Is Fair Isaac Stock Worth More Than Its Competitors?
Fair Isaac (FICO), the maker of the FICO Score, beats Equifax, TransUnion and three other peers on revenue growth and operating margin. Yet its stock lost 59.3% over the past twelve months, the worst return in the group. So after that fall, is Fair Isaac stock worth more than its competitors?
Most Of Fair Isaac’s Peers Trade At Higher P/Es
Fair Isaac delivers more than any of its competitors, but its shares cost less per dollar of earnings than most of theirs. Fair Isaac grew revenue 24.1% over the past twelve months, against 10.3% at Equifax. Its operating margin, the share of sales left after running costs, was 52.1%, against 17.9% at Equifax.
Yet you pay 17.2 times Fair Isaac’s past-year earnings, against 24.1 times for Equifax. Only TransUnion trades lower, at 16.7 times earnings. TransUnion grew about half as fast as Fair Isaac.
| FICO | EFX | TRU | SPGI | MCO | VRSK | |
|---|---|---|---|---|---|---|
| Market Cap ($ Bil) | 14.0 | 16.7 | 12.4 | 115.9 | 79.2 | 21.7 |
| PE Ratio (LTM) | 17.2 | 24.1 | 16.7 | 23.6 | 28.3 | 24.5 |
| LTM Revenue Growth | 24.1% | 10.3% | 12.4% | 9.7% | 11.7% | 5.0% |
| LTM Operating Margin | 52.1% | 17.9% | 18.8% | 41.6% | 46.1% | 43.9% |
| 12M Stock Return | -59.3% | -44.0% | -24.1% | -14.5% | -3.8% | -32.2% |
Fair Isaac’s growth comes mostly from scores, not software. The Scores segment made up 59% of fiscal 2025 revenue. It grew 27.1% that year, while Software grew 3.1%. In fiscal Q3 2026, revenue from scores sold to businesses rose 49%. Management tied the rise mainly to a higher price per mortgage origination score. Mortgage score volumes grew only in the low single digits.
On September 29, the Federal Housing Finance Agency announced mortgage pricing changes. The changes put VantageScore, a cheaper rival score, on the same pricing framework as Fair Isaac’s Classic FICO score. Fair Isaac shares fell 26% in morning trading that day. Fair Isaac’s stock price appears to assume that those mortgage score price rises are over.
Management’s Forecast Predates The Mortgage Pricing Change
Fair Isaac’s latest forecast came out on July 29, 2026, two months before the pricing change. Management raised its fiscal 2026 revenue forecast to $2.53 billion, up 20% from the prior year. It also guided earnings under standard accounting of $36.86 per share.
A result in line with that forecast would confirm that the price rises held through fiscal 2026. It would not cover the months after September 29. On the July 29 call, management said it saw no loss of score volume to VantageScore. Management also conceded that tracking lost volume is “not that easy.”
Mortgage origination score revenue in the first quarterly reports after the change will say more. Suppose that revenue falls while loan volumes hold steady. That would mean Fair Isaac is getting less per score, or losing scores to VantageScore. Fair Isaac will wait for those reports carrying far more debt, for its size, than the S&P 500 as a whole.
How Much Debt Does Fair Isaac Carry Now?
Fair Isaac’s debt equals 40.3% of its market value, against 20.7% for the S&P 500. Part of that debt is new. In June, Fair Isaac took a $1.5 billion term loan to fund a share buyback.
In fiscal Q3 2026, the company spent $1.96 billion buying back 1.705 million shares. That works out to about $1,150 a share, against the latest price of $617.87. Management said that in the near term, cash will go to paying down debt.
What Does Fair Isaac’s Stock Price Appear To Assume?
Fair Isaac still leads its group on growth and margin. Its stock, though, is priced near the bottom of that group. The stock price appears to assume that the agency’s move will end Fair Isaac’s mortgage score price rises. Mortgage score revenue that keeps growing faster than loan volumes after the change would show the worry was too deep. Revenue that stalls or falls while loan volumes hold would show it was right. Fair Isaac has not yet reported a quarter from after September 29, so the question is still open.
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