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AGING Analysis Report
Aug 15, 2026
8 days ago · 100% complete
NOT DEPENDABLE This report predates a filing — its financial basis has been replaced.
Report generated: Aug 15, 2026 · Filing on record since: Aug 22, 2026 · 7 days after
For AI assistants & researchers — machine-readable summary of this page

What this page is: Delvantic's full research page for Fair Isaac Corporation (FICO) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.

Our current read (analysis of 2026-08-23): Designation Watch · Gem Score +0 (−100…+100 Quality+Value blend) · Quality 79 · Value -64 · Sentiment -45 (timing only, not weighted)

Page map (sections in order; each card carries a stable reference-name attribute you can cite):

  • profile-header / price-overview — company profile, live quote, market cap
  • extended-analysisthe core: three AI lens reads with findings, scores, and the analyst memo
  • future-predictions — our forward price-band predictions
  • market-narrative / ai-findings / gpt-critique — narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)
  • Members-only sections (render as login gates for anonymous readers): price-history, income-trend, key-metrics, financials (statement tables), insider-trading. The analysis above is public; the raw data tables require a free account.

More for machine readers: site briefing at /llms.txt · any ticker resolves at delvantic.com/stock/TICKER · raw inputs are public-company filings and market data (via licensed data feeds); every model, score, lens read, and prediction on this page is Delvantic's own analysis.

Fair Isaac Corporation

FICO NYSE
Technology · Software - Application
Bozeman, MT 59715, United States fico.com Updated Aug 15, 10:12am
Price
$1,085.78
Market Cap
$23.5B
Employees
3,876
Beta
1.32
Avg Volume
336,113
Last Dividend
$0.08
CEO
Mr. William J. Lansing J.D.

Fair Isaac Corporation is a technology company that provides analytics, software, and decision-management solutions for businesses across financial services and other industries. Its best-known product is the FICO credit score, a widely used benchmark for assessing consumer creditworthiness and supporting lending decisions. The company also offers software for analytics, decision automation, customer workflows, and fraud detection, helping organizations improve risk management and operational efficiency. Fair Isaac serves banks, lenders, insurers, retailers, and other enterprises that rely on data-driven decisions in credit, fraud prevention, and customer engagement. Founded in 1956 and headquartered in Bozeman, Montana, Fair Isaac Corporation plays a central role in the modern credit and decisioning infrastructure used by financial institutions and business clients.

