Stock Analysis on Net
Stock Analysis on Net

Fair Isaac Corp. (NYSE:FICO)

This company has been moved to the archive! The financial data has not been updated since July 30, 2025.

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)

Fair Isaac Corp., free cash flow to the firm (FCFF) forecast

US$ in thousands, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 19.92%
01 FCFF0 680,645
1 FCFF1 886,862 = 680,645 × (1 + 30.30%) 739,557
2 FCFF2 1,127,969 = 886,862 × (1 + 27.19%) 784,384
3 FCFF3 1,399,535 = 1,127,969 × (1 + 24.08%) 811,579
4 FCFF4 1,692,946 = 1,399,535 × (1 + 20.96%) 818,664
5 FCFF5 1,995,205 = 1,692,946 × (1 + 17.85%) 804,574
5 Terminal value (TV5) 113,927,974 = 1,995,205 × (1 + 17.85%) ÷ (19.92% – 17.85%) 45,941,880
Intrinsic value of Fair Isaac Corp. capital 49,900,639
Less: Debt and finance lease liabilities (fair value) 2,192,657
Intrinsic value of Fair Isaac Corp. common stock 47,707,982
 
Intrinsic value of Fair Isaac Corp. common stock (per share) $1,987.53
Current share price $1,527.80

Based on: 10-K (reporting date: 2024-09-30).

1 See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Weighted Average Cost of Capital (WACC)

Fair Isaac Corp., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 36,672,786 0.94 20.85%
Debt and finance lease liabilities (fair value) 2,192,657 0.06 4.33% = 5.19% × (1 – 16.59%)

Based on: 10-K (reporting date: 2024-09-30).

1 US$ in thousands

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 24,003,656 × $1,527.80
= $36,672,785,636.80

   Debt and finance lease liabilities (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (20.13% + 22.44% + 20.74% + 17.13% + 8.01% + 11.08%) ÷ 6
= 16.59%

WACC = 19.92%

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

Fair Isaac Corp., PRAT model

Microsoft Excel
Average Sep 30, 2024 Sep 30, 2023 Sep 30, 2022 Sep 30, 2021 Sep 30, 2020 Sep 30, 2019
Selected Financial Data (US$ in thousands)
Interest expense, net 105,638 95,546 68,967 40,092 42,177 39,752
Net income 512,811 429,375 373,541 392,084 236,411 192,124
 
Effective income tax rate (EITR)1 20.13% 22.44% 20.74% 17.13% 8.01% 11.08%
 
Interest expense, net, after tax2 84,373 74,105 54,663 33,224 38,799 35,347
Interest expense (after tax) and dividends 84,373 74,105 54,663 33,224 38,799 35,347
 
EBIT(1 – EITR)3 597,184 503,480 428,204 425,308 275,210 227,471
 
Current finance lease liabilities 3,144 — — — 2,186 1,935
Current maturities on debt 15,000 50,000 30,000 250,000 95,000 218,000
Long-term debt, excluding current maturities 2,194,021 1,811,658 1,823,669 1,009,018 739,435 606,790
Non-current finance lease liabilities 7,263 — — — 3,076 3,489
Stockholders’ equity (deficit) (962,679) (687,990) (801,947) (110,942) 331,082 289,767
Total capital 1,256,749 1,173,668 1,051,722 1,148,076 1,170,779 1,119,981
Financial Ratios
Retention rate (RR)4 0.86 0.85 0.87 0.92 0.86 0.84
Return on invested capital (ROIC)5 47.52% 42.90% 40.71% 37.05% 23.51% 20.31%
Averages
RR 0.86
ROIC 35.33%
 
FCFF growth rate (g)6 30.30%

Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).

1 See details »

2024 Calculations

2 Interest expense, net, after tax = Interest expense, net × (1 – EITR)
= 105,638 × (1 – 20.13%)
= 84,373

3 EBIT(1 – EITR) = Net income + Interest expense, net, after tax
= 512,811 + 84,373
= 597,184

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [597,184 – 84,373] ÷ 597,184
= 0.86

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 597,184 ÷ 1,256,749
= 47.52%

6 g = RR × ROIC
= 0.86 × 35.33%
= 30.30%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (38,865,443 × 19.92% – 680,645) ÷ (38,865,443 + 680,645)
= 17.85%

where:

Total capital, fair value0 = current fair value of Fair Isaac Corp. debt and equity (US$ in thousands)
FCFF0 = the last year Fair Isaac Corp. free cash flow to the firm (US$ in thousands)
WACC = weighted average cost of Fair Isaac Corp. capital

FCFF growth rate (g) forecast

Fair Isaac Corp., H-model

Microsoft Excel
Year Value gt
1 g1 30.30%
2 g2 27.19%
3 g3 24.08%
4 g4 20.96%
5 and thereafter g5 17.85%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpolation between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= 30.30% + (17.85% – 30.30%) × (2 – 1) ÷ (5 – 1)
= 27.19%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= 30.30% + (17.85% – 30.30%) × (3 – 1) ÷ (5 – 1)
= 24.08%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= 30.30% + (17.85% – 30.30%) × (4 – 1) ÷ (5 – 1)
= 20.96%