Fair Isaac Corp. (NYSE:FICO)

The company exhibits notable fluctuations across its valuation multiples over the analyzed six-year period from 2019 to 2024. These ratios provide insight into market perceptions relative to earnings, operating profit, sales, and book value.

Price to Earnings (P/E) Ratio

The P/E ratio starts at 49.99 in 2019 and rises to 56.83 in 2020, indicating increased market expectations relative to earnings. It then declines sharply to 27.12 in 2021 and slightly rises to 29.67 in 2022, suggesting a moderation in price relative to earnings during these years. However, this ratio surges again to 54.13 in 2023 and nearly doubles to 99.26 in 2024, reflecting a significant increase in market valuation relative to earnings in the most recent years.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio follows a similar broader pattern to the P/E ratio. Starting at 37.88 in 2019, it increases to 45.39 in 2020, then falls to 21.03 in 2021 and further to 20.43 in 2022. Subsequently, it rises again to 36.15 in 2023 and sharply climbs to 69.38 in 2024. This pattern indicates that market valuation relative to operating profits softened in the middle years but has experienced strong growth recently.

Price to Sales (P/S) Ratio

The P/S ratio shows moderate volatility with an upward overall trend. It begins at 8.28 in 2019, peaks at 10.38 in 2020, drops slightly to 8.08 in 2021, then remains stable at 8.05 in 2022. From 2023 onwards, there is a marked increase to 15.36 and then to 29.64 in 2024, reflecting rapidly rising market expectations relative to sales in the latter period.

Price to Book Value (P/BV) Ratio

Data is only available for 2019 and 2020, where the ratio rises from 33.14 to 40.58. This suggests increasing market valuation relative to book value during this period, although no trend analysis is possible for the later years due to missing data.

Overall, the valuation multiples indicate a significant escalation in market expectations relative to earnings, operating profit, and sales from 2023 to 2024. Earlier years showed a decline or stabilization in these ratios, suggesting fluctuations in market sentiment or changes in financial performance. The recent spikes may point toward heightened investor optimism or potential overvaluation dynamics in the latest period analyzed.

Share Price

The share price demonstrates a strong upward trend overall, increasing significantly from $331.59 in 2019 to $2090.63 in 2024. A notable rise occurred between 2022 and 2023, where the price more than doubled from $443.77 to $940.43, followed by an even steeper increase in the following year, nearly doubling again to exceed $2000. This reflects a considerable appreciation in market valuation over the observed period.

Earnings per Share (EPS)

EPS shows a continuous and steady increase from $6.63 in 2019 to $21.06 in 2024. This indicates consistent growth in profitability per share, with particularly rapid growth observed between 2020 and 2021, and a sustained upward trajectory thereafter. The rising EPS supports the positive valuation trend seen in the share price.

Price-to-Earnings Ratio (P/E)

The P/E ratio presents more volatility compared to share price and EPS. It started high at 49.99 in 2019, rising further to 56.83 in 2020, then significantly dropped to 27.12 in 2021. After a slight increase to 29.67 in 2022, it surged again to 54.13 in 2023 and reached an unusually high level of 99.26 in 2024. This fluctuation indicates periods where the market price grew disproportionately relative to earnings, especially in the last two years, suggesting heightened investor expectations or potential overvaluation.

The financial data indicates notable trends in share price, operating profit per share, and the price-to-operating profit (P/OP) ratio over the six-year period.

Share Price

The share price exhibits a general upward trajectory with fluctuations. Starting at $331.59 in 2019, it increased significantly to $461.72 in 2020, then declined to $388.61 in 2021. Subsequently, the price recovered and rose to $443.77 in 2022, followed by a substantial increase to $940.43 in 2023 and a remarkable surge to $2090.63 by 2024. This rapid appreciation in the most recent years suggests heightened investor confidence or market factors favoring the company.

Operating Profit per Share

The operating profit per share reflects steady growth throughout the period. Starting at $8.75 in 2019, it rose consistently each year, reaching $10.17 in 2020, $18.48 in 2021, $21.72 in 2022, $26.01 in 2023, and $30.13 in 2024. This continuous increase indicates improving operational efficiency and profitability on a per-share basis.

