Fair Isaac Corporation (FICO): A Bull Case Theory

Group 1 - Fair Isaac Corporation (FICO) is a key player in the U.S. credit system, with its FICO score being the standard for lending decisions across major financial institutions [2][3] - The company generates over 60% of its revenue from its Scores segment, particularly from B2B business, while its Software segment contributes to growing recurring revenue [2] - FICO's strong market position is supported by network effects, high switching costs, and regulatory inertia, creating a significant competitive moat [3] Group 2 - FICO faces competitive pressure from VantageScore, which has gained approval for use in conforming mortgages, challenging FICO's market dominance [4] - In response, FICO has launched FICO Score 10 T, a model that enhances lenders' understanding of consumer risk, covering over $313 billion in annualized mortgage originations [4] - Financially, FICO reported a 20% year-over-year revenue increase to $536.4 million in Q3 2025, with GAAP EPS up 47% and non-GAAP EPS up 37%, driven by a 42% surge in B2B Scores revenue [5] Group 3 - Despite facing regulatory scrutiny and competitive challenges, FICO's entrenched position and pricing power continue to generate strong cash flows, presenting a long-term investment opportunity [5][6] - The stock has depreciated approximately 25.52% since previous coverage, but the bullish thesis remains valid due to FICO's intact competitive moat [6] - Darius Dark Investing emphasizes the strategic adoption of FICO Score 10 T as a response to regulatory and competitive pressures [6]