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Topic: Growth Stocks

FAIR ISAAC CORP. $112

FAIR ISAAC CORP. $112 (New York symbol FICO; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 31.2 million; Market cap: $3.5 billion; Priceto- sales ratio: 4.1; Dividend yield: 0.1%; TSINetwork Rating: Average; www.fico.com) is best known for its FICO Scores computer program, which helps lenders make better decisions about customer creditworthiness. It also makes software that helps credit card issuers control fraud and analyze cardholders’spending patterns.

In its fiscal 2016 second quarter, which ended March 31, 2016, Fair Isaac’s sales fell 0.2%, to $206.7 million from $207.1 million a year earlier. That’s mainly because it benefited from two large contracts last year.

The company sold more higher-margin products during the quarter. Earnings rose 18.4%, to $35.1 million from $29.7 million. Per-share profits rose 19.8%, to $1.09 from $0.91, on fewer shares outstanding.

Fair Isaac continues to spend around 12% of its revenue on research. That lets it produce innovative products to keep ahead of the competition.

Excluding unusual items, the company expects to earn $4.43 to $4.55 a share for all of fiscal 2016. The stock trades at a high 24.9 times the midpoint of that range. The $0.08 dividend yields 0.1%.

Fair Isaac is a hold.

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