Fair Isaac Corporation (FICO) DCF Valuation
Why we don't show a single “fair value” for FICO
Even the optimistic scenario of a conservative trailing-FCF model ($469.25) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$1,179.19 is justified only if free cash flow grows about +40.8% a year (fading to 2.5% long-run) at a 10.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 9.6%/yr | 11.5% | $234.52 |
| Base case | 12.6%/yr | 10.5% | $332.85 |
| Optimistic | 15.6%/yr | 9.5% | $469.25 |
| Analyst DCF (FMP) | independent reference — different model | $530.22 | |
Current Price
$1,179.19
Market-Implied Growth
+40.8%/yr
vs +14.1% 5Y actual
Base-Case Model Value
$332.85
model output — not a price target
FICO DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for FICO (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $555.4M · 0.02B shares · net debt $2.9B
Estimated Fair Value
$510.46
-56.7% vs $1179.19
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 12.6%/yr FCF growth and 10-year horizon fixed. Green = above today's $1179.19; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.5% | $673 | $714 | $762 | $819 | $888 |
| 9.5% | $556 | $585 | $618 | $656 | $700 |
| 10.5% | $466 | $487 | $510 | $537 | $568 |
| 11.5% | $395 | $411 | $428 | $447 | $469 |
| 12.5% | $338 | $349 | $362 | $377 | $393 |
About Fair Isaac Corporation
Fair Isaac Corporation, also known as FICO, delivers advanced analytics, software solutions, and data management services designed to help businesses optimize, automate, and interconnect their crucial decision-making processes. These offerings reach clients across the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. The company operates through two main divisions: Software and Scores. The Software segment provides pre-configured decision management solutions catering to a variety of business challenges and operations, including marketing strategy, account creation, customer relations, engagement, fraud detection, financial crime compliance, and debt collection, alongside related professional services. Key among its offerings is the FICO Platform, a modular software suite built to support sophisticated analytical and decision-making applications. This segment also supplies stand-alone analytical and decisioning software that customers can customize for a broad spectrum of business needs. Conversely, the Scores segment offers both business-to-business (B2B) and business-to-consumer (B2C) solutions. Its B2B scoring services empower corporate clients with analytics that can be integrated directly into their transaction flows and decision frameworks. For individual consumers, the segment provides B2C scoring via offerings such as myFICO.com subscriptions. FICO markets its diverse product and service portfolio primarily through its dedicated direct sales force, various indirect distribution channels, and its online presence. Established in 1956 as Fair Isaac & Company, Inc., the company officially adopted the name Fair Isaac Corporation in July 1992 and maintains its headquarters in Bozeman, Montana.
- Sector
- Technology
- Industry
- Software - Application
- CEO
- William J. Lansing