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Earnings Estimates Rising for Fair Isaac (FICO): Will It Gain?

Fair Isaac (FICO) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Fair Isaac (FICO) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.

- Zacks

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this financial services company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Fair Isaac, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $3.42 per share for the current quarter represents a change of +24.82% from the number reported a year ago.

Over the last 30 days, the Zacks Consensus Estimate for Fair Isaac has increased 28.5% because one estimate has moved higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $15.75 per share for the full year, which represents a change of +20.5% from the prior-year number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, one estimate has moved up for Fair Isaac versus no negative revisions. This has pushed the consensus estimate 14.7% higher.

Favorable Zacks Rank

Thanks to promising estimate revisions, Fair Isaac currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Fair Isaac have attracted decent investments and pushed the stock 20.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.



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Fair Isaac Corporation (FICO): Free Stock Analysis Report

 

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