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    Fair Isaac (FICO) Loses Mortgage Score Exclusivity, Is The Stock Still Cheap?

    Simply Wall St·06/25/2026 12:21:11
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    The Federal Housing Finance Agency's move to allow VantageScore 4.0 for mortgages has ended Fair Isaac (FICO)'s exclusive role in that channel. This change introduces a lower-cost rival and has triggered sharp scrutiny of the stock.

    See our latest analysis for Fair Isaac.

    Recent regulatory changes and commentary have been accompanied by sharp moves in Fair Isaac's stock, with the share price down 30.61% year to date based on share price return. However, the 5 year total shareholder return of 126.85% still points to a solid longer term outcome.

    If this sort of regulatory shake up has you rethinking where growth and risk might sit next, it could be worth widening your lens with the Simply Wall St screener for 20 top founder-led companies

    With Fair Isaac shares down 30.61% year to date, trading at US$1,140.34 and at a 22.8% discount to one intrinsic value estimate, the key question is whether this reset is a buying opportunity or if markets already reflect future growth.

    Most Popular Narrative: 26.5% Undervalued

    Against Fair Isaac's last close of $1,140.34, the most followed narrative pegs fair value at about $1,552.52, implying a sizeable valuation gap that hinges on how recurring software and scoring economics evolve from here.

    The ongoing transition to SaaS and cloud-based delivery, evidenced by double-digit growth in FICO Platform ARR and emphasis on conversion to next-generation AI-driven decisioning solutions, is increasing recurring revenues, supporting margin expansion and greater earnings predictability.

    Read the complete narrative.

    Curious what sits behind that confidence in higher margins and steadier earnings. The narrative leans heavily on compounding software revenues, a richer mix, and a future multiple that assumes those targets hold.

    Result: Fair Value of $1,552.52 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, Fair Isaac's story can change quickly if competitive pressure from VantageScore cuts into mortgage scoring revenue, or if software growth stays sluggish relative to expectations.

    Find out about the key risks to this Fair Isaac narrative.

    Another View on Fair Isaac's Valuation

    The earlier narrative leans on a discounted cash flow style fair value, but the market is also looking at Fair Isaac through a P/E lens. On that measure, FICO trades at 34.8x earnings versus 26.1x for the US Software industry and 23.5x for peers, while its fair ratio is also 34.8x. That keeps the share price at a premium. The question is whether investors are still paying up for the story that just changed.

    See what the numbers say about this price — find out in our valuation breakdown.

    NYSE:FICO P/E Ratio as at Jun 2026
    NYSE:FICO P/E Ratio as at Jun 2026

    Next Steps

    With sentiment around Fair Isaac clearly split, use this moment to move quickly. Review the full picture yourself and weigh both the concerns and the potential rewards in 3 key rewards and 1 important warning sign

    Looking for more investment ideas beyond Fair Isaac?

    If the Fair Isaac reset has you reassessing where to put fresh capital, do not stop here. Broaden your watchlist with targeted stock ideas from the Simply Wall St screener.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.