Fair Isaac (FICO) Stock Forecast & Price Target

Fair Isaac Corporation is experiencing significant growth, demonstrated by a 16% year-over-year increase in ACV bookings in the first quarter of FY25, with expectations for ARR growth to accelerate to 30% by the fiscal year's end. The company's mortgage origination revenue skyrocketed by 110% year-over-year in 1Q25, indicating a robust recovery and increasing consumer engagement in the mortgage market, bolstered by forecasts of continued growth in mortgage originations. Additionally, Fair Isaac's software revenue has shown resilience with a 10.3% year-over-year growth, driven by a strong demand for analytics and decision-making tools, suggesting a solid foundation for ongoing profitability and expansion in both the Scores and Software sectors.

Fair Isaac Corporation is experiencing a negative outlook primarily due to persistently high interest rates and elevated inflation, which have contributed to a significant decline in US consumer confidence, impacting financial performance. Furthermore, a year-over-year decline of approximately 22% in annual contract value (ACV) bookings for the first half of fiscal 2024, combined with foreign exchange impacts and reduced customer care services usage, has led to a slowdown in platform annual recurring revenue (ARR) to 20%, down from over 30% in the previous fiscal year. Additionally, the reported earnings per share (EPS) of $5.79 fell short of estimates, signaling pressures on revenue and expenses, and indicating potential challenges for future software revenue due to the transition to a subscription-based model and changes in the mortgage market.