Update shared on02 Sep 2025
Fair value Decreased 0.98%The consensus price target for Fair Isaac decreased to $1,872 as analysts weighed increased regulatory uncertainty and competitive threats from the FHFA’s move to include VantageScore 4.0, though resilient EPS estimates and a robust business model remain supportive of fair value.
Analyst Commentary
- Bearish analysts lowered price targets due to the Federal Housing Finance Agency's decision to allow Fannie Mae and Freddie Mac to use VantageScore 4.0, raising concerns about increased competition and potential erosion of FICO's monopoly.
- Some analysts noted that the exact mandate for FICO by GSEs is now unclear, introducing regulatory uncertainty and a possible risk to future market share and pricing power.
- Bullish analysts continue to highlight FICO's high-quality business model, pricing power in the Scores segment, and the benefits expected from a recovery in origination volumes and strong credit market fundamentals.
- Several analysts pointed to improved estimates for EPS, driven by unexpectedly strong mortgage and auto loan volumes, as well as favorable macro trends such as benign inflation and declining delinquency rates.
- Despite near-term regulatory fears causing a significant share price correction, some analysts believe the risk of material impact to FICO’s business is overstated in the short term and see current prices as an opportunity, citing additional operational levers like buybacks and cost streamlining.
What's in the News
- FICO launched the FICO Score 10 BNPL and FICO Score 10 T BNPL, pioneering credit scores that incorporate Buy Now, Pay Later (BNPL) loan data to increase lender visibility and financial inclusion, available in Fall 2025; this marks the first time BNPL loans factor into FICO's scoring models (WSJ, Company Announcement, 2025-06-23).
- The company revised its fiscal 2025 guidance upwards, now expecting $1.98 billion in revenues and GAAP EPS of $25.60, with fourth-quarter revenues projected lower sequentially due to softer point-in-time and software license sales (2025-07-30).
- FICO authorized a $1 billion share buyback program and repurchased 284,000 shares between April and June 2025 for over $506 million, reflecting continued capital return to shareholders (2025-06-19, 2025-07-30).
- FICO was dropped from the Russell 1000 Defensive, Russell 1000 Growth-Defensive, and Russell 1000 Value-Defensive indexes as of June 28, 2025 (2025-06-28).
- The company expanded client and strategic partnerships, including collaborations with Chelsea FC and MI New York to promote financial literacy, as well as key technology integrations such as the FICO Score Mortgage Simulator with MeridianLink and adoption of FICO Score 10 T by Guild Mortgage (2025-06-11, 2025-06-24, 2025-06-25, 2025-08-20, 2025-08-21).
Valuation Changes
Summary of Valuation Changes for Fair Isaac
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $1893 to $1872.
- The Future P/E for Fair Isaac remained effectively unchanged, moving only marginally from 50.51x to 49.86x.
- The Discount Rate for Fair Isaac remained effectively unchanged, moving only marginally from 8.64% to 8.62%.
Disclaimer
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