Fair Isaac (FICO) and DealerTrack Technologies (TRAK) Critical Contrast

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

Insider & Institutional Ownership

87.5% of Fair Isaac shares are held by institutional investors. 5.6% of Fair Isaac shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Fair Isaac and DealerTrack Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fair Isaac 0 2 1 0 2.33
DealerTrack Technologies 0 0 0 0 N/A

Fair Isaac currently has a consensus price target of $163.00, suggesting a potential downside of 0.44%.

Dividends

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

Earnings and Valuation

This table compares Fair Isaac and DealerTrack Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fair Isaac $932.17 million 5.28 $128.25 million $3.67 44.61
DealerTrack Technologies N/A N/A N/A ($0.67) N/A

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

Profitability

This table compares Fair Isaac and DealerTrack Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fair Isaac 12.41% 30.96% 10.35%
DealerTrack Technologies -3.45% -3.48% -1.59%

Summary

Fair Isaac beats DealerTrack Technologies on 9 of the 10 factors compared between the two stocks.

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 DealerTrack Technologies

Dealertrack Technologies, Inc. provides Web-based software solutions and services. The Company provides solutions and services for segments of the automotive retail industry, including dealers, lenders, original equipment manufacturers (OEMs), third-party retailers, aftermarket providers and other service providers. Dealertrack operates the online credit application networks in the United States and Canada. The Company’s solutions includes Digital Marketing solutions, Dealer Management solutions, F&I solutions, Inventory solutions, Registration & Titling solutions, and Collateral Management solutions. Digital Marketing solutions include digital marketing tools, such as desktop and mobile Website design, search engine optimization (SEO), search engine marketing (SEM), social media and reputation management tools. Registration & Titling solutions include online and cross-state vehicle registration services.

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