Head-To-Head Analysis: Fair Isaac (FICO) versus Instructure (INST)

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

Insider and Institutional Ownership

88.2% of Fair Isaac shares are held by institutional investors. Comparatively, 79.0% of Instructure shares are held by institutional investors. 5.6% of Fair Isaac shares are held by insiders. Comparatively, 62.5% of Instructure shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Fair Isaac 13.76% 30.03% 10.29%
Instructure -34.82% -827.22% -44.68%

Dividends

Fair Isaac pays an annual dividend of $0.02 per share and has a dividend yield of 0.0%. Instructure does not pay a dividend. Fair Isaac pays out 0.5% of its earnings in the form of a dividend.

Volatility and Risk

Fair Isaac has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Instructure has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fair Isaac $932.17 million 5.04 $128.25 million $3.97 39.48
Instructure $110.88 million 8.99 -$53.56 million ($1.77) -18.93

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

Analyst Recommendations

This is a summary of current ratings and target prices for Fair Isaac and Instructure, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fair Isaac 0 1 1 0 2.50
Instructure 0 1 7 1 3.00

Fair Isaac currently has a consensus target price of $155.00, suggesting a potential downside of 1.12%. Instructure has a consensus target price of $37.88, suggesting a potential upside of 13.06%. Given Instructure’s stronger consensus rating and higher possible upside, analysts plainly believe Instructure is more favorable than Fair Isaac.

About Fair Isaac

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 Instructure

Instructure, Inc. provides cloud-based learning management platform for academic institutions and companies across the world. The Company operates in the cloud-based learning management systems segment. The Company builds its learning management applications, Canvas for the education market and Bridge for the corporate market, to enable its customers to develop, deliver and manage face-to-face and online learning experiences. The Company develops software that students, teachers and employees use to help achieve their education and learning goals. Its applications develop academic and corporate learning by providing a platform for instructors and learners, enabling frequent and open interactions, streamlining workflow, and allowing the creation and sharing of content. The Company’s platform runs on a cloud-based architecture that enables users to teach, learn and engage across a range of application environments, operating systems, devices and locations.

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