FICO
Fair Isaac Corporation
$1,257.11
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 9.2% above fair value
You pay
$1,257.11
Bear
$603.46
Fair
$1,150.96
Bull
$1,810.46
Bear
$603.46
-52.0%
11% stage 1 growth, 11% discount
Fair
$1,150.96
-8.4%
18% stage 1 growth, 11% discount
Bull
$1,810.46
+44.0%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
45%
Implied Market Multiple
49.2x
Market is pricing in (growth)
21.0%
vs 18.2% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $1606.89 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $1150.96 per share.
Warnings
Wall Street's average price target is $1606.89 (from 19 analysts). Our estimate is 38% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions