Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat ScoreNarrowing
On September 28, 2026, FHFA Director Bill Pulte said Fannie Mae and Freddie Mac will price Classic FICO and VantageScore 4.0 loans on one loan-level pricing grid, removing the 20-point downward adjustment the Enterprises had set for VantageScore on September 9. Within hours Rocket Mortgage named VantageScore 4.0 its preferred model and said it will default to it on eligible direct-to-consumer GSE loans from Q4 2026. TransUnion extended $0.99 standalone VantageScore 4.0 mortgage pricing through December 31, 2028 and offered it free alongside a FICO purchase. The stock fell about 27% to roughly $618 on September 29 and was $661 on October 2. The September 3 all-lender instruction opened permission; this is different in kind. The pricing penalty that made the second score cost the borrower more is gone, the score is free to add, and the largest U.S. originator has moved it into the primary slot on its own retail book. That is the first named primary-slot move, not a parallel pull. KBW analysts, via HousingWire, put VantageScore at 5.5% of GSE originations in September, flat on August, with Rocket at 34% penetration and UWM at 24.9%. regulatoryLockIn falls to destroyed and transactionEmbedding falls from strong to intact. systemOfRecord holds at strong: the GSE grid is one place the FICO tiers had force, not the only one.
FICO's moat had three layers. The regulatory layer is gone at the Enterprises; the transaction layer still holds but now has a priced competitor in the same slot; the software layer is unchanged and still masked by legacy runoff:
- GSE Mandate — From Permission to Price Parity: On July 8, 2025, FHFA approved VantageScore 4.0 as a lender-choice alternative to Classic FICO, ending FICO's exclusive GSE mandate. A fifty-lender rollout went live May 1, 2026, and on September 3 Pulte opened it to every lender. That was permission. September brought price. On September 9 the Enterprises published a VantageScore pricing grid with a 20-point downward adjustment, so the same borrower could cost more on the second score. On September 28 Pulte collapsed it into one grid, calling the scores interchangeable. Milliman's Jonathan Glowacki said the two scores produce identical mortgage prices only 40–50% of the time, and VantageScore tends to score the same borrower higher, so a single grid tilts lender economics toward VantageScore on a large share of files. Classic FICO is still required on manually underwritten loans and FICO 10T is not yet approved for GSE delivery. No regulatory constraint now keeps a GSE lender on FICO.
- Transaction Embedding — Still in the Slot, No Longer Alone in It: FICO's Mortgage Direct Licence (October 2025) sells scores to tri-merge resellers at $0.99 per pull plus $65 per funded loan since April 2026; RBC put partner adoption at about 73% of reseller volume. Q3 FY2026 mortgage origination revenue grew 97% YoY to 62% of Scores revenue, and the Scores segment runs at roughly a 91% operating margin. That line now has a priced competitor in the same slot. TransUnion sells VantageScore 4.0 at $0.99 standalone through 2028 and free with a FICO pull, with no $65 funded-loan fee. Rocket Mortgage, after testing 1.4 million credit reports, defaults to VantageScore on eligible direct-to-consumer GSE loans from Q4 2026 and keeps FICO for investment properties, second homes, jumbo and its broker channel. The $65 funded-loan fee is now the part of FICO's mortgage economics a competitor does not charge, and the funded loan is where FICO chose to collect.
- FICO Platform — Real, and Now the Larger Share of the Argument: The FICO Platform is a cloud decision-management system with $413M ARR growing 62% YoY as of Q3 FY2026 — it passed non-platform ARR for the first time this quarter and is now 51% of software ARR. Platform net retention is 148%. Banks that migrate origination, account management and collections onto it face multi-year re-implementation costs to leave, entirely independent of which score they pull. Trailing-twelve-month ACV bookings reached $128M, up 39%. The qualification is that none of this is showing up in reported software growth yet: Software segment revenue grew 2% YoY to $215.3M in Q3, because non-platform ARR fell 17% to $403M (net retention 82%), on-premises revenue declined 16% and professional services declined 24%. Blended software net retention is 109%. The legacy runoff is now a smaller share of the base each quarter, so the drag mechanically fades — but for the moment the 'second engine independent of GSE politics' is contributing roughly nothing to consolidated growth.
Moat Verdict
FICO is still a net AI beneficiary in Platform — Platform ARR grew 62% to $413M and passed the legacy book in Q3 FY2026 — and proprietaryData remains strong. What changed on September 28, 2026 is not AI, it is price. FHFA put Classic FICO and VantageScore 4.0 on one GSE pricing grid, TransUnion priced VantageScore at $0.99 through 2028, and Rocket Mortgage made it the default on its retail GSE book. regulatoryLockIn falls to destroyed and transactionEmbedding falls from strong to intact: the slot is still mostly FICO's, but it is no longer a slot nobody else can price into. systemOfRecord holds at strong because the FICO tiers still anchor courts, disclosures, auto and card. The durable read is a high-single-digit to low-double-digit compounder with a contested mortgage line, a genuine software engine, and a stock that has already priced much of that — the question is no longer whether FICO is a monopoly but how far Rocket's move spreads.
59.6 resilient · 65.0 vulnerable · 80/20 = 60.7 · = 61 · blended with 54 projected = 59
Open a moat to read its note.
Credit officers, underwriters and fraud analysts learn FICO Platform workflows and FICO Score interpretation, but VantageScore is now accepted across GSE channels and lenders already run it in parallel; the retraining cost is real switching friction, not an interface few can replace. Re-rated from strong to intact in the proof-point pass.
FICO Platform customers configure years of credit decisioning rules, fraud detection policies, and compliance workflows — multi-year re-implementation if they leave, independent of the score pull. That is customer-authored policy, not FICO-owned logic competitors cannot copy. Same bar as Snowflake SQL (intact). The FICO Score franchise is the unique asset, already scored on proprietaryData, systemOfRecord, and regulatoryLockIn; platform NRR measures switching cost, not a second copy of the score.
FICO's Score 10T model incorporates trended 24-month credit data from all three bureaus. On July 1, 2026 Fannie Mae and Freddie Mac released 10T performance datasets spanning April 2013 to September 2025, including trended credit and rental payment history — the second major unblocking of lender validation after the late-2025 historical data release, and the reason the stock rose 11% that day. Competitors cannot replicate Score 10T's predictive accuracy without equivalent bureau contractual access and decades of model calibration against real default outcomes.
FICO's credit modelling expertise, built over 70 years, represents institutional knowledge that cannot be replicated quickly. The regulatory regime around mortgage underwriting creates a specialised domain where FICO's actuarial and statistical models remain the benchmark. AI tools that could augment competitors still require the underlying performance data — which only FICO has at scale and across full economic cycles.
FICO Scores + FICO Platform + FICO Siron (compliance) + FICO Blaze Advisor (rules management) address the full credit lifecycle, and banks adopting the Platform bundle face deep integration switching costs across multiple processes at once. The bundle is not currently converting into segment growth: Software revenue grew 2% YoY in Q3 FY2026 as on-premises fell 16% and professional services fell 24%, so the legacy half of the suite is shrinking faster than the Platform half is being cross-sold. Status held at intact rather than raised, because the direct licence relationship gives FICO a commercial channel into the software suite that it did not have under bureau pass-through.
70+ years of credit performance data across multiple economic cycles — the 2001 dot-com recession, 2008 financial crisis, 2020 COVID shock — underpins FICO's scoring models. No competitor can acquire this dataset. AI makes this moat stronger, not weaker: FICO Score 10T's trended 24-month data creates a moat that deepens as the behavioural history grows and as AI credit models require rich longitudinal training data that only FICO possesses.
Downgraded from weakened on the September 28, 2026 single pricing grid. The weakened note said destroyed would require the primary slot to move; it has. FHFA approved VantageScore 4.0 in July 2025, opened it to every GSE lender on September 3, 2026, and on September 28 put both scores on one loan-level pricing grid, removing the 20-point adjustment set on September 9. Rocket Mortgage then made VantageScore its default on eligible direct-to-consumer GSE loans from Q4 2026. Fannie Mae dropped its minimum score requirement in November 2025, and VA and FHA accept rent and utility history. No regulatory rule now creates a cost of switching off FICO on a GSE loan; the remaining requirements — Classic FICO on manually underwritten loans — are residual, not a lock.
Held at weakened. The September 3 downgrade said intact required the competing score to stay gated or unused; it is now neither. On September 28 FHFA priced both scores on one grid and called them interchangeable, and Rocket Mortgage — the largest U.S. originator — made VantageScore its default on eligible retail GSE loans. KBW analysts, via HousingWire, put VantageScore at 5.5% of GSE originations in September, flat on August, with Rocket at 34% penetration and UWM at 24.9%. What still holds: 50M+ consumers monitor FICO via myFICO, automated underwriting and secondary-market investors are calibrated on FICO history, and Rocket keeps FICO on its broker channel, jumbo, second-home and investment loans. Not destroyed while FICO remains the primary score on the large majority of conforming files; it would fall to destroyed if a second top-10 originator defaults to VantageScore and GSE share passes 20%.
Narrowing over 5–10 years. Watch: VantageScore keeps gaining GSE originations from 5.5% in September 2026 (KBW) as originators follow Rocket; the trend completes if a second top-10 originator defaults to VantageScore and its GSE share passes 20%, and stops if that share stays under 10% through the end of TransUnion's $0.99 pricing in 2028.
Downgraded from strong. FICO is still in the transaction layer of most U.S. consumer credit decisions, and Q3 FY2026 mortgage origination revenue grew 97% YoY to 62% of Scores revenue. The strong proof point was that the slot had no priced alternative. It now has one: on one GSE pricing grid, TransUnion sells VantageScore 4.0 at $0.99 through December 31, 2028 — free alongside a FICO pull — against FICO's $0.99 plus $65 per funded loan, and Rocket Mortgage defaults to VantageScore on eligible retail GSE loans from Q4 2026. Embedding that survives on most files but has a cheaper substitute in the same decision path is real switching friction, not a slot competitors cannot reach.
Held at strong, with the GSE channel now contested. Courts reference FICO scores in bankruptcy proceedings, regulators use them in fair-lending analyses, and loan disclosures and consumer communications across auto, card and mortgage are built around FICO tiers (620, 680, 740, 760); 50M+ consumers monitor FICO via myFICO. On September 28, 2026 FHFA put VantageScore 4.0 on the same GSE pricing grid and called the scores interchangeable, so on the conforming file the tier no longer has to be a FICO tier. That is one channel, not the vocabulary: no court, auto lender or card issuer has re-based its tiers. It falls to intact if a second major channel — FHA, auto or card underwriting at a top-5 issuer — prices on VantageScore tiers.
Software at near-zero marginal cost: scale shows up as network effects, data or bundling, which are rated there. No separate unit-cost lead to credit.
Franchise reputation matters but is inseparable from the regulatory standing and relationships rated elsewhere; not credited twice.
Moat in 5–10 years
Network effects are the pillar most likely to step down: with both scores on one GSE pricing grid and VantageScore near free through 2028, other large originators have Rocket's reason to switch, and the file's own destroyed threshold is the test. The system of record holds at strong for now because courts, auto and card tiers still speak FICO, and the 70-year performance dataset holds. Regulatory lock-in is already destroyed and embedding already stepped down, so the trend is placed on the one pillar the spread of lender adoption attacks.
61 today → 54 if the trend completes · scored 59 (70/30)
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat ScoreNarrowing
On September 28, 2026, FHFA Director Bill Pulte said Fannie Mae and Freddie Mac will price Classic FICO and VantageScore 4.0 loans on one loan-level pricing grid, removing the 20-point downward adjustment the Enterprises had set for VantageScore on September 9. Within hours Rocket Mortgage named VantageScore 4.0 its preferred model and said it will default to it on eligible direct-to-consumer GSE loans from Q4 2026. TransUnion extended $0.99 standalone VantageScore 4.0 mortgage pricing through December 31, 2028 and offered it free alongside a FICO purchase. The stock fell about 27% to roughly $618 on September 29 and was $661 on October 2. The September 3 all-lender instruction opened permission; this is different in kind. The pricing penalty that made the second score cost the borrower more is gone, the score is free to add, and the largest U.S. originator has moved it into the primary slot on its own retail book. That is the first named primary-slot move, not a parallel pull. KBW analysts, via HousingWire, put VantageScore at 5.5% of GSE originations in September, flat on August, with Rocket at 34% penetration and UWM at 24.9%. regulatoryLockIn falls to destroyed and transactionEmbedding falls from strong to intact. systemOfRecord holds at strong: the GSE grid is one place the FICO tiers had force, not the only one.
