Yahoo Finance Fair Isaac (FICO) Rides on Solid Portfolio, Expanding Clientele
Fair Isaac FICO shares have gained 24.8% year to date, outperforming the Zacks Computer & Technology sector’s return of 16.4%. It has been benefiting from the strong adoption of the FICO Score and FICO Platform.
The most updated FICO 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 10 T by the mortgage industry is particularly noteworthy. Since 2023, clients with more than $100 billion in annualized mortgage originations and roughly $300 billion in eligible mortgage portfolio servicing have signed up for the FICO Score 10 T.
Paramount Residential Mortgage Group (PRMG), a multi-channel mortgage lender, is the latest addition to FICO’s clientele. PRMG recently embraced FICO Score 10 T, which has already been adopted by the likes of Liberty Home Mortgage, Movement Mortgage, CrossCountry Mortgage, Primis Mortgage, a subsidiary of Primis Bank and Premier Lending Inc. (Premier Lending).
FICO Score 10 T enhances lending precision, aiding lenders in managing credit risk and default rates more effectively. It promises up to a 5% increase in mortgage originations without additional credit risk or a reduction in default risk and losses by up to 17%. This precision in credit scoring is pivotal for lenders to project cash flow more accurately and make competitive credit offers.
Fair Isaac Corporation Price and Consensus
Fair Isaac Corporation price-consensus-chart | Fair Isaac Corporation Quote
FICO’s Solutions Helping Clients Fight Financial Crime
FICO’s analytics and digital decisioning technology are helping its clients fight financial crime. Per a 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.
FICO’s recent survey of Indian, Indonesian and Malaysian customers also identified fraud protection as their top consideration for selecting financial services providers.
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 aims to consolidate 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. The key to the success of this initiative is the FICO Identity Resolution Engine, which enables Nedbank to establish robust identity resolution capabilities.
Its expanding partner base is noteworthy. FICO recently inked a partnership with Cognizant CTSH to launch a cloud-based real-time payment fraud prevention solution powered by FICO Falcon Fraud Manager.
FICO-Cognizant joint offering leverages AI and machine learning to help banks and other payment service providers in North America protect their customers from fraud.
The expanding clientele bodes well for FICO’s top-line growth trajectory in 2024. Fair Issac expects total revenues of $1.69 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 $23.90 per share, down 8 cents over the past 30 days.
Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
Arista Networks ANET and Alphabet GOOGL 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 ANET and GOOGL have gained 34.2% and 27.2%, respectively.
Long-term earnings growth rates for Arista Networks and Alphabet are currently pegged at 15.68% and 17.21%, respectively.
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