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    Fair Isaac (FICO) Could Be 35% Undervalued After FHA Cleared FICO Score 10T

    Simply Wall St·09/13/2026 22:19:30
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    Fair Isaac (FICO) is back in focus after regulators cleared FICO Score 10T for use by FHA-approved lenders starting January 1, 2027. The change introduces trended credit and rental data into mainstream mortgage decisions.

    Fair Isaac has seen short term momentum pick up around the FICO Score 10T decision, with a 1 day share price return of 2.57% and a 7 day gain of 5.70%. However, the 30 day and year to date share price returns are down 9.25% and 40.03% respectively, and the 1 year total shareholder return has fallen 36.18%. The 3 and 5 year total shareholder returns of 10.54% and 126.92% point to a longer running, but bumpier, wealth creation story.

    Scan how Fair Isaac’s mortgage catalyst compares with other data driven lenders by reviewing the hand picked list of solid balance sheet and fundamentals (23 results) that is now shaping credit and housing finance.

    Fair Isaac just won a fresh mortgage tailwind, yet the share price is still well below its recent peak. Strong franchise, bruised stock. Does that gap signal opportunity or a value trap as things stand today?

    Most Popular Narrative: 34.8% Undervalued

    Fair Isaac closed at $985.39, while the most followed narrative pegs fair value at $1,512.25, using a 9.06% discount rate to get there.

    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. Sustained investment in explainable AI and machine learning, as showcased by new FICO-focused foundation models and decisioning innovations, is enhancing competitive differentiation and supporting premium product offerings, increasing average selling prices and net margins.

    Read the complete narrative. Read the complete narrative.

    Want to understand why this narrative still sees room above today’s price for Fair Isaac? The whole case leans on faster recurring sales growth, higher long run profitability, and a valuation multiple that assumes those earnings hold up. Curious which specific revenue mix, margin path, and future P/E are doing the heavy lifting in that $1,512.25 figure?

    Result: Fair Value of $1,512.25 (UNDERVALUED)

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

    Still, two fault lines matter for Fair Isaac here: rising competition around mortgage scores such as VantageScore and the risk that slower software traction caps the upside in this narrative.

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

    Next Steps

    Mixed feelings about Fair Isaac so far? Use that tension as a prompt to move quickly, review both sides of the story, then weigh the 4 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Fair Isaac?

    Do not stop with Fair Isaac. Broaden your watchlist using focused stock ideas that match clear goals, from potential value opportunities to income or capital preservation.

    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.