As of May 22, 2025, Fair Isaac Corp's estimated intrinsic value ranges from $176.52 to $820.62 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $820.62 | -52.0% |
| Discounted Cash Flow (5Y) | $695.50 | -59.3% |
| Dividend Discount Model (Multi-Stage) | $529.65 | -69.0% |
| Dividend Discount Model (Stable) | $777.07 | -54.5% |
| Earnings Power Value | $176.52 | -89.7% |
Is Fair Isaac Corp (FICO) undervalued or overvalued?
With the current market price at $1707.94, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Fair Isaac Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.6 | 0.87 |
| Cost of equity | 6.6% | 9.8% |
| Cost of debt | 4.9% | 5.0% |
| Tax rate | 18.9% | 20.4% |
| Debt/Equity ratio | 0.04 | 0.04 |
| After-tax WACC | 6.5% | 9.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $695 | $19,310M | 83.9% |
| 10-Year Growth | $821 | $22,355M | 70.6% |
| 5-Year EBITDA | $1,139 | $30,108M | 89.7% |
| 10-Year EBITDA | $1,240 | $32,563M | 79.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $517M |
| Discount Rate (WACC) | 9.5% - 6.5% |
| Enterprise Value | $5,427M - $7,929M |
| Net Debt | $2,382M |
| Equity Value | $3,046M - $5,547M |
| Outstanding Shares | 24M |
| Fair Value | $125 - $228 |
| Selected Fair Value | $176.52 |
| Metric | Value |
|---|---|
| Market Capitalization | $41571M |
| Enterprise Value | $43953M |
| Trailing P/E | 72.04 |
| Forward P/E | 71.37 |
| Trailing EV/EBITDA | 33.30 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.04 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $246.19 |
| Discounted Cash Flow (5Y) | 25% | $173.88 |
| Dividend Discount Model (Multi-Stage) | 20% | $105.93 |
| Dividend Discount Model (Stable) | 15% | $116.56 |
| Earnings Power Value | 10% | $17.65 |
| Weighted Average | 100% | $660.20 |
Based on our comprehensive valuation analysis, Fair Isaac Corp's weighted average intrinsic value is $660.20, which is approximately 61.3% below the current market price of $1707.94.
Key investment considerations:
Given these factors, we believe Fair Isaac Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.