Core Viewpoint - Fair Isaac Corporation (FICO) shares fell 13.4% following comments from the Federal Housing Finance Agency (FHFA) Director Bill Pulte regarding the introduction of VantageScore 4.0 as a potential competitor to FICO's credit scoring monopoly [1][4]. Group 1: Market Dynamics - FICO has historically held a near-monopoly on credit scoring, allowing for significant price increases, the latest occurring in January [1]. - The FHFA's endorsement of VantageScore 4.0 for use by government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac could lead to a reduction in FICO's market share, as these GSEs guarantee about half of all U.S. mortgages [2][4]. - VantageScore, developed in 2017, utilizes alternative data and less stringent traditional data requirements, potentially benefiting borrowers with limited credit history [3]. Group 2: Competitive Landscape - Despite the recent decline in FICO's stock, it still trades at a high valuation of 70 times earnings, indicating that investors do not anticipate significant declines in market share or revenue [6]. - The FHFA had previously mandated the use of VantageScore by Fannie Mae and Freddie Mac in late 2022, providing a three-year grace period for implementation, suggesting that the recent news may not be entirely new [7]. - The introduction of VantageScore could mitigate the risk of federal agencies moving towards a "bi-merge" scoring system, which would reduce the reliance on FICO scores [8]. Group 3: Pricing Strategy - FICO's recent price hikes, including the latest increase in January, may be halted as the new FHFA director aims to lower costs for homeowners [9].

The news and noise about and around Fair Isaac Corporation (NYSE: FICO ) has been exciting of late. Just about three weeks ago, on 20 May, FICO shares fell 8% in a single day’s trading. The next day, the sell-off was sharper: The shares were down overI am a writer with diverse interests from creative writing to physics to tennis and music. Another interest is markets/investing. I live on the Israeli Golan Heights.I believe in research as a critical component of any investing decision. I find company dynamic ...

Core Viewpoint - Fair Isaac's shares dropped 21.9% this week following critical comments from FHFA Director Bill Pulte regarding recent price increases for credit scores and a review of credit report practices [1][3]. Group 1: Price Increases and Regulatory Scrutiny - Fair Isaac announced a price increase for credit scores from $3.50 to $4.95 for mortgage applications last November [3]. - Pulte criticized the transparency of price increases for credit reports from the three major credit bureaus, questioning why some reports cost significantly more than during previous administrations [4]. - The FHFA is reviewing the necessity of "tri-merged" scores, which utilize credit scores from all three major bureaus, and considering a shift to "bi-merged" scores that would only use two [4]. Group 2: Impact on Fair Isaac's Business - A potential reduction in the volume of credit scores needed for bi-merged reports could negatively impact Fair Isaac's business [5]. - Despite the cautionary news, Fair Isaac's FICO scores are used across various types of loans, and the company also generates revenue from software and analytics services, which accounted for about 40% of revenue last quarter [6]. - Analyst Surinder Thind from Jefferies suggested that even with the adoption of bi-merged scoring, Fair Isaac's earnings per share might only be impacted by a maximum of 16%, indicating a potential buying opportunity [7].

Fair Isaac (NYSE:FICO) stock dropped big on Wednesday - more than 15%. In fact, the stock has plummeted almost 23% in the last two days and is down about 30% from its highs in December, about 6 months ago. It was trading at about $1,704 per share at the end of market close yesterday.Could it drop lower - another 25-30%? What about 40% to $1,000 levels?Well, here’s the concern - even at $1,704 per share the stock isn’t cheap. It trades at close to 60x last twelve months’ cash flow. Not 16 times, rather 60 ti ...

Even by the standards of a lousy Wednesday for stocks in general, Fair Isaac (FICO -15.62%) was a standout in the wrong kind of way. For the second trading session in a row, the credit scoring specialist took a real blow to its stock price, which tumbled by almost 16% on the day. That percentage figure was 10 times the 1.6% decline of the S&P 500 (^GSPC -1.61%). Fair Isaac not fair?Investors who thought Fair Isaac stock would bounce back from its 8% drubbing on Tuesday were badly mistaken. That's because Bi ...

Core Viewpoint - Fair Isaac Corporation (FICO) is expected to report strong revenue and earnings growth for the second quarter of fiscal 2025, driven by innovations in its scoring business and increased adoption of its FICO Score 10T product. Financial Performance - The Zacks Consensus Estimate for second-quarter fiscal 2025 revenues is $496.22 million, indicating a 14.39% increase from the previous year [1] - The consensus estimate for earnings is $7.39 per share, reflecting a 20.36% year-over-year growth [1] Recent Performance Trends - FICO's earnings have missed the Zacks Consensus Estimate in three of the last four quarters, with an average negative surprise of 0.92% [2] - The company has seen sustained growth in Scores revenues, supported by continuous innovation and the incorporation of Buy Now, Pay Later loan data into its scoring models [3] Product Development and Market Position - The expansion of FICO Score 10T for non-GSE mortgages is likely to have driven revenue growth, supported by customer adoption and expansion among existing clients [4] - FICO's land-and-expand strategy and increased recurring revenues have strengthened its market position, contributing to sustained growth [5] Industry Leadership - FICO reported strong adoption momentum for FICO Score 10T in mortgage origination, with loans utilizing this score beginning to trade on the MCT Marketplace, indicating broader market acceptance [6] Earnings Expectations - According to the Zacks model, FICO has an Earnings ESP of -1.71% and a Zacks Rank of 3, suggesting a moderate likelihood of an earnings beat [7]