Analysts Initiate Coverage On Fair Isaac Betting On Its Shift To Cloud, Scores Business, Consumer Credit Market Recovery

Goldman Sachs analyst George Tong initiated coverage of Fair Isaac Corp FICO with a Buy rating and $577 price target.
The price target implies an upside potential of 10.7% at current levels.
Tong remains bullish for the U.S. consumer credit industry prospects over the next few years, supported by an improving macro backdrop, healthy consumer credit profiles, and a rebound in the auto and card categories.
Fair Isaac's transformation into a cloud-based platform is likely to be a valuation driver, with additional tailwinds from the consumer credit market and pricing gains in its Scores business.
RBC Capital analyst Ashish Sabadra initiated coverage of Fair Isaac with a Sector Perform rating and $550 price target.
The price target implies an upside potential of 5.5% at current levels.
Sabadra expects the pricing power to withstand robust double-digit growth in the Scores division. However, the shift to the subscription-based revenue model and the Collection and Recovery business divestiture could affect its software revenues over the near term.
Fair Isaac recently sold its Collection and Recovery business to Constellation's Jonas Software operating group.
Price action: FICO shares are up 0.30% at $522.91 on the last check Thursday.

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