Growth Score
Q3 FY2026 (reported July 29, 2026) is still the last print: revenue $674.2M, +26% YoY; non-GAAP EPS $12.18 (+42%); Scores +41% to $458.9M with mortgage origination +97% and 62% of the Scores line; Software +2% to $215.3M; Platform ARR $413M (+62%). FY2026 guidance is $2.53B / $42.43 non-GAAP EPS, and Q4 reports in early November. What changed after the print is the mortgage volume path. One GSE pricing grid for both scores, TransUnion's $0.99 VantageScore price through 2028, and Rocket Mortgage defaulting to VantageScore on eligible retail GSE loans from Q4 2026 turn the competing score from a permitted parallel pull into a primary-slot choice priced below FICO's funded-loan economics. The 3–5 year blend steps down to high single to low double digits: mortgage Scores roughly flat as share starts to move, non-mortgage Scores and Platform carrying the growth. Q4 FY2026 in early November is the first print that can show whether volume is actually leaving.
Valuation Score
FICO fell about 27% on September 29, to roughly $618, after FHFA put Classic FICO and VantageScore 4.0 on one GSE pricing grid and Rocket Mortgage made VantageScore its default on eligible retail loans; BofA downgraded to Neutral and halved its target to $700 on September 30, when the stock closed at $592.52. It traded at $661 on October 2, below the old $700 bear case. The ladder is re-struck because the old bear case — VantageScore taking the primary slot — has started to happen. At ~16× the FY2026 non-GAAP EPS guide and ~15× trailing free cash flow, the price sits about 41% above the new $470 bear and 27% below the $900 base. The discount is no longer a permission-headline discount; it is a price on observed share loss.
The Grid Moved, Then the Slot
FICO's moat had three layers. The regulatory layer is gone at the Enterprises; the transaction layer still holds but now has a priced competitor in the same slot; the software layer is unchanged and still masked by legacy runoff:
- GSE Mandate — From Permission to Price Parity: On July 8, 2025, FHFA approved VantageScore 4.0 as a lender-choice alternative to Classic FICO, ending FICO's exclusive GSE mandate. A fifty-lender rollout went live May 1, 2026, and on September 3 Pulte opened it to every lender. That was permission. September brought price. On September 9 the Enterprises published a VantageScore pricing grid with a 20-point downward adjustment, so the same borrower could cost more on the second score. On September 28 Pulte collapsed it into one grid, calling the scores interchangeable. Milliman's Jonathan Glowacki said the two scores produce identical mortgage prices only 40–50% of the time, and VantageScore tends to score the same borrower higher, so a single grid tilts lender economics toward VantageScore on a large share of files. Classic FICO is still required on manually underwritten loans and FICO 10T is not yet approved for GSE delivery. No regulatory constraint now keeps a GSE lender on FICO.
- Transaction Embedding — Still in the Slot, No Longer Alone in It: FICO's Mortgage Direct Licence (October 2025) sells scores to tri-merge resellers at $0.99 per pull plus $65 per funded loan since April 2026; RBC put partner adoption at about 73% of reseller volume. Q3 FY2026 mortgage origination revenue grew 97% YoY to 62% of Scores revenue, and the Scores segment runs at roughly a 91% operating margin. That line now has a priced competitor in the same slot. TransUnion sells VantageScore 4.0 at $0.99 standalone through 2028 and free with a FICO pull, with no $65 funded-loan fee. Rocket Mortgage, after testing 1.4 million credit reports, defaults to VantageScore on eligible direct-to-consumer GSE loans from Q4 2026 and keeps FICO for investment properties, second homes, jumbo and its broker channel. The $65 funded-loan fee is now the part of FICO's mortgage economics a competitor does not charge, and the funded loan is where FICO chose to collect.
- FICO Platform — Real, and Now the Larger Share of the Argument: The FICO Platform is a cloud decision-management system with $413M ARR growing 62% YoY as of Q3 FY2026 — it passed non-platform ARR for the first time this quarter and is now 51% of software ARR. Platform net retention is 148%. Banks that migrate origination, account management and collections onto it face multi-year re-implementation costs to leave, entirely independent of which score they pull. Trailing-twelve-month ACV bookings reached $128M, up 39%. The qualification is that none of this is showing up in reported software growth yet: Software segment revenue grew 2% YoY to $215.3M in Q3, because non-platform ARR fell 17% to $403M (net retention 82%), on-premises revenue declined 16% and professional services declined 24%. Blended software net retention is 109%. The legacy runoff is now a smaller share of the base each quarter, so the drag mechanically fades — but for the moment the 'second engine independent of GSE politics' is contributing roughly nothing to consolidated growth.
