FICO Corp emerges as one of Best Tech Stocks with 52% YTD Gains

Tech stocks have remained the darling of investors in 2024. Semiconductor run and AI boom   propelled a huge number of Technology stocks. But, there are also a group of technology firms which specializes in IT Services and Analytics that have witnessed increased buying since second quarter. A double digit stock price growth in the April-June quarter made Fair Isaac Corp (FICO) and YTD stock price growth of 52% made FICO Corp one of the best tech stocks of 2024. FICO is listed on NYSE and part of S&P500 index stocks.

In month of July there were very few technology stocks which remained positive or delivered positive price gains. Fair Isaac Corp (FICO) was one such stock which rose by 7% in July when magnificent seven stocks were in negative price growth zone.    

In between January and July, FICO stock has gained 41% which is similar to Meta stock performance but higher than IBM’s 17%, and Apple’s 24% price gain. NVIDIA still remains the best performing tech stock of 2024 with 123% YTD gains as on July end despite 6% decline in the stock price during month of July.

Financial Performance

• In Jun quarter, FICO reported 12.3% Y-o-Y rise in its revenue to $ 447.8M.
• FICO’s EBITDA grew by 7.6% Y-o-Y to $194M. However, the company’s Net Income declined marginally by -1.9% in the June quarter to $126M.
• FICO managed to increase its earnings per share (EPS) by over 10% to $6.25 in Jun quarter.

Factors driving FICO’s revenue: Product, Innovation and Global Expansion

Pricing Strategy: FICO has leveraged its pricing strategy to boost revenue. FICO Scores, Its largest revenue stream, saw a 13% increase in revenue, with pricing being a significant driver.

Demand for Credit Scores: The demand for credit scores and analytics continues to grow, particularly in financial services. This segment generated approximately $773.83 million in the last fiscal year.

Demand for Automation: FICO enables automation through its Enterprise Decision Management (EDM) solutions. These solutions have wide application across various industries, including financial services, insurance, telecommunications, retail, and healthcare.

Demand for Fraud Detection & Risk Mgmt: Frauds are rising in the digital ecosystem, hence the demand for fraud detection and risk management has increased considerably.

Global Expansion: FICO has been expanding its presence in international markets due to its capability to meet diverse compliance demand across the globe, which has contributed to its revenue growth.