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Fair Isaac Corporation (FICO) Stock

Fair Isaac Corporation Stock Details, Movements and Public Alerts

Fair Isaac Corporation (FICO): The $50B Credit Scoring Monopoly Powering Every American Lending Decision

When you apply for a mortgage, auto loan, or credit card, FICO decides your fate—90%+ of U.S. lending decisions rely on the three-digit score that Fair Isaac pioneered in 1989. CEO William Lansing has transformed FICO from a credit bureau data processor into a software and analytics powerhouse, with recurring revenue from FICO Score licensing, fraud detection platforms, and enterprise decision management. The company's FY2024 revenue of $1.7B generates 40%+ operating margins while growing 15%+ annually—remarkable for a 68-year-old company. Trading at 55x forward earnings seems expensive until you consider FICO's pricing power: recent score price increases of 400%+ met minimal resistance because lenders have no alternative. The Scores segment ($800M+ revenue) operates at 85%+ gross margins while Software ($900M) grows 20%+ with cloud transition tailwinds. FICO's moat may be the strongest in fintech—regulators mandate FICO Scores for GSE mortgages, and the installed base creates insurmountable network effects.

52-Week Range

$2,217.60 - $1,300.00

-18.43% from high · +39.15% from low

Avg Daily Volume

212,361

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

66.23

Above market average

Forward P/E

40.82

Earnings expected to grow

PEG Ratio

1.58

Reasonably valued

Price to Book

82.33

EV/EBITDA

46.77

EPS (TTM)

$27.57

Price to Sales

22.01

Beta

1.29

Similar volatility to market

How is FICO valued relative to its earnings and growth?
Fair Isaac Corporation trades at a P/E ratio of 66.23, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 40.82 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 1.58 indicates reasonable value when growth is considered.
What is FICO's risk profile compared to the market?
With a beta of 1.29, Fair Isaac Corporation is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 82.33 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

32.80%

Operating Margin

48.10%

EBITDA

$950.72M

Return on Equity

35.60%

Return on Assets

32.60%

Revenue Growth (YoY)

13.60%

Earnings Growth (YoY)

17.90%

How profitable and efficient is FICO's business model?
Fair Isaac Corporation achieves a profit margin of 32.80%, meaning it retains $32.80 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 48.10% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 35.60% and ROA at 32.60%, the company generates strong returns on invested capital.
What are FICO's recent growth trends?
Fair Isaac Corporation's revenue grew by 13.60% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 17.90% year-over-year, outpacing revenue growth through improved margins. These growth metrics should be evaluated against SOFTWARE - APPLICATION industry averages for proper context.

Company Size & Market

Market Cap

$43.8B

Revenue (TTM)

$1.99B

Revenue/Share (TTM)

$82.14

Shares Outstanding

23.71M

Book Value/Share

-$73.46

Asset Type

Common Stock

What is FICO's market capitalization and position?
Fair Isaac Corporation has a market capitalization of $43.8B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 23.71M shares outstanding, the company's ownership is relatively concentrated. As a participant in the SOFTWARE - APPLICATION industry, it competes with other firms in this sector.
How does FICO's price compare to its book value?
Fair Isaac Corporation's book value per share is -$73.46, while the current stock price is $1,808.96, resulting in a price-to-book (P/B) ratio of -24.63. Trading below book value can indicate the market perceives challenges ahead, or it might represent a value opportunity if the assets are quality and earnings can recover. Value investors often screen for P/B ratios below 1.0. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$2,031.78

12.32% upside potential

Analyst Recommendations

Strong Buy

4

Buy

9

Hold

5

Sell

1

Strong Sell

0

How reliable are analyst predictions for FICO?
19 analysts cover FICO with 68% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The mixed views reflect uncertainty about the outlook. The consensus target of $2,031.78 implies 12.3% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on FICO?
Current analyst recommendations:4 Strong Buy, 9 Buy, 5 Hold, 1 Sell, 0The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Dec 13, 2025, 08:27 AM

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Fair Isaac Corporation (FICO) Stock Analysis 2025: Credit Scoring Investment Guide

The Unbreakable Credit Monopoly

Fair Isaac Corporation invented the modern credit score in 1989, creating the FICO Score that would become the universal language of creditworthiness. Thirty-five years later, FICO's dominance is more entrenched than ever: Fannie Mae and Freddie Mac require FICO Scores for mortgage underwriting, making FICO a de facto government-mandated monopoly for the $12 trillion mortgage market. When CEO William Lansing raised FICO Score prices 400%+ over five years, lenders had no choice but to pay.

But FICO is more than credit scores. The company's Software segment ($900M revenue) provides fraud detection, origination platforms, and decision management tools used by 80% of the largest U.S. banks. FICO Platform enables enterprises to deploy AI-powered decisioning without building proprietary systems. The combination of essential scoring infrastructure and enterprise software creates a business growing 15%+ annually with 40%+ operating margins—exceptional for any sector.

Business Model & Competitive Moat

FICO operates two segments: Scores (credit score licensing to lenders, bureaus, and consumers) and Software (fraud detection, origination, collections, and decision management platforms). Scores revenue is largely royalty-based—FICO receives fees per score pulled regardless of lending volume. Software includes on-premises licenses (declining), cloud subscriptions (growing 25%+), and professional services.

