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Fair Issac’s FICO shares have outperformed the Zacks Computer & Technology sector and Zacks IT Services industry peers Infosys INFY and ServiceNow NOW in the year-to-date period.
Shares of FICO, Infosys and ServiceNow have soared 86.8%, 28.1% and 59.7%, respectively. The broader sector has appreciated 34.1% over the same timeframe.
The robust stock price performance can be attributed to the strong performance in its Scores and Software segments, which led to significant growth in its clientele and revenues.
In the fourth quarter of fiscal 2024, the Scores segment experienced a 27% revenue increase, driven largely by a remarkable 95% year-over-year growth in mortgage originations.
Fair Isaac Corporation Price and Consensus
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FICO Expands Market Reach With New Partnerships
FICO is riding on the strong adoption of its FICO Scores, which remains a dominant player in the consumer credit scoring market.
The robust market position is further supported by the adoption of FICO Score 10-T for non-GSE mortgages in fourth-quarter fiscal 2024, covering more than $244 billion in annual originations and $1.33 trillion in servicing. This is set to boost future revenues through enhanced credit decision-making and securitization.
FICO recently teamed up with Mortgage Capital Trading (MCT) to integrate FICO Score 10-T into MCT Marketplace, helping mortgage lenders and investors enhance credit risk management and offer more favorable loan terms.
Fair Issac’s expanding clientele is further highlighted by its partnership with Cognizant CTSH to launch a cloud-based real-time payment fraud prevention solution powered by FICO Falcon Fraud Manager. The collaboration aims to enhance security measures and streamline fraud detection for clients across various industries.
FICO and Cognizant’s joint offering leverages AI and machine learning to help banks and other payment service providers in North America protect their customers from fraud.
FICO Benefits From Strong Demand for the FICO Platform
In the fourth quarter of fiscal 2024, FICO also experienced a strong 31% year-over-year growth in platform Annual Recurring Revenue, driven by the adoption of FICO Platform products and services. The platform’s Net Revenue Retention was 123%, showcasing the expansion in usage among existing customers.
Further enhancing FICO’s market presence, FICO entered into two major platform partnerships, one with Tata Consulting Services and another with iSON Xperiences. These collaborations expand FICO’s reach while leveraging its platform for real-time decision-making solutions in targeted industries.