Fair Isaac (NYSE:FICO) and C3.ai (NYSE:AI) Financial Analysis

Fair Isaac (NYSE:FICO) and C3.ai (NYSE:AI) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Profitability

This table compares Fair Isaac and C3.ai’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fair Isaac	31.89%	-40.98%	33.55%
C3.ai	-108.06%	-46.51%	-37.91%

Volatility and Risk

Fair Isaac has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, C3.ai has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500.

Institutional & Insider Ownership

85.8% of Fair Isaac shares are held by institutional investors. Comparatively, 39.0% of C3.ai shares are held by institutional investors. 3.0% of Fair Isaac shares are held by company insiders. Comparatively, 26.5% of C3.ai shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Fair Isaac and C3.ai, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fair Isaac	0	5	10	0	2.67
C3.ai	5	6	2	1	1.93

Fair Isaac currently has a consensus target price of $2,071.43, indicating a potential upside of 49.75%. C3.ai has a consensus target price of $19.00, indicating a potential upside of 71.17%. Given C3.ai’s higher possible upside, analysts clearly believe C3.ai is more favorable than Fair Isaac.

Earnings and Valuation

This table compares Fair Isaac and C3.ai”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fair Isaac	$1.99 billion	16.48	$651.95 million	$27.02	51.19
C3.ai	$389.06 million	4.02	-$288.70 million	($2.83)	-3.92

Fair Isaac has higher revenue and earnings than C3.ai. C3.ai is trading at a lower price-to-earnings ratio than Fair Isaac, indicating that it is currently the more affordable of the two stocks.

Summary

Fair Isaac beats C3.ai on 11 of the 15 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 C3.ai

C3.ai, Inc. operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides C3 AI platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 Generative AI Product Suite that enables to locate, retrieve, and present information. It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which identifies emerging inbound and outbound risks across the network; C3 AI Sustainability Suite, which helps to decrease greenhouse gas emission; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Financial Services Suite, which helps to minimize compliance risks; and C3 AI Energy Management solution. In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market. It has strategic partnerships with Baker Hughes in the areas of oil and gas market; Booz Allen to provide solutions to government, defense, and intelligence sectors; Raytheon; and AWS, Google, and Microsoft. The company was formerly known as C3 IoT, Inc. and changed its name to C3.ai, Inc. in June 2019. C3.ai, Inc. was incorporated in 2009 and is headquartered in Redwood City, California.