the business is worth.
Data by Equibles and SEC filings. Figures are as of September 29, 2026 and are not live.
Earnings Yield
Earnings Yield shows how much profit a company generates relative to its share price. EPS ÷ Stock Price.
Stock Price
$620.85
Market Cap
$14,095,044,035
Net Income (TTM)
$815,017,000
Diluted Shares
22.7 million
EPS (TTM)
$35.90
Earnings Yield
5.78%
AI Analysis
Fair Isaac Corporation currently has an earnings yield of 5.78%, derived from an EPS (TTM) of $35.90 and a stock price of $620.85. This figure sits above the 4-5% return generally available from safe, guaranteed alternatives like bonds. Mechanically, this indicates that the price paid per dollar of earnings is lower than it would be if the yield were closer to the benchmark. The yield would move higher if the stock price declined while earnings remained stable, or if earnings increased while the price stayed the same. This single measure does not account for the company’s future growth expectations, capital structure, or external shifts in its competitive environment.
Return on Capital
EBIT ÷ (Net Working Capital + Net Fixed Assets) — how efficiently the business turns capital into profit.
EBIT (TTM)
$1,236,298,000
Net Working Capital
$187,928,000
Net Fixed Assets
$90,988,000
Invested Capital
$278,916,000
Return on Capital
443.25%
AI Analysis
Fair Isaac Corp (FICO) generated an EBIT of $1.2B against $278.9M in invested capital, resulting in a return on capital of 443.25%. This figure sits significantly above the 30% benchmark for efficient use of capital. Such a high return indicates that the company produces substantial profit relative to the tangible operating assets required to run the business. This framework measures capital efficiency based on current operating profit and necessary assets, but it does not account for long-term investments in intangible assets like software development or brand equity that do not appear as fixed assets on the balance sheet. Changes in this ratio would occur if the company significantly increased its investment in physical property and equipment, or if operating margins contracted, altering the EBIT figure relative to the capital base.
Acquirer's Multiple
Enterprise Value ÷ Operating Earnings — how many years of operating earnings it would take to buy the whole business.
| Company | Operating earnings | Enterprise value | Multiple |
|---|---|---|---|
| FICOFair Isaac Corp | $1.2B | $19.4B | 15.7x |
| EFXEquifax Inc | $1.2B | $22.2B | 19.3x |
| TRUTransUnion | $848.2M | $17.4B | 20.6x |
Where FICO sits: 15.7x against a peer median of 19.9x (peers: 19.3x and 20.6x) — 21.2% below the median.
Show the enterprise value bridge for each companyHide the enterprise value bridge
FICO
Debt $5.6B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $15.6M of operating lease liabilities as of 2026-06-30. These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
EFX
Named as a competitor: Direct competitor in credit scoring, consumer credit reporting, and risk analytics
Debt $5.5B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. This filer tags no operating lease liability in any period the filings cover, so none is reported here.
TRU
Named as a competitor: Major credit bureau competing directly in credit risk decisioning and analytics solutions
Debt $5.6B. This is the company's reported total debt — borrowings due within a year plus long-term borrowings. The company separately reports $77.2M of operating lease liabilities as of 2026-03-31 ($58.1M non-current, $19.1M current). These are excluded from debt because operating lease cost already sits inside operating earnings — counting the liability again as debt would charge the business twice for the same thing.
Operating earnings — FICO
AI Analysis
The Acquirer's Multiple for FICO is 15.7x, based on an enterprise value of $19.4B and TTM operating earnings of $1.2B. For its competitors, EFX has an Acquirer's Multiple of 19.3x, derived from an enterprise value of $22.2B and operating earnings of $1.2B, while TRU shows a multiple of 20.6x, with an enterprise value of $17.4B and operating earnings of $848.2M. Among these, FICO holds the lowest multiple, while TRU holds the highest. FICO trades at 15.7x against a peer median of 19.9x (peers: 19.3x and 20.6x) — 21.2% below the median. This measure captures the ratio of the total price to buy the business relative to its core operating earnings, excluding distortions from debt or tax structures. The gap between these figures could narrow if the underlying operating earnings for these companies shift relative to one another, or if their respective enterprise values adjust to reflect changing market assessments of their business models.
FS-Score
A 10-check read on financial health, across profitability, balance-sheet stability and operating momentum.
FS-Score
8/10
This company scores high on profitability, stability, and momentum.
Section 1
Current Profitability
3/3
Fair Isaac shows strong current profitability, generating positive returns on its asset base and backing up its accounting profits with actual cash.
- Return on Assets is positive at 34.90%
- Free Cash Flow to Total Assets is positive at 41.21%
- The accruals check shows cash flow from operations is 1.19 times higher than net income
This section scores perfectly because the company is self-funding its operations and reporting high-quality earnings that are fully supported by cash flow.
Return on Assets (ROA > 0)
PassFree Cash Flow to Total Assets (FCFTA > 0)
PassAccruals (CFO / Net Income > 1)
PassSection 2
Stability
1/3
Stability measures are weak, as the company has taken on more debt and seen its short-term liquidity position decline over the last year.
