Is Fair Isaac (FICO) Stock Halal? Why It Just Failed Our Screen
If you checked FICO against a halal screen a while back and it passed, it's worth looking again. The answer has changed. And if you already own the stock because it passed before, there's a good chance you haven't re-checked it since.
Fair Isaac Corp. (FICO) now fails our halal screen. The reason is interest-bearing debt. It used to pass this check. It doesn't anymore.
What changed, plainly
Total debt is now 41.9% of market cap. The AAOIFI-style limit most screens use is 30%. FICO is over that line. Cash and interest-bearing securities are fine, sitting at 1.9% against a 30% limit. The business itself, software for credit scoring and analytics, still looks like a permissible activity on its face, though revenue mix is always worth a second look.
Why this matters more than it sounds like it should
Here's the part almost nobody explains. These screens don't just measure a company's debt in dollars. They measure debt against market cap, which is just the share price times the number of shares out there. That means the ratio moves every single time the stock price moves, even if the company's actual balance sheet hasn't changed at all.
A stock can fail a halal screen today for the exact same debt load it carried last year, simply because the share price dropped and market cap shrank. The reverse is also true. A stock can become halal the moment it gets expensive enough that debt looks small next to it, even though nothing changed inside the business.
We can't tell you exactly why FICO's ratio moved. It could be the price, it could be the debt itself, it's probably some mix of both. What we can tell you is that screening apps only ever show you today's snapshot. They don't tell you the verdict has an expiration date.
What our screen shows right now
- Business activity: appears permissible, but confirm the revenue mix
- Interest-bearing debt: 41.9% of market cap, over the 30% limit - fails
- Cash and securities: 1.9% of market cap, well under the 30% limit
- Non-permissible income: can't be verified automatically, check the financial notes
Overall verdict: not halal, on debt alone.
Is it actually cheap?
Our fair value band puts FICO between $992.55 and $1,227.51, with a midpoint around $1,110. At $592.47, that's well below the range, which is why the valuation score comes in at 100. On paper there's meaningful upside to that midpoint.
But valuation is only one piece. Financial Strength scores a weak 42, and the write-up is blunt about why: FICO carries heavy debt relative to its size. Return on equity is actually negative at -37%, which is unusual for a business that otherwise shows strong profitability and remarkably steady growth (predictability scores 90). A cheap-looking price next to a shaky balance sheet isn't automatically a bargain. The margin of safety here comes with a real caveat attached, and it's not a buy signal from us either way.
The takeaway
Halal verdicts have dates on them. They're tied to a price that changes daily, not just a business that changes slowly. If you rejected a stock months ago, it might pass now. If you're holding something that passed when you bought it, it might be failing today without you knowing.
One more thing worth sitting with: if a stock was failing while you held it and earned income, whether that income is purified or how is a question for a scholar, not for any screening app.
I ran Fair Isaac Corp. through the Barakah Stock Check app - the halal screen, quality scores and fair-value band above come straight from it. Run any ticker in seconds: barakahprofits.com/stock-check (3 days free). And in the Barakah Watch group we flag halal, wide-moat businesses trading below fair value every day.
This is not the only name whose verdict has moved. We keep a public, dated record of every stock that has crossed our halal screen: the halal verdict ledger.
Educational only, not financial advice. The halal screen is an automated estimate - confirm with a scholar-reviewed screener before investing. Figures are point-in-time and change.
