FICO Announces New Stock Repurchase Program on January 24, 2024

Rhea-AI Summary

FICO (NYSE:FICO) has announced a new stock repurchase program to acquire up to $500 million of the company’s outstanding common stock. The open-ended program allows the company to repurchase its shares from time to time in the open market and in negotiated transactions, following the completion of its previous stock repurchase program in January 2024.

Insights

Financial Analyst

The announcement of FICO's new $500 million stock repurchase program is a strategic move that can be interpreted as a signal of self-confidence from the company's management. By buying back shares, FICO is effectively investing in itself, potentially reducing the number of shares outstanding, which can lead to an increase in earnings per share (EPS) and a higher stock price, all else being equal.

From a financial perspective, this move indicates that FICO's management believes the stock is undervalued or that they see no better investment opportunity than investing in their own shares. It's also a way to return value to shareholders, as buybacks can provide support to the market price of the stock. Analyzing FICO's balance sheet and cash flow statements would provide further insights into their ability to fund this repurchase without compromising their financial health or growth initiatives.

Market Research Analyst

Stock repurchase programs are often well-received in the market as they can reflect a company's robust financial health and a positive outlook. However, it is important to assess the broader market conditions and sector performance. If FICO is operating in a market that is experiencing growth and innovation, the repurchase program could be seen as a strong move to capitalize on future opportunities.

Conversely, if the sector is facing headwinds, the repurchase could be a defensive move. Investors should compare FICO's strategy with industry norms and consider how competitors are allocating their capital, such as through investments in new technologies or acquisitions versus shareholder returns, to fully understand the implications of this repurchase program.

Economist

When interpreting the implications of a stock repurchase program, it's essential to consider the macroeconomic environment. In periods of low interest rates, companies might favor buybacks as a method to leverage cheap debt for shareholder returns. Conversely, in a high-interest-rate environment, such a strategy could be more costly and potentially risky if it leads to increased leverage.

Additionally, the timing and scale of buybacks can be influenced by economic forecasts, inflation rates and consumer confidence. If FICO's decision aligns with a period of economic optimism, it might suggest expectations of continued revenue growth and profitability. Stakeholders should weigh these macroeconomic factors alongside the company's announcement to gauge the potential long-term benefits and drawbacks of the repurchase program.

BOZEMAN, Mont.--(BUSINESS WIRE)-- FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced that its Board of Directors has approved a stock repurchase program to acquire up to $500 million of the company’s outstanding common stock. This new program was approved following completion of FICO’s previous stock repurchase program, which was in effect from October 2022 until adoption of the new program in January 2024. The new stock repurchase program, which is open-ended, allows the company to repurchase its shares from time to time in the open market and in negotiated transactions.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 215 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail, and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at http://www.fico.com

Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/

For FICO news and media resources, visit www.fico.com/news.

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.

Statement Concerning Forward-Looking Information

Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Software segment’s business strategy, the Company’s ability to continue to develop new and enhanced products and services, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, disruptions and uncertainties with respect to global economic conditions as well as in industries and markets of the Company and its customers, the Company’s ability to keep up with rapidly changing technologies, its ability to recruit and retain qualified personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to protect such data, the failure to realize the anticipated benefits of any acquisitions, or divestitures, and material adverse developments in global economic conditions or the occurrence of certain other world events such as geopolitical tensions, military conflicts, the level and volatility of interest rates, the level of inflation, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, and political and governmental instability. Additional information on these risks and uncertainties and other factors that could affect FICO's future results are described from time to time in FICO's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2023 and its subsequent filings with the SEC. If any of these risks or uncertainties materializes, FICO's results could differ materially from its expectations. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. FICO disclaims any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240124591757/en/

Investors/Analysts:

Dave Singleton

(800) 459-7125

investor@fico.com

Media:

Katie O’Connell

(510) 621-9832

press@fico.com

Source: FICO

FAQ

What did FICO announce regarding its stock repurchase program?

FICO announced a new stock repurchase program to acquire up to $500 million of the company’s outstanding common stock.

When was the previous stock repurchase program in effect until?

The previous stock repurchase program was in effect from October 2022 until the adoption of the new program in January 2024.

How does the new stock repurchase program work?

The new stock repurchase program allows the company to repurchase its shares from time to time in the open market and in negotiated transactions.

What is the ticker symbol for FICO?

The ticker symbol for FICO is FICO.