Fair Isaac Stock Pulls Back to Support – Smart Entry?
Fair Isaac (FICO) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($1,554.82 – $1,718.48), levels from which it has bounced meaningfully before. In the last 10 years, Fair Isaac stock received buying interest at this level 3 times and subsequently went on to generate 32.9% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/9/2024 | 51.9% | 140 |
| 2/20/2025 | 27.8% | 88 |
| 5/28/2025 | 18.9% | 27 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For FICO Read Buy or Sell FICO Stock to see how convincing this buy opportunity might be.
Single stock can be risky, but there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 105% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.
Here are some quick data points for Fair Isaac that should help decision:
- Revenue Growth: 14.7% LTM and 10.9% last 3 year average.
- Cash Generation: Nearly 36.8% free cash flow margin and 44.2% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for FICO was 5.2%.
- Valuation: FICO stock trades at a PE multiple of 69.2
- Opportunity vs S&P: Compared to S&P, you get higher valuation, higher revenue growth, and better margins
For quick background, Fair Isaac provides analytic, software, and data management solutions that help businesses automate, enhance, and connect decisions through scoring and software products integrated into transaction streams.
| FICO | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Application Software | – |
| PE Ratio | 69.2 | 24.0 |
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| LTM* Revenue Growth | 14.7% | 5.2% |
| 3Y Average Annual Revenue Growth | 10.9% | 5.3% |
| Min Annual Revenue Growth Last 3Y | 5.2% | -0.1% |
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| LTM* Operating Margin | 44.2% | 18.6% |
| 3Y Average Operating Margin | 42.5% | 17.8% |
| LTM* Free Cash Flow Margin | 36.8% | 13.3% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
That said, FICO isn’t immune to big drops. It lost nearly 50% in the Dot-Com crash and around 51% during the Covid sell-off. The Global Financial Crisis was even tougher, with a 76% plunge. The 2018 correction and last year’s inflation shock also hit hard, pulling the stock down 29% and 38%, respectively. Solid fundamentals matter, but when markets turn, FICO shows you can still see steep declines.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read FICO Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.