Fair Isaac To Buy Back $500M In Stock; Shares Spike 5%


Fair Isaac Corp. announced a stock repurchase program of up to $500 million, sending shares of the data analytics company up 4.8% to close at $486.47 on March 15.

Fair Isaac’s (FICO) announcement follows the completion of the company’s prior stock repurchase program, which was in effect from July 2020 through March 2021.

In January, Fair Isaac reported fiscal 1Q results. The company’s 1Q adjusted earnings climbed 52.2% year-over-year to $2.74 per share and outpaced Street estimates of $2.27. Meanwhile, revenues increased 4.7% to $312.4 million but fell short of analysts’ expectations of $319.64 million. (See Fair Isaac stock analysis on TipRanks)

On Jan. 29, Needham analyst Kyle Peterson increased the stock’s price target to $565 (16.1% upside potential) from $550 and maintained a Buy rating.

In a note to investors, Peterson said, “The company reported a solid Q1 EPS, though revenue was a touch light due to a change in the assumption behind revenue recognition for term license sales and a strategic de-emphasis of select professional services engagements.”

The analyst maintains a positive view on Fair Isaac “given the company’s dominant market position and attractive margin profile in the Scores business,” which he expects “to fuel double digit earnings growth over the next several years.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 2 Buys, 1 Hold, and 1 Sell. The average analyst price target of $538.33 implies 10.7% upside potential to current levels. Shares have gained 12.8% over the past six months.

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