Fair Isaac Corporation (NYSE: NYSE:FICO), known for its credit scoring services, received an updated price target from Oppenheimer.
The firm raised its price target on the stock to $2,109.00, up from the previous $1,967.00, while maintaining an Outperform rating. This adjustment reflects a positive outlook on the company's financial performance.
The revision of the price target is a result of increased earnings per share (EPS) estimates for the third quarter of 2024, with the figure going up from $6.27 to $6.58.
The analyst attributes this to higher revenue from the company's Scores segment and lower than anticipated expenses. The new estimate stands 5% higher than the consensus.
Additionally, Oppenheimer has adjusted its EPS predictions for the following years. For the fiscal years 2024, 2025, and 2026, estimates have been raised from $23.46, $29.36, and $35.13 to $23.78, $29.51, and $35.74, respectively. The revised price target of $2,109 is based on a 59x earnings multiple.
In other recent news, Fair Isaac Corporation, also known as FICO, has seen positive adjustments to its price target from financial services companies Jefferies and Wells Fargo. Jefferies raised its price target to $2,250, citing the robust mortgage sector as a driver for FICO's performance.
Wells Fargo also increased its price target for FICO to $2,200, noting potential benefits from pricing strategies. These adjustments reflect a positive outlook on FICO's future performance.
In recent developments, FICO has shown a strong performance in its third quarter of 2024, with revenues rising by 12% to $448 million compared to the previous year. The company's GAAP net income slightly decreased by 2% to $126 million, while non-GAAP net income rose by 9% to $156 million. FICO also reported a record free cash flow of $206 million for the quarter, marking a 69% increase from the previous year.
On the analyst front, firms including Wells Fargo, Oppenheimer, and UBS have shared their perspectives on FICO's performance and future outlook. UBS initiated coverage with a Neutral rating and a price target of $2,100, indicating a balanced view of the company's prospects.
TransUnion (NYSE:TRU), another player in the credit information industry, also saw an increase in its price target from Jefferies to $125, reflecting a positive outlook based on the strength of the mortgage sector. TransUnion reported an 8% revenue growth in the second quarter of 2024, surpassing expectations, and declared a regular quarterly cash dividend of $0.105 per share for the second quarter of 2024.
InvestingPro Insights
Fair Isaac Corporation's recent performance aligns with Oppenheimer's optimistic outlook. According to InvestingPro data, FICO's revenue growth stands at 12.28% for the last twelve months, with a robust gross profit margin of 79.35%. This strong financial performance is reflected in the stock's impressive 123.81% price return over the past year.
InvestingPro Tips highlight that FICO is trading near its 52-week high, with a strong return over the last month and three months, corroborating the positive sentiment expressed in the analyst's report. The company's high earnings multiple, as mentioned in another InvestingPro Tip, is consistent with Oppenheimer's 59x earnings multiple used for the price target calculation.
It's worth noting that FICO operates with a moderate level of debt and has liquid assets exceeding short-term obligations, which could provide financial flexibility as it pursues growth strategies in its scoring business.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for FICO, providing a deeper understanding of the company's financial health and market position.
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