- Leverage increased from 1.28 to 1.42 year over year
- The current ratio fell from 1.62 to 0.83 over the last twelve months
- Diluted shares decreased from 25.1 million shares to 24.6 million shares
The score in this section would improve if the company reduced its long-term debt relative to assets or increased its current assets relative to its current liabilities.
Change in Leverage (↓ or unchanged)
FailChange in Liquidity (↑ Current Ratio)
FailNet Dilution (annual diluted weighted-average shares, this year vs last)
PassSection 3
Recent Operational Improvements
4/4
The company shows strong operational momentum, with every efficiency and margin metric improving compared to the previous year.
- Return on Assets rose from 29.85% to 34.90%
- Free Cash Flow to Total Assets increased from 36.33% to 41.21%
- Gross Margin expanded from 79.73% to 82.23%
- Asset Turnover improved from 1 to 1.07
This perfect score reflects a business that is extracting more revenue and cash from its assets than it did a year ago.
Change in ROA (↑)
PassChange in FCFTA (↑)
PassChange in Gross Margin (↑)
PassChange in Asset Turnover (↑)
PassFramework conclusion
Fair Isaac earns a total score of 8/10, driven by strong profitability and operational improvements despite some weakness in its balance sheet stability. This high score suggests that if the stock were to trade at a low valuation, the price would more likely reflect a market mispricing than fundamental business deterioration. The measurement highlights a business that is becoming more efficient even as its debt levels rise and liquidity tightens.
- Return on Assets improved to 34.90% from 29.85%
- Asset Turnover increased from 1 to 1.07
- Current ratio decreased from 1.62 to 0.83
- Net dilution was negative as share count fell to 24.6 million shares
Intrinsic Value (DCF)
A 10-year discounted cash flow, then the bridge from business value to value per share.
Reported cash flow → unlevered free cash flow
Free Cash Flow (reported)
$996M
+ After-Tax Interest Expense
$143M
= Unlevered Free Cash Flow
$1.1B
Business value (10-year DCF)
PV of Years 1–10
$10B
PV of Terminal Value
$16.5B
= Business Value
$26.5B
Terminal value share
62.21%
Business value → share value
Intrinsic Value (business)
$26.5B
+ Cash & Equivalents
$248.4M
− Debt
$5.6B
= Shareholders' Value
$21.2B
÷ Diluted Shares
22.7 million
= Fair Value / Share
$934.00
Divided by 22.7 million diluted shares — the weighted-average diluted count from the most recent quarterly income statement, for the quarter ended 2026-06-30.
Risk bucket → discount rate
low (9%)
Year-1 FCF
$1.1B
Trailing twelve months.
FY2023 $464.7M · FY2024 $624.1M · FY2025 $769.9M
Growth rate (yrs 1–10)
8%
Terminal growth (after yr 10)
3%
AI Analysis
This valuation uses a low risk bucket and a 9% discount rate, reflecting Fair Isaac Corp's predictable, high-margin cash flows and established market position in credit scoring. We forecast an 8.00% annual growth rate over the next decade, grounded in the company's historical ability to expand free cash flow through pricing power and its growing software segment. The model seeds this forecast with a fixed Year-1 FCF of $1.1B, an unlevered figure applied consistently to all companies. The terminal growth rate is set at 3%, a fixed assumption for all valuations that represents long-run economic expectations rather than a specific business judgment. Because this valuation includes the company's cash and subtracts total debt of $5.6B to determine equity value, the final fair value per share is computed as $934.00. Against the current price of $620.85, this results in an upside to fair value of 50.44%. The margin of safety, representing the buffer in the estimate for potential error, is 33.5%. Notably, 62.2% of the total business value is derived from the terminal value, indicating that the majority of this estimate rests on assumptions about the business's performance well into the future. The final result is most sensitive to the 8.00% growth rate; even slight variations in that figure would materially alter the total valuation.
Overall Verdict
How the five signals above stack up together, then the full synthesis.
Earnings Yield
5.78% vs ~4-5% bond-yield benchmark
Return on Capital
443.25% ROC vs ~30% benchmark
Acquirer's Multiple
15.7x against a peer median of 19.9x (peers: 19.3x and 20.6x) — 21.2% below the median.
FS-Score
8/10 — Financial rockstar
Intrinsic Value
50.44% upside to fair value
These checks provide a snapshot of both operational efficiency and valuation. The Return on Capital of 443.25% and the FS-Score of 8/10 indicate a business generating substantial returns on its invested capital and maintaining a robust financial position. On the valuation front, the Acquirer's Multiple of 15.7x sits 21.2% below the peer median of 19.9x, while the Intrinsic Value shows a 50.44% upside to fair value. The Earnings Yield of 5.78% sits near the 4-5% bond-yield benchmark, representing a yellow signal that highlights a tension between the company's strong operational performance and the market's assessment of its cash-generating yield relative to safe alternatives. While the valuation indicators currently align with the favorable end of the spectrum, these measures are backward-looking or based on forward projections that do not account for external market shifts. If the Return on Capital were to decline significantly, it would alter the picture of the company's operational strength more than a change in any other single metric.
Comments
Notes from readers on FICO — one each. Comments stay with the company, so they carry across to a later snapshot, and each one shows the date it was written.
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