Moat Verdict
FICO is still a net AI beneficiary in Platform — Platform ARR grew 62% to $413M and passed the legacy book in Q3 FY2026 — and proprietaryData remains strong. What changed on September 28, 2026 is not AI, it is price. FHFA put Classic FICO and VantageScore 4.0 on one GSE pricing grid, TransUnion priced VantageScore at $0.99 through 2028, and Rocket Mortgage made it the default on its retail GSE book. regulatoryLockIn falls to destroyed and transactionEmbedding falls from strong to intact: the slot is still mostly FICO's, but it is no longer a slot nobody else can price into. systemOfRecord holds at strong because the FICO tiers still anchor courts, disclosures, auto and card. The durable read is a high-single-digit to low-double-digit compounder with a contested mortgage line, a genuine software engine, and a stock that has already priced much of that — the question is no longer whether FICO is a monopoly but how far Rocket's move spreads.
59.6 resilient · 65.0 vulnerable · 80/20 = 60.7 · = 61 · blended with 54 projected = 59
Open a moat to read its note.
Credit officers, underwriters and fraud analysts learn FICO Platform workflows and FICO Score interpretation, but VantageScore is now accepted across GSE channels and lenders already run it in parallel; the retraining cost is real switching friction, not an interface few can replace. Re-rated from strong to intact in the proof-point pass.
FICO Platform customers configure years of credit decisioning rules, fraud detection policies, and compliance workflows — multi-year re-implementation if they leave, independent of the score pull. That is customer-authored policy, not FICO-owned logic competitors cannot copy. Same bar as Snowflake SQL (intact). The FICO Score franchise is the unique asset, already scored on proprietaryData, systemOfRecord, and regulatoryLockIn; platform NRR measures switching cost, not a second copy of the score.
FICO's Score 10T model incorporates trended 24-month credit data from all three bureaus. On July 1, 2026 Fannie Mae and Freddie Mac released 10T performance datasets spanning April 2013 to September 2025, including trended credit and rental payment history — the second major unblocking of lender validation after the late-2025 historical data release, and the reason the stock rose 11% that day. Competitors cannot replicate Score 10T's predictive accuracy without equivalent bureau contractual access and decades of model calibration against real default outcomes.
FICO's credit modelling expertise, built over 70 years, represents institutional knowledge that cannot be replicated quickly. The regulatory regime around mortgage underwriting creates a specialised domain where FICO's actuarial and statistical models remain the benchmark. AI tools that could augment competitors still require the underlying performance data — which only FICO has at scale and across full economic cycles.
FICO Scores + FICO Platform + FICO Siron (compliance) + FICO Blaze Advisor (rules management) address the full credit lifecycle, and banks adopting the Platform bundle face deep integration switching costs across multiple processes at once. The bundle is not currently converting into segment growth: Software revenue grew 2% YoY in Q3 FY2026 as on-premises fell 16% and professional services fell 24%, so the legacy half of the suite is shrinking faster than the Platform half is being cross-sold. Status held at intact rather than raised, because the direct licence relationship gives FICO a commercial channel into the software suite that it did not have under bureau pass-through.
70+ years of credit performance data across multiple economic cycles — the 2001 dot-com recession, 2008 financial crisis, 2020 COVID shock — underpins FICO's scoring models. No competitor can acquire this dataset. AI makes this moat stronger, not weaker: FICO Score 10T's trended 24-month data creates a moat that deepens as the behavioural history grows and as AI credit models require rich longitudinal training data that only FICO possesses.
Downgraded from weakened on the September 28, 2026 single pricing grid. The weakened note said destroyed would require the primary slot to move; it has. FHFA approved VantageScore 4.0 in July 2025, opened it to every GSE lender on September 3, 2026, and on September 28 put both scores on one loan-level pricing grid, removing the 20-point adjustment set on September 9. Rocket Mortgage then made VantageScore its default on eligible direct-to-consumer GSE loans from Q4 2026. Fannie Mae dropped its minimum score requirement in November 2025, and VA and FHA accept rent and utility history. No regulatory rule now creates a cost of switching off FICO on a GSE loan; the remaining requirements — Classic FICO on manually underwritten loans — are residual, not a lock.
