Fair Isaac (NYSE:FICO) and EPAM Systems (NYSE:EPAM) Critical Review

Fair Isaac (NYSE:FICO) and EPAM Systems (NYSE:EPAM) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Volatility & Risk

Fair Isaac has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, EPAM Systems has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.

Profitability

This table compares Fair Isaac and EPAM Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fair Isaac	33.67%	-41.04%	37.92%
EPAM Systems	6.96%	14.71%	11.14%

Analyst Ratings

This is a summary of recent recommendations and price targets for Fair Isaac and EPAM Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fair Isaac	0	5	10	0	2.67
EPAM Systems	2	6	7	0	2.33

Fair Isaac presently has a consensus price target of $1,619.36, indicating a potential upside of 33.84%. EPAM Systems has a consensus price target of $152.00, indicating a potential upside of 56.96%. Given EPAM Systems’ higher possible upside, analysts plainly believe EPAM Systems is more favorable than Fair Isaac.

Valuation & Earnings

This table compares Fair Isaac and EPAM Systems”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fair Isaac	$1.99 billion	14.09	$651.95 million	$31.57	38.32
EPAM Systems	$5.46 billion	0.93	$377.68 million	$6.97	13.89

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

Institutional & Insider Ownership

85.8% of Fair Isaac shares are owned by institutional investors. Comparatively, 91.6% of EPAM Systems shares are owned by institutional investors. 3.0% of Fair Isaac shares are owned by insiders. Comparatively, 3.8% of EPAM Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Fair Isaac beats EPAM Systems on 8 of the 14 factors compared between the two stocks.

About Fair Isaac

Fair Isaac Corporation develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. It offers FICO Customer Analytics, FICO Responsible AI, FICO Advisors, FICO Business Outcome Simulator, FICO Forecaster, FICO TRIAD Customer Manager, FICO Blaze Advisor, FICO Xpress Optimization, FICO Falcon Fraud Manager, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Decision Optimizer, and FICO Strategy Director, as well as software implementation and configuration services. The company markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.

About EPAM Systems

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, performance tuning, deployment, maintenance, and support services. It also provides operation solutions comprising integrated engineering practices and smart automation services. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. The company serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries EPAM Systems, Inc. was founded in 1993 and is headquartered in Newtown, Pennsylvania.