Research Update: Fair Isaac Corp. Outlook Revised To Negative On Expected Weaker Earnings; Ratings Affirmed

In 2020, the U.S. recession will affect service demand and earnings at Fair Isaac Corp. (FICO), leading to weaker credit measures than our previous forecast. The company, which generated revenues of about $1.2 billion as of the last-12-months ending Dec. 31, 2019, could decline by about 10%-11% over the next 12 months and realize adjusted leverage rising close to our 3x downgrade threshold. Accordingly, we are revising our rating outlook on FICO to negative from stable. At the same time, we are affirming all our ratings, including the 'BB+' issuer credit rating on the company and the 'BB+' issue-level rating on its senior unsecured notes. The negative outlook reflects the risk of weak consumer demand affecting credit creation stemming from

...- In 2020, the U.S. recession will affect service demand and earnings at Fair Isaac Corp. (FICO), leading to weaker credit measures than our previous forecast. - The company, which generated revenues of about $1.2 billion as of the last-12-months ending Dec. 31, 2019, could decline by about 10%-11% over the next 12 months and realize adjusted leverage rising close to our 3x downgrade threshold. - Accordingly, we are revising our rating outlook on FICO to negative from stable. At the same time, we are affirming all our ratings, including the '##+' issuer credit rating on the company and the '##+' issue-level rating on its senior unsecured notes. - The negative outlook reflects the risk of weak consumer demand affecting credit creation stemming from the current recessionary environment and the possibility of a prolonged period of business disruption resulting from the COVID-19 pandemic....

Research Update