Held at weakened. The September 3 downgrade said intact required the competing score to stay gated or unused; it is now neither. On September 28 FHFA priced both scores on one grid and called them interchangeable, and Rocket Mortgage — the largest U.S. originator — made VantageScore its default on eligible retail GSE loans. KBW analysts, via HousingWire, put VantageScore at 5.5% of GSE originations in September, flat on August, with Rocket at 34% penetration and UWM at 24.9%. What still holds: 50M+ consumers monitor FICO via myFICO, automated underwriting and secondary-market investors are calibrated on FICO history, and Rocket keeps FICO on its broker channel, jumbo, second-home and investment loans. Not destroyed while FICO remains the primary score on the large majority of conforming files; it would fall to destroyed if a second top-10 originator defaults to VantageScore and GSE share passes 20%.
Narrowing over 5–10 years. Watch: VantageScore keeps gaining GSE originations from 5.5% in September 2026 (KBW) as originators follow Rocket; the trend completes if a second top-10 originator defaults to VantageScore and its GSE share passes 20%, and stops if that share stays under 10% through the end of TransUnion's $0.99 pricing in 2028.
Downgraded from strong. FICO is still in the transaction layer of most U.S. consumer credit decisions, and Q3 FY2026 mortgage origination revenue grew 97% YoY to 62% of Scores revenue. The strong proof point was that the slot had no priced alternative. It now has one: on one GSE pricing grid, TransUnion sells VantageScore 4.0 at $0.99 through December 31, 2028 — free alongside a FICO pull — against FICO's $0.99 plus $65 per funded loan, and Rocket Mortgage defaults to VantageScore on eligible retail GSE loans from Q4 2026. Embedding that survives on most files but has a cheaper substitute in the same decision path is real switching friction, not a slot competitors cannot reach.
Held at strong, with the GSE channel now contested. Courts reference FICO scores in bankruptcy proceedings, regulators use them in fair-lending analyses, and loan disclosures and consumer communications across auto, card and mortgage are built around FICO tiers (620, 680, 740, 760); 50M+ consumers monitor FICO via myFICO. On September 28, 2026 FHFA put VantageScore 4.0 on the same GSE pricing grid and called the scores interchangeable, so on the conforming file the tier no longer has to be a FICO tier. That is one channel, not the vocabulary: no court, auto lender or card issuer has re-based its tiers. It falls to intact if a second major channel — FHA, auto or card underwriting at a top-5 issuer — prices on VantageScore tiers.
Software at near-zero marginal cost: scale shows up as network effects, data or bundling, which are rated there. No separate unit-cost lead to credit.
Franchise reputation matters but is inseparable from the regulatory standing and relationships rated elsewhere; not credited twice.
Moat in 5–10 years
Network effects are the pillar most likely to step down: with both scores on one GSE pricing grid and VantageScore near free through 2028, other large originators have Rocket's reason to switch, and the file's own destroyed threshold is the test. The system of record holds at strong for now because courts, auto and card tiers still speak FICO, and the 70-year performance dataset holds. Regulatory lock-in is already destroyed and embedding already stepped down, so the trend is placed on the one pillar the spread of lender adoption attacks.
61 today → 54 if the trend completes · scored 59 (70/30)
Growth Analysis
Growth Drivers
Key Risk
A mortgage price war on the funded-loan fee. FICO collects $65 per funded loan on top of a $0.99 pull; TransUnion's VantageScore 4.0 charges $0.99 through 2028 with no funded-loan fee and is free alongside a FICO pull. If more top-10 originators follow Rocket in defaulting to VantageScore on GSE loans, FICO must either cut the $65 fee or watch the mortgage line — 62% of Scores revenue at a roughly 91% segment margin — shrink. The test is a second top-10 originator naming VantageScore its default, or FICO reducing the funded-loan fee, before the end of FY2027.
Score Derivation
72.1 base − 1.3 trajectory + 4 margin − 5 risk = 70
Base ~72 on a 9.5% midpoint of 7–12% — cut from 11–16% because primary-slot loss has started (Rocket's default, one pricing grid) and is charged in the CAGR, but held above a mid-single-digit band because KBW's GSE share was flat in September and no FICO print yet shows volume leaving. − 1 trajectory (mortgage decelerating, Platform and 10T stable) + 4 margin (expanding through Q3 FY2026; not yet reversed in a print) − 5 key risk (moderate) = 70. Severity falls from high to moderate because the displacement half of the old risk has moved into the estimate; what remains is a price war on the $65 funded-loan fee. Revisit on Q4 FY2026.
