$Fair Isaac(FICO)$ I’m interested in acquiring a position in FICO, but I have concerns about its current valuation. The recent increase in the stock price seems to be driven primarily by multiple expansion. Looking ahead, what will sustain future returns? It’s unlikely that further multiple expansion will occur from a 90 P/E ratio, especially with revenue growth projected at 8-12% in the coming years. Is the company’s monopoly and pricing power the key factors that will drive FCF per share growth? What kind of returns can be expected over the next 5-10 years? Perhaps 10-15% if the P/E ratio compresses slightly as the company matures and growth slows?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments