Critical Survey: Fair Isaac (NYSE:FICO) vs. Leidos (NYSE:LDOS)

Fair Isaac (NYSE:FICO) and Leidos (NYSE:LDOS) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fair Isaac	33.67%	-41.04%	37.92%
Leidos	8.15%	31.92%	11.23%

Risk and Volatility

Fair Isaac has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Leidos has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fair Isaac	$1.99 billion	13.71	$651.95 million	$31.57	37.29
Leidos	$17.17 billion	0.89	$1.45 billion	$10.92	11.18

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

Institutional & Insider Ownership

85.8% of Fair Isaac shares are held by institutional investors. Comparatively, 76.1% of Leidos shares are held by institutional investors. 3.0% of Fair Isaac shares are held by insiders. Comparatively, 0.8% of Leidos shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Fair Isaac and Leidos, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fair Isaac	0	5	10	0	2.67
Leidos	0	7	6	1	2.57

Fair Isaac presently has a consensus target price of $1,619.36, indicating a potential upside of 37.56%. Leidos has a consensus target price of $187.50, indicating a potential upside of 53.62%. Given Leidos’ higher probable upside, analysts plainly believe Leidos is more favorable than Fair Isaac.

Summary

Fair Isaac beats Leidos on 10 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 Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.