Price-to-Operating Profit (P/OP) Ratio

The P/OP ratio shows significant variability over the years. It started at 37.88 in 2019, increased to a peak of 45.39 in 2020, then dropped markedly to around 21 in 2021 and 20.43 in 2022. This decline suggests that share price growth was somewhat slower than growth in operating profit per share during this period, indicating better valuation relative to profitability. However, the ratio rebounded to 36.15 in 2023, before spiking sharply to 69.38 in 2024. The high ratio in 2024 may reflect market expectations of accelerated future profits or possible overvaluation relative to current operating performance.

Overall, the company shows strong growth in operating profit per share, while the share price has demonstrated substantial increases, especially in the last two years. The fluctuating and ultimately very high P/OP ratio in 2024 may warrant careful examination regarding the sustainability of market valuation in relation to operating profitability.

Share Price

The share price exhibited a general upward trend over the period analyzed. Starting at 331.59 US dollars in September 2019, it increased substantially to 461.72 in 2020. After a slight decline to 388.61 in 2021, it recovered somewhat to 443.77 in 2022. A marked surge is observed thereafter, with the price more than doubling by 2023 to 940.43 and then more than doubling again in 2024 to reach 2090.63. This indicates strong investor confidence or market valuation growth in the latter years.

Sales per Share

Sales per share demonstrated consistent growth over the entire period. Starting at 40.06 US dollars in 2019, sales per share increased steadily each year, reaching 44.49 in 2020, 48.12 in 2021, 55.14 in 2022, 61.24 in 2023, and ultimately 70.54 in 2024. This upward trajectory suggests improving company revenue generation on a per-share basis, indicating positive operational performance.

Price-to-Sales (P/S) Ratio

The P/S ratio experienced fluctuations but showed an overall increasing trend, especially notable in the latest years. Initially, the ratio stood at 8.28 in 2019, rising to a peak of 10.38 in 2020. It then modestly declined to 8.08 and 8.05 in 2021 and 2022 respectively. However, starting 2023, the ratio escalated sharply to 15.36 and then almost doubled in 2024 to 29.64. This pronounced increase suggests that the market valuation is growing at a faster pace than sales, indicating elevated investor expectations or increased market optimism about future growth prospects.

The annual financial data reveals significant fluctuations and distinct trends in both the share price and book value per share (BVPS) from 2019 to 2024.

Share Price

The share price shows a general upward trend across the period, with notable volatility. Starting at $331.59 in 2019, it increased substantially to $461.72 in 2020. There was a decline in 2021 to $388.61, followed by a recovery to $443.77 in 2022. The growth accelerated noticeably in the last two years, with the share price more than doubling to $940.43 in 2023 and then surging further to $2,090.63 by 2024. This substantial increase in share price in the latter years indicates a strong market valuation despite other financial metrics.

Book Value Per Share (BVPS)

The BVPS presents a contrasting trajectory. It started positively at $10.01 in 2019 and improved moderately to $11.38 in 2020. However, from 2021 onwards, the BVPS turned sharply negative, recording -$4.06 in 2021, a deeper decline to -$32.11 in 2022, a slight improvement but still negative at -$27.84 in 2023, and further deterioration to -$39.54 in 2024. This consistent negative BVPS in the last four years signals a potential accumulation of liabilities or significant reductions in net asset values.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio is available only for 2019 and 2020, standing at 33.14 and 40.58 respectively. These very high ratios suggest that the market price was valued drastically higher than the book value during these years. The omission of subsequent P/BV values is likely due to the negative BVPS, which makes the calculation of a meaningful P/B ratio infeasible or irrelevant.

In summary, the data portrays a scenario where the share price has greatly appreciated over the six-year period, reaching an exceptionally high value by 2024. Conversely, the company’s book value per share has deteriorated into negative territory and worsened over time. This divergence may imply that market optimism, investor sentiment, or expectations about future growth outweighs the underlying net asset base as reflected in the book value. Caution is advised in interpreting these metrics in isolation, and a deeper analysis of the balance sheet components and market conditions would be warranted to understand the drivers behind such financial performance.