Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Fair Isaac Corporation's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 24.9% to 7.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 91, DPO 25, DIO 60). At a 9.0% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 16.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $726.98 per share, suggesting FICO is overvalued by 30.4% at the current price of $1044.36.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 876 | 1,029 | 1,158 | 1,243 | 1,339 | 1,372 |
| (−) Net Interest | 135 | 159 | 179 | 192 | 207 | 212 |
| (+) D&A | 10 | 12 | 15 | 18 | 18 | 18 |
| EBITDA | 1,022 | 1,200 | 1,351 | 1,453 | 1,563 | 1,602 |
| (−) Tax | 174 | 204 | 230 | 247 | 266 | — |
| (−) CapEx | 16 | 19 | 21 | 23 | 25 | — |
| (−) ΔWC | 174 | 117 | 98 | 65 | 73 | — |
| Free Cash Flow (FCF) | 658 | 860 | 1,002 | 1,119 | 1,200 | — |
| Peers' EBITDA Multiple | 16.3x | |||||
| Terminal Value | 26,056 | |||||
| WACC / Discount Rate | 8.97% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 631 | 756 | 808 | 828 | 815 | 16,956 |
| Enterprise Value | 20,794 | |||||
| Projection Period | 3,838 | 18.5% | ||||
| Terminal Value | 16,956 | 81.5% | ||||
| (−) Current Net Debt | 2,941 | |||||
| Equity Value | 17,853 | |||||
| (÷) Outstanding Shares | 25M | |||||
| Fair Price | $727 | -30.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 12.3x | 14.3x | 16.3x | 18.3x | 20.3x |
|---|---|---|---|---|---|
| 7.0% | $615 | $709 | $802 | $895 | $988 |
| 8.0% | $586 | $674 | $763 | $852 | $941 |
| 9.0% | $557 | $642 | $727 | $812 | $897 |
| 10.0% | $530 | $611 | $692 | $774 | $855 |
| 11.0% | $505 | $582 | $660 | $737 | $815 |
Current price: $1044.36. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.