Fair Isaac Earnings Preview

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Fair Isaac (NYS: FICO) didn't hit the Street's expectations last quarter, but investors hope that it will rebound this quarter. The company will unveil its latest earnings on Wednesday, Aug. 3. Fair Isaac provides products and services that enable businesses to automate, improve, and connect decisions to enhance business performance.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Fair Isaac, with four of seven analysts rating it a hold. Analysts don't like Fair Isaac as much as competitor ACI Worldwide overall. Five out of seven analysts rate ACI Worldwide a buy, compared with two of seven for Fair Isaac.
  • Revenue forecasts: On average, analysts predict $156.3 million in revenue this quarter. That would represent a rise of 0.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.54 per share. Estimates range from $0.51 to $0.56.

What our community says:
CAPS All-Stars are solidly behind the stock, with 75.6% assigning it an "outperform" rating. The community at large agrees with the All-Stars, with 76.7% giving it a rating of "outperform." Fools are bullish on Fair Isaac, though the message boards have been quiet lately, with only 59 posts in the past 30 days. Fair Isaac's bearish CAPS rating of one out of five stars falls short of the Fool community's sentiment.

Management:
Fair Isaac's income has fallen year over year by an average of 14.6%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

QuarterQ2Q1Q4Q3
Gross Margin68.3%70.6%68.8%70.8%
Operating Margin12.6%19%17.8%20%
Net Margin5.1%10.3%10.2%11.5%
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