Contrasting Fair Isaac Corporation (FICO) and ServiceNow (NOW)

Fair Isaac Corporation (NYSE: FICO) and ServiceNow (NYSE:NOW) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Fair Isaac Corporation and ServiceNow, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fair Isaac Corporation 0 1 1 0 2.50
ServiceNow 0 6 22 2 2.87

Fair Isaac Corporation currently has a consensus price target of $142.50, suggesting a potential upside of 8.16%. ServiceNow has a consensus price target of $118.22, suggesting a potential upside of 1.81%. Given Fair Isaac Corporation’s higher possible upside, research analysts clearly believe Fair Isaac Corporation is more favorable than ServiceNow.

Risk and Volatility

Fair Isaac Corporation has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, ServiceNow has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Insider & Institutional Ownership

89.3% of Fair Isaac Corporation shares are held by institutional investors. 5.6% of Fair Isaac Corporation shares are held by company insiders. Comparatively, 3.3% of ServiceNow shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Fair Isaac Corporation and ServiceNow’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fair Isaac Corporation $914.79 million 4.41 $202.17 million $3.72 35.42
ServiceNow $1.63 billion 12.16 -$32.17 million ($0.99) -117.28

Fair Isaac Corporation has higher revenue, but lower earnings than ServiceNow. ServiceNow is trading at a lower price-to-earnings ratio than Fair Isaac Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fair Isaac Corporation and ServiceNow’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fair Isaac Corporation 13.15% 27.84% 9.72%
ServiceNow -10.17% -29.05% -5.39%

Dividends

Fair Isaac Corporation pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. ServiceNow does not pay a dividend. Fair Isaac Corporation pays out 1.1% of its earnings in the form of a dividend.

Summary

Fair Isaac Corporation beats ServiceNow on 9 of the 16 factors compared between the two stocks.

About Fair Isaac Corporation

Fair Isaac Corporation (FICO) is a provider of analytic, software and data management products and services that enable businesses to automate and connect decisions. The Company operates through three segments: Applications, Scores and Decision Management Software. The Applications segment includes pre-configured decision management applications designed for a specific type of business problem or process, such as marketing, account origination, customer management, fraud, collections and insurance claims management. The Scores segment includes business-to-business scoring solutions and services, business-to-consumer scoring solutions and services, including myFICO solutions for consumers. The Decision Management Software segment consists of analytic and decision management software tools that clients can use to create their own custom decision management applications, its new FICO Decision Management Suite, as well as associated professional services.

About ServiceNow

ServiceNow, Inc. is provider of enterprise cloud computing solutions that define, structure, manage and automate services for global enterprises. The Company offers a set of cloud-based services that automate workflow within and between departments in an enterprise. It provides workflow solutions, and focuses on service management for customer support, human resources, security operations and other enterprise departments. The platform also enables customers to create, by themselves or with its partners, their own service-oriented business applications throughout the enterprise. The Company delivers its software through the Internet as a service. It markets its services to enterprises in a range of industries, including financial services, consumer products, information technology services, healthcare, government, education and technology. It operates data centers in Australia, Brazil, Canada, Hong Kong, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States.

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