REDDIT
FICO is a slow growth company priced at 30x PE? What am I missing?
So FICO compounded revenue by 9% from 2020 to 2025, But net income compounded by 22% because they kept raising their fees.
Increasing fees is not a sustainable way to grow income and their margins is already at an all time high of 30%. They will have to increase revenue but they have historically grew revenue at a slow rate relative to their valuation. I don't see that slow revenue growth changing anytime soon.
So isn't FICO fairly value at best and even possibly overpriced? Am I missing anything? I think it's smarter to buy MSFT instead since they seem to increase revenue even faster than a medium cap company like FICO.