Price Scenarios (12–24 Months)
Price vs Targets
Dashed lines mark the 12–24 month bear, base and bull targets. Daily closes.
Valuation Multiples
| Trailing P/E (GAAP) | ~19× |
| Forward P/E (FY2026 non-GAAP) | ~16× |
| PEG Ratio | ~1.6× |
| Price / Sales (NTM) | ~5× |
| Price / FCF | ~15× |
The multiple has gone from ~26× forward in August to ~16×. On September 4 that was a permission discount on a growth rate that had not moved. After September 28 the growth rate moved too: one pricing grid and Rocket's default are the first primary-slot evidence, so the PEG widened even as the P/E fell. FICO is cheap against its history and against S&P Global and Moody's, and expensive against what mortgage Scores will grow at if a second large originator follows Rocket.
Approximate figures as of October 2, 2026.
Where We Are vs Targets
Loading live price…
Rocket is the first of several: top-10 originators default to VantageScore on GSE loans, FICO cuts the $65 funded-loan fee to hold the rest, and Platform growth cannot offset a shrinking 91%-margin mortgage line.
- A second and third top-10 originator follow Rocket by mid-FY2027; VantageScore passes 20% of GSE originations by FY2028 and FICO keeps the primary slot mainly on jumbo, non-QM, investment and manually underwritten loans
- FICO answers the price war by cutting the $65 funded-loan fee, so mortgage revenue falls on both volume and price — the same lever it gave back on the per-pull price in April 2026, now given back on the funded loan
- Pulte follows through on bi-merge, cutting the number of score pulls per file, and VantageScore extends its $0.99 pricing into auto and card underwriting
- FY2028 non-GAAP EPS falls to ~$36 and the market pays ~13× for a levered credit-data business with ~$5.6B of debt and a shrinking core line: ~$470/share
Rocket's move spreads to some retail channels but not the broker channel, FICO holds the funded-loan fee near its current level, and the auto/card/personal-loan ladder plus Platform carry growth at a data-franchise multiple rather than a monopoly one.
- VantageScore reaches 12–18% of GSE originations by FY2028, concentrated in large retail lenders; FICO keeps the broker channel, jumbo, non-QM, manually underwritten loans and non-mortgage credit where no regulator has moved
- The $65 funded-loan fee holds with modest concessions, so mortgage Scores revenue is roughly flat as share loss offsets a gradual origination recovery
- Non-platform ARR falls below a third of software ARR during FY2027 and Software segment growth returns to high single digits behind Platform's 62% ARR growth and 148% net retention
- FY2027 non-GAAP EPS of ~$45 at ~20×, a discount to Moody's and S&P Global for mortgage share risk: ~$900/share, below the ~$1,256 Street mean that still mostly reflects pre-grid targets
Rocket stays the exception: secondary-market investors keep demanding FICO on pools, 10T is approved for GSE delivery, the funded-loan fee holds, and Platform compounds past $700M ARR.
- MBS investors price VantageScore-only pools wider for lack of performance history, as NFM Lending's Greg Sher warned, so most originators keep FICO primary and Rocket's default does not spread past its own retail book
- FHFA approves FICO Score 10T for GSE delivery and the trended-data advantage gives lenders a reason to pull FICO first on the same grid
- FICO executes the auto, card and personal loan pricing ladder management flagged on the Q3 call, restoring a Scores lever outside FHFA-supervised channels; Platform ARR passes $700M by FY2028
- FY2029 non-GAAP EPS reaches ~$58 and the market pays ~24×: ~$1,400/share
FICO: common questions
Is Fair Isaac stock a buy?
We rate Fair Isaac Hold, with a composite score of 69/100: moat 59, growth 70 and valuation 79. The valuation score is struck against our bear, base and bull targets and moves with the price.
What is Fair Isaac's moat?
Fair Isaac scores 59/100 on moat. On September 28, 2026, FHFA Director Bill Pulte said Fannie Mae and Freddie Mac will price Classic FICO and VantageScore 4.0 loans on one loan-level pricing grid, removing the 20-point downward adjustment the Enterprises had set for VantageScore on September 9.
How fast is Fair Isaac expected to grow?
We estimate 7–12% a year over the next three to five years, for a growth score of 70/100.
What is Fair Isaac's price target?
Our base case is $900, with $470 in the bear case and $1,400 in the bull case.