Praise for HNC Software Inc. has not produced a stock price bonanza.

Many analysts and industry experts have heaped accolades on the San Diego company, best known for its credit card fraud detection software. Forbes ASAP magazine, in its recent Dynamic 100 survey, ranked the company ninth among 33 software firms.

Yet HNC's stock, after rising from an initial offering price of $7 a share in June 1995, has languished in the high $30s to low $40s for the past year.

The stock closed Friday at $37.375, up 25 cents from a week earlier.

"What is making it stuck is a fundamentally hard question to answer," said Wayne Segal, an analyst at Deutsche Morgan Grenfell in New York, which earlier this year underwrote a secondary HNC offering at $34.50. Mr. Segal has a "buy" rating on it.

Founded in 1986, HNC made its name in neural network technology, a form of artificial intelligence that can discern patterns such as probable fraud in vast amounts of transaction data.

Customers including BankAmerica Corp., Chase Manhattan Corp., First Union Corp., and First USA Inc. use HNC's Falcon system to monitor more than 240 million payment card accounts for fraud, and 22 of the top 25 U.S. banks are HNC clients.

Over the past two years, the 700-employee company expanded into the workers' compensation, retailing, and electronic commerce markets. Revenues grew from $71.4 million in 1996 to $113.7 million last year, while income increased from $9.7 million to $15 million.

Robert North, HNC's president and chief executive officer, said that though the stock price has remained somewhat constant, the market capitalization has risen to $1 billion, from $100 million in 1996.

He said the company is aiming for 40% growth annually. It has its sights on acquisitions and is working on a few small purchases, Mr. North said.

The firm is also releasing new software, including a check fraud system called Falcon Check and a data mining product called SelectSystem.

Experts give different explanations for the lack of share-price movement. Mr. Segal said HNC's evolution into a multiproduct, multi- industry company makes it more complex than it used to be.

"Investors have to understand it before they can take a larger position," he said. "As the company gives another solid quarter, the stock will start moving accordingly."

Richard Zandi, electronic commerce research analyst at Salomon Smith Barney, New York, said the stock has returned 329% since its IPO, exceeding the S&P 500's 200%.

Mr. Zandi rates HNC "outperform" because it has no major competitors and serves industries focused on improving efficiency. "I think that's a winning game plan," he said.

HNC's acquisition of five companies over two years may give investors pause because of associated writeoffs, Mr. Zandi said. "It's taking a breather while its price/earnings ratio gets in line with its growth rate."

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