Comparing Fair Isaac (NYSE:FICO) and Cognizant Technology Solutions (NASDAQ:CTSH)

Cognizant Technology Solutions (NASDAQ:CTSH) and Fair Isaac (NYSE:FICO) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cognizant Technology Solutions	10.56%	17.17%	12.74%
Fair Isaac	31.89%	-40.98%	33.55%

Volatility & Risk

Cognizant Technology Solutions has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Fair Isaac has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Insider and Institutional Ownership

92.4% of Cognizant Technology Solutions shares are held by institutional investors. Comparatively, 85.8% of Fair Isaac shares are held by institutional investors. 0.3% of Cognizant Technology Solutions shares are held by company insiders. Comparatively, 3.0% of Fair Isaac shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognizant Technology Solutions	$21.11 billion	1.48	$2.23 billion	$4.55	14.31
Fair Isaac	$1.99 billion	17.44	$651.95 million	$27.02	54.18

Cognizant Technology Solutions has higher revenue and earnings than Fair Isaac. Cognizant Technology Solutions 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 breakdown of recent ratings and target prices for Cognizant Technology Solutions and Fair Isaac, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	12	10	0	2.45
Fair Isaac	0	5	9	0	2.64

Cognizant Technology Solutions currently has a consensus price target of $90.17, suggesting a potential upside of 38.46%. Fair Isaac has a consensus price target of $1,994.62, suggesting a potential upside of 36.25%. Given Cognizant Technology Solutions’ higher probable upside, research analysts plainly believe Cognizant Technology Solutions is more favorable than Fair Isaac.

Summary

Fair Isaac beats Cognizant Technology Solutions on 8 of the 14 factors compared between the two stocks.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.

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.