Jim Cramer - Mad Money Fair Isaac Corp. FICO-N DON'T BUY Aug 16, 2021

No one will build a better mousetrap than FICO.

The #14 stock on the S&P last year, up 94.5%. They created and own the FICO credit score, drawing revenues from companies and individuals alike. Their software business is strong, amounting to about 50% of their sales. They're innovative and keep offering new products. Banks are key clients who need credit scores. Software revenue was up 11% and annual recurring revenue was up 22%. Retention rate was 120% (gaining more business). Their performance supports a rising PE. But it now trades at 47x PE, higher than peers, too pricey. It'll likely pullback. A fine company.

He suggested waiting for a pullback, but it's recently rallied 15%, though pulled back today 7% because they missed top and bottom, though reiterated gull-year forecasts. But analysts expected better.

Yesterday, they reported a sizable top and bottom line beat, accelerated revenue growth and raised their full-year forecast, but not as high as the street expected. So shares plunged 7% today. Also, the street is worried about long-term interest rates going higher.

This has survived countless fintech companies that can't beat FICO. They provide software to companies to manage credit risk. Is up 5,732% over 20 years.