The moat is regulatory entrenchment plus network effects. GSE mortgage requirements create government-mandated demand. Decades of credit data trained on FICO algorithms make alternatives statistically inferior. VantageScore (created by credit bureaus) has failed to gain meaningful share despite bureau support. Lenders cannot risk using inferior scoring when loan performance and regulatory compliance depend on accuracy. This creates pricing power unmatched in financial services.

Financial Performance

  • •Revenue: $1.7B growing 15%+ annually; Scores up 20%+, Software up 10%+
  • •Profitability: 40%+ operating margins with Scores segment at 85%+ gross margins
  • •Cash Flow: $600M+ annual free cash flow with minimal capital requirements
  • •Capital Allocation: Aggressive buybacks reducing share count 2-3% annually
  • •Balance Sheet: $2B+ debt but manageable given cash generation; investment-grade rated
  • •Valuation: 55x forward P/E reflects monopoly pricing power and growth durability

Growth Catalysts

  • •Continued Price Increases: FICO Score pricing still below value delivered; further increases likely
  • •Software Cloud Transition: FICO Platform cloud ARR growing 25%+ with higher margins than on-premises
  • •International Expansion: FICO Scores gaining traction in UK, Canada, and emerging markets
  • •B2C Growth: myFICO consumer subscriptions and FICO Score partnerships with banks/fintechs
  • •Alternative Data: FICO Score XD and UltraFICO incorporating banking/utility data for thin-file consumers

Risks & Challenges

  • •Regulatory Risk: CFPB scrutiny of credit scoring practices could limit pricing power or mandate competition
  • •VantageScore Competition: Credit bureaus continue pushing alternative scores; any GSE acceptance would be material
  • •Open Banking Disruption: Real-time bank data could enable alternative creditworthiness assessment
  • •Mortgage Volume Sensitivity: Scores revenue correlates with mortgage originations; rate spikes impact volume
  • •Valuation Risk: 55x P/E leaves no room for execution missteps or growth deceleration

Competitive Landscape

In credit scoring, FICO has no real competition. VantageScore (Equifax, Experian, TransUnion joint venture) claims 27 billion scores used annually, but market share in actual lending decisions remains minimal. Fintech alternatives like Upstart use AI/ML for underwriting but supplement rather than replace FICO Scores. The three credit bureaus are partners, not competitors—they pay FICO royalties and embed FICO Scores in their products.

Software competition is more robust: SAS, Oracle, and Salesforce compete in enterprise analytics; Featurespace and Feedzai challenge fraud detection; modern fintechs like Unit and Alloy offer embedded decisioning. William Lansing's strategy emphasizes platform integration—FICO's advantage is combining scoring data with decision management in ways competitors cannot replicate. The 80% penetration among large U.S. banks creates cross-sell opportunities as cloud migration accelerates.

Who Is This Stock Suitable For?

Perfect For

  • ✓Quality-focused investors seeking monopoly economics with regulatory moats
  • ✓Long-term compounders comfortable paying premium for durability (5+ year horizon)
  • ✓Fintech exposure without early-stage risk or profitability uncertainty
  • ✓Growth-at-reasonable-price investors given 15%+ growth with 40%+ margins

Less Suitable For

  • ✗Value investors (55x P/E is objectively expensive by any metric)
  • ✗Income seekers (no dividend; all cash returns via buybacks)
  • ✗Risk-averse investors uncomfortable with regulatory/political headline risk
  • ✗Short-term traders (stock trades on long-term fundamentals, not quarters)

Investment Thesis

FICO represents the rare case where premium valuation may be justified by monopoly durability. The 90%+ market share in credit scoring, regulatory mandates for GSE mortgages, and demonstrated pricing power (400%+ increases) create a business with almost no competition. William Lansing has diversified into enterprise software while maintaining Scores dominance—the combination grows 15%+ with 40%+ margins and minimal capital needs.

The 55x forward P/E reflects this quality but limits margin of safety. FICO suits investors who prioritize business durability over entry price—the stock has compounded 30%+ annually for a decade despite always looking expensive. Risks include regulatory intervention (CFPB could mandate VantageScore acceptance) and mortgage volume sensitivity. For portfolios seeking fintech monopolies with proven business models, FICO offers unmatched competitive positioning at a price that requires patience and conviction.

Conclusion

FICO is a BUY for long-term investors prioritizing business quality over valuation. The monopoly position, demonstrated pricing power, and software diversification justify premium multiples for patient capital. William Lansing's execution has been exceptional—the question is whether 55x adequately reflects regulatory and macro risks. Best suited for quality compounders willing to pay up for durability rather than value investors seeking margin of safety.
Bull Case
$2,400 (34% upside) - Continued pricing power + software acceleration drives 20%+ growth
Base Case
$2,000 (12% upside) - 15% growth continues, 55x multiple sustained for quality
Bear Case
$1,400 (22% downside) - Regulatory intervention or mortgage collapse compresses to 35x

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