FICO - Fair Isaac Corporation

FICO is aggressively buying back shares and has strong earnings prospects. He wants to buy more if the stock price declines, as he expects continued outperformance.

Has pricing power but leveraged buybacks become costly if rates rise; likely to manage through price increases.

Wants to buy more but waiting for dip around $1000. Stock rebounded to $1300. Waiting for a specific event this summer that could cause a 10% drop.

FICO has a monopoly in credit scoring, strong pricing power, and is executing massive buybacks. Despite regulatory fears, fundamentals are improving with record margins and revenue growth. The forward P/E of 24 is cheap historically, and the host expects the stock to double.

Nour mentions he recently purchased FICO, citing its superior 30% annual EPS growth compared to Booking's 15%, at a forward P/E of 20 versus Booking's 16. He views FICO as having a better risk-reward profile due to its significantly higher growth rate.

Creator is extremely bullish on FICO's aggressive management, pricing power, massive buyback program, and 98% market share dominance. He states he wants to buy more, has been buying the dip, and draws parallels to a successful contrarian position he took in 2021. He views the stock as very cheap.

Creates FICO scores in the US — a form of language. 98% market share vs VantageScore's 2% after 20 years. Growing revenue since gaining pricing power in 2018. Revenue, net income, free cash flow all up. Massive buybacks. Forward P/E of 21-22. Christophe is a shareholder and wants to buy more. Regulatory pressure is a short-term issue.

FICO at 5% of portfolio, described as one of the best risk-reward opportunities. Stock is down 50% from highs (YTD -28%) due to regulatory worries about price gouging and Vantage Score competition. He sees zero actual business impact from regulatory pressures. Margins are at all-time highs (score segment margins 91%), revenue reaccelerating since 2018, and the company just increased buybacks by $1.5 billion (5% of the company in one day). He sees history rhyming with his 2021 purchase when the stock quadrupled. Extremely bullish, wants the stock to drop below $900 to buy more.

Host is extremely bullish, citing the aggressive $2B buyback program (largest in company history) as a strong signal from management that the stock is deeply undervalued. He draws direct parallels to 2021 when a similar buyback pattern preceded a 5x rally from $400 to $2,000. FICO doubled its prices driving massive revenue/EPS growth, guidance was raised to 23% revenue and 35% EPS growth, and the forward P/E of ~20-23x is historically cheap for FICO. The host has been actively buying the dip and plans to continue below $900.

Chuck Akre bought Fair Isaac, the company behind FICO credit scores, described as a software and data business with deep competitive advantages.