Head to Head Review: Smith Micro Software (NASDAQ:SMSI) & Fair Isaac (NYSE:FICO)

Fair Isaac (NYSE:FICO) and Smith Micro Software (NASDAQ:SMSI) are both technology companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Risk and Volatility

Fair Isaac has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Earnings & Valuation

This table compares Fair Isaac and Smith Micro Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fair Isaac	$1.99 billion	7.15	$651.95 million	$34.62	19.04
Smith Micro Software	$17.36 million	0.85	-$29.33 million	($3.52)	-0.75

Fair Isaac has higher revenue and earnings than Smith Micro Software. Smith Micro Software 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 recommmendations for Fair Isaac and Smith Micro Software, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fair Isaac	1	6	10	0	2.53
Smith Micro Software	1	0	2	0	2.33

Fair Isaac currently has a consensus target price of $1,210.38, indicating a potential upside of 83.63%. Smith Micro Software has a consensus target price of $12.50, indicating a potential upside of 371.70%. Given Smith Micro Software’s higher probable upside, analysts clearly believe Smith Micro Software is more favorable than Fair Isaac.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fair Isaac	34.05%	-32.51%	40.61%
Smith Micro Software	-92.60%	-44.59%	-31.78%

Institutional and Insider Ownership

85.8% of Fair Isaac shares are held by institutional investors. Comparatively, 20.8% of Smith Micro Software shares are held by institutional investors. 3.0% of Fair Isaac shares are held by company insiders. Comparatively, 34.7% of Smith Micro Software shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Fair Isaac beats Smith Micro Software on 12 of the 14 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 Smith Micro Software

Smith Micro Software, Inc. engages in the development and sale of software to enhance the mobile experience to wireless and cable service providers in the Americas, Europe, the Middle East, and Africa. The company offers SafePath Family, SafePath IoT, SafePath Home, and SafePath Premium product suite, which provides tools to protect digital lifestyles and manage connected devices inside and outside the home; and CommSuite, a messaging platform that helps mobile service provides deliver a next-generation voicemail experience to mobile subscribers, as well as enables multi-language voice-to-text (VTT) transcription messaging. It also offers ViewSpot, a retail display management platform that provides on-screen and interactive demos to wireless carriers and other smartphone retailers; and technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Pittsburgh, Pennsylvania.