Should You Sell Your Fair Isaac Stock Now?
Fair Isaac (FICO) stock has lost 57% over the past twelve months, while the S&P 500 returned 17.3%. Shareholders are likely wondering if it is time to sell. The question is difficult because the underlying business has been growing rapidly, and the recent decline followed a government decision on mortgage pricing. So how much does Fair Isaac rely on mortgages?
How Big Are Mortgages In Fair Isaac’s Scores Business?
Scores sold during the mortgage origination process made up 62% of Fair Isaac’s scores revenue in fiscal Q3 2026, management said on the July 29 call. The scores segment is the larger of the company’s two main businesses, ranking ahead of software. It brought in $459 million of the $674 million in total revenue for that quarter.
The government decision directly affects this segment. Fair Isaac stock fell sharply on September 29, 2026, after the Federal Housing Finance Agency said it would use a competitor to the FICO score in mortgage pricing. That cheaper rival is VantageScore, and the change puts it on the same footing as Classic FICO.
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Fair Isaac Grew By Raising Its Score Price
Scores revenue is calculated by multiplying the price of each score by the total number sold. A company can therefore grow by increasing its volume or by raising the price of each score.
Fair Isaac has taken the latter approach. Its mortgage score revenue rose 97% from a year earlier in fiscal Q3 2026, yet the number of mortgage scores sold grew only in the low single digits. Management said the growth in revenue from scores sold to businesses came mainly from a higher price per mortgage score.
This dynamic presents the risk in owning the stock now. Fair Isaac achieved its recent growth by raising prices, and the government has just let a cheaper rival into mortgage pricing.
What Are You Paying For Fair Isaac’s Earnings Now?
Investors are currently paying 20.6 times earnings, a slight discount to the 21.9 times multiple for the S&P 500. These earnings reflect an unusually profitable operation. Over the past twelve months, Fair Isaac retained 52.1% of its revenue as operating profit, compared with 18.5% for the S&P 500.
The company generated this profit before the government’s decision. Its sustainability now depends on whether lenders continue to buy the FICO score at today’s price. During the July 29 call, two months prior to the decision, management said it was not seeing a loss of volume. Lenders appeared to be purchasing both the FICO score and VantageScore. Management also admitted that tracking such a loss is not easy.
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A move like this makes Fair Isaac holders ask whether to add or step back. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Glenn Caldicott, CIO of our Boston-based partner firm Empirical Asset Management, an SEC-registered investment adviser, offers a free review of your holdings, fees and income plan.