Fair Isaac Earnings Preview

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Investors never know what to expect for Fair Isaac (NYS: FICO) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday. 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 five of six analysts rating it 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 to one of six for Fair Isaac. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $162.2 million in revenue this quarter. That would represent a rise of 4.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.61 per share. Estimates range from $0.60 to $0.63.

What our community says:
CAPS All-Stars are solidly backing the stock with 77.5% granting it an outperform rating. The community at large backs the All-Stars with 76.5% awarding it a rating of outperform. Fools have embraced 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 sentiment.

Management:
Fair Isaac's income has fallen year over year by an average of 7% over the past five quarters. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases.

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.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

71.2%

68.3%

70.6%

68.8%

Operating Margin

24.8%

12.6%

19.0%

17.8%

Net Margin

15.4%

5.1%

10.3%

10.2%

One final thing: If you want to keep tabs on Fair Isaac movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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