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Fair Isaac (FICO) Rides on Solid Portfolio, Expanding Clientele
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Fair Isaac (FICO - Free Report) has been benefiting from the strong adoption of the FICO Platform and FICO Score. Its growing clientele has been a key catalyst, driving top-line growth. In first-quarter fiscal 2024, revenues increased 10.8% year over year, with Software and Scores revenues increasing 13.8% and 7.9%, respectively.
FICO’s analytics and digital decisioning technology are helping its clients fight financial crime. Per a recent survey of 1000 Americans conducted by Fair Isaac, fraud and identity protection are top concerns of customers, which banks need to address while delivering more personalized experiences to increase customer trust.
Globally, banks are recognizing the potency of Fair Isaac’s offerings to combat financial crime. Nedbank, one of South Africa’s leading banks, through strategic collaboration with FICO, has established the Risk Intelligence Centre (RIC), which aimed at consolidating various financial crime risk factors into a unified framework.
The RIC serves as a centralized repository, leveraging FICO technology to streamline processes such as relationship offboarding and account closures due to financial crime concerns. By consolidating data from multiple sources and committees, the RIC provides a comprehensive view of risk, empowering Nedbank to make informed decisions across the organization.
The key to the success of this initiative is the FICO Identity Resolution Engine, which enables Nedbank to establish robust identity resolution capabilities. This technology facilitates the clustering of links between individuals and organizations, which is crucial for identifying potential criminal activities and mitigating risks effectively.
Fair Isaac’s focus on strengthening the effectiveness of the FICO platform has been noteworthy. Early this year, it announced more than 20 enhancements to the FICO platform that allow enterprises to integrate data and analytics into operational decision-making strategies. This is expected to further boost the adoption rate.
FICO has also partnered with SAM Corporate, one of the largest providers of fintech solutions in the Middle East, to bring advanced decisioning capabilities to businesses in India and the Middle East. Leading Indian banks, including HDFC Bank, Axis Bank and AU Small Finance, have already adopted the FICO Platform.
FICO Score Gaining Traction
Fair Isaac is benefiting from the strong adoption of its FICO Scores. The most updated scores — FICO Score 10 and 10 T — were launched by Fair Isaac in January 2020, while FICO Score 9 and FICO Score 8 are the most distributed scores currently.
Expanding usage of FICO Score 10 and 10T benefits top-line growth. Cardinal Financial recently adopted FICO Score 10 T for non-conforming mortgage loans. The lender is also the first to plan to issue a United States Department of Veterans Affairs Mortgage-Backed Security using FICO’s newest and most predictive scoring model.
Premier Lending, a family-owned Charlotte, NC-based mortgage leader, is using FICO Score 10 T to enhance its non-conforming loan origination efforts, as well as acquisitions of mortgage whole loans.
Moreover, Primis Bank, an FDIC-insured and backed institution, is the first bank to adopt FICO Score 10 T for its non-confirming mortgage products.
The expanding clientele bodes well for FICO’s top-line growth trajectory in 2024. Fair Issac expects total revenues of $1.675 billion for this fiscal year.
The Zacks Consensus Estimate for revenues is pegged at $1.72 billion, indicating year-over-year growth of 13.45%. The consensus mark for fiscal 2024 earnings is pegged at $24.04 per share, unchanged over the past 30 days.
Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
FICO shares have underperformed the Zacks Computer & Technology sector in the year-to-date period. While FICO shares have gained 10%, the broader sector has returned 11.7%.
Image: Shutterstock
Fair Isaac (FICO) Rides on Solid Portfolio, Expanding Clientele
Fair Isaac (FICO - Free Report) has been benefiting from the strong adoption of the FICO Platform and FICO Score. Its growing clientele has been a key catalyst, driving top-line growth. In first-quarter fiscal 2024, revenues increased 10.8% year over year, with Software and Scores revenues increasing 13.8% and 7.9%, respectively.
FICO’s analytics and digital decisioning technology are helping its clients fight financial crime. Per a recent survey of 1000 Americans conducted by Fair Isaac, fraud and identity protection are top concerns of customers, which banks need to address while delivering more personalized experiences to increase customer trust.
Globally, banks are recognizing the potency of Fair Isaac’s offerings to combat financial crime. Nedbank, one of South Africa’s leading banks, through strategic collaboration with FICO, has established the Risk Intelligence Centre (RIC), which aimed at consolidating various financial crime risk factors into a unified framework.
The RIC serves as a centralized repository, leveraging FICO technology to streamline processes such as relationship offboarding and account closures due to financial crime concerns. By consolidating data from multiple sources and committees, the RIC provides a comprehensive view of risk, empowering Nedbank to make informed decisions across the organization.
The key to the success of this initiative is the FICO Identity Resolution Engine, which enables Nedbank to establish robust identity resolution capabilities. This technology facilitates the clustering of links between individuals and organizations, which is crucial for identifying potential criminal activities and mitigating risks effectively.
Fair Isaac Corporation Price and Consensus
Fair Isaac Corporation price-consensus-chart | Fair Isaac Corporation Quote
Fair Isaac’s focus on strengthening the effectiveness of the FICO platform has been noteworthy. Early this year, it announced more than 20 enhancements to the FICO platform that allow enterprises to integrate data and analytics into operational decision-making strategies. This is expected to further boost the adoption rate.
FICO has also partnered with SAM Corporate, one of the largest providers of fintech solutions in the Middle East, to bring advanced decisioning capabilities to businesses in India and the Middle East. Leading Indian banks, including HDFC Bank, Axis Bank and AU Small Finance, have already adopted the FICO Platform.
FICO Score Gaining Traction
Fair Isaac is benefiting from the strong adoption of its FICO Scores. The most updated scores — FICO Score 10 and 10 T — were launched by Fair Isaac in January 2020, while FICO Score 9 and FICO Score 8 are the most distributed scores currently.
Expanding usage of FICO Score 10 and 10T benefits top-line growth. Cardinal Financial recently adopted FICO Score 10 T for non-conforming mortgage loans. The lender is also the first to plan to issue a United States Department of Veterans Affairs Mortgage-Backed Security using FICO’s newest and most predictive scoring model.
Premier Lending, a family-owned Charlotte, NC-based mortgage leader, is using FICO Score 10 T to enhance its non-conforming loan origination efforts, as well as acquisitions of mortgage whole loans.
Moreover, Primis Bank, an FDIC-insured and backed institution, is the first bank to adopt FICO Score 10 T for its non-confirming mortgage products.
The expanding clientele bodes well for FICO’s top-line growth trajectory in 2024. Fair Issac expects total revenues of $1.675 billion for this fiscal year.
The Zacks Consensus Estimate for revenues is pegged at $1.72 billion, indicating year-over-year growth of 13.45%. The consensus mark for fiscal 2024 earnings is pegged at $24.04 per share, unchanged over the past 30 days.
Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
FICO shares have underperformed the Zacks Computer & Technology sector in the year-to-date period. While FICO shares have gained 10%, the broader sector has returned 11.7%.
NVIDIA (NVDA - Free Report) , Meta Platforms (META - Free Report) and Synopsys (SNPS - Free Report) are some better-ranked stocks in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Year to date, shares of NVDA, META and SNPS have gained 84.2%, 43.5% and 17%, respectively.
Long-term earnings growth rates for NVIDIA, Meta Platforms and Synopsys are currently pegged at 30.93%, 19.5% and 17.51%, respectively.