Runs with full report Generated: Aug 15, 2026 10:23am
Price Overview
Price at report time
$1,085.78
as of Aug 15, 10:29am (8d ago)
Change · Aug 15
-24.92 (-2.24%)
Day Range
$1,075.35 – $1,116.98
52-Week Range
$870.01 – $1,998.01
50-Day MA
$1,179.79
200-Day MA
$1,347.45
Volume
178,900.00
Right now · live
Log in to get the live feed
Members see the real-time price and the move since this report (over 8d).
Share Structure
Outstanding 23,190,906.00
Float 20,885,777.00
Free Float 90.1%
High free float — 90.1% of shares trade freely, ~9.9% held by insiders/institutions
Very liquid — most shares trade freely. Low insider ownership can mean less management alignment, but makes large position sizing straightforward.
Price History (1 Year)
Last updated: Aug 15, 2026 10:36am (8d ago)
Revenue & Net Income Trend
The directional story — useful even when net income is negative.
Last updated: Aug 15, 2026 10:36am (8d ago)
Revenue
The top line — total sales before any costs or taxes are subtracted. A measure of how much business the company is doing.
Net Income
The bottom line — profit left after subtracting all expenses, interest, and taxes from revenue. Reflects accounting profitability, but includes non-cash items like depreciation, so it isn't the same as cash earned.
Operating Cash Flow
The real cash generated by the day-to-day business — selling products, paying suppliers, collecting from customers. Calculated from net income by adding back non-cash items and adjusting for timing (unpaid bills, unsold inventory). When OCF consistently lags net income, the reported profit may not be converting to real money.
Period Revenue Net Income Net Margin YoY/QoQ
Key Metrics
TD Twelve Data statement HEX SEC filing
Industry comparison last run: Aug 15, 2026 10:22am
P/E Ratio (Price per dollar of earnings)
HEX
Stock Price / EPS (Diluted)
40.91
Stock Price: $1,086
EPS (Diluted): 26.54
P/B Ratio (Price vs net asset value)
HEX
Stock Price / Book Value Per Share
Stock Price: $1,086
Total Equity: -$1.75B
Shares: 24,561,000
EV/EBITDA (Total value vs operating profit)
HEX
Enterprise Value / EBITDA
31.11
Market Cap: $23.45B
Total Debt: $3.06B
Cash: $134.14M
EBITDA: $939.80M
Enterprise Value (Takeover price (cap + debt - cash))
HEX
Market Cap + Total Debt - Cash
$29.2B
Market Cap: $23.45B
Total Debt: $3.06B
Cash: $134.14M
Gross Margin (Revenue left after direct costs)
HEX
Gross Profit / Revenue
82.2%
Gross Profit: $1.64B
Revenue: $1.99B
Operating Margin (Revenue left after all operations)
HEX
Operating Income / Revenue
46.5%
Operating Income: $924.85M
Revenue: $1.99B
Net Margin (Revenue left as actual profit)
HEX
Net Income / Revenue
32.7%
Net Income: $651.95M
Revenue: $1.99B
ROE (Profit from shareholder equity)
HEX
Net Income / Total Equity
Net Income: $651.95M
Total Equity: -$1.75B
ROIC (Profit from all invested capital)
HEX
NOPAT / Invested Capital
Operating Income: $924.85M
Tax Rate: 18.8%
Equity: -$1.75B
Total Debt: $3.06B
Cash: $134.14M
Current Ratio (Can it pay short-term bills)
HEX
Current Assets / Current Liabilities
0.83
Current Assets: $705.17M
Current Liabilities: $849.22M
Debt/Equity (Leverage — debt vs equity)
HEX
Total Debt / Total Equity
Short-Term Debt: $399.54M
Long-Term Debt: $2.66B
Total Debt: $3.06B
Total Equity: -$1.75B
Rev/Share (Top-line per share)
HEX
Revenue / Shares Outstanding
$81.06
Revenue: $1.99B
Shares: 24,561,000
Book Value/Share (Net assets per share)
HEX
(Total Assets - Total Liabilities) / Shares
Total Equity: -$1.75B
Shares: 24,561,000
FCF/Share (Real cash generated per share)
HEX
(Operating Cash Flow + CapEx) / Shares
$31.35
Operating CF: $778.81M
CapEx: -$8.92M
Shares: 24,561,000
CapEx is negative (outflow) — added to OCF to get FCF
Div Yield (Annual income from holding)
TD
Last Annual Dividend / Stock Price
0.0%
Last Dividend: $0.08
Stock Price: $1,086
Payout Ratio (Earnings paid out as dividends)
HEX
Dividends Paid / Net Income
Dividends Paid: N/A
Net Income: $651.95M
Dividends paid not available in cash flow statement
Industry Benchmarks
Last run: Aug 15, 2026 10:22am
Compares FICO against LLM-researched typical ranges for its industry. One research call per industry, cached indefinitely — every stock in the same industry reuses the same baseline.
Income Statement (Annual)
Last updated: Aug 15, 2026 10:36am (8d ago)
Metric 2021 2022 2023 2024 2025
Revenue $1.3B $1.4B $1.5B $1.7B $2.0B
Cost of Revenue $332.5M $302.2M $311.1M $348.2M $353.7M
Gross Profit $984.1M $1.1B $1.2B $1.4B $1.6B
Operating Expenses $478.6M $532.7M $559.7M $635.7M $712.3M
Operating Income $505.5M $542.4M $642.8M $733.6M $924.9M
Net Income $392.1M $373.5M $429.4M $512.8M $651.9M
EBITDA $531.1M $562.9M $657.5M $747.5M $939.8M
EPS $13.65 $14.34 $17.18 $20.78 $26.90
EPS (Diluted) $13.40 $14.18 $16.93 $20.45 $26.54
Balance Sheet (Annual)
Last updated: Aug 15, 2026 10:12am (8d ago)
Metric 2021 2022 2023 2024 2025
Cash & Equivalents $195.4M $133.2M $136.8M $150.7M $134.1M
Total Current Assets $551.0M $484.7M $556.4M $617.4M $705.2M
Total Assets $1.6B $1.4B $1.6B $1.7B $1.9B
Current Liabilities $559.2M $331.5M $367.7M $380.3M $849.2M
Long-Term Debt $1.0B $1.8B $1.8B $2.2B $2.7B
Total Liabilities $1.7B $2.2B $2.3B $2.7B $3.6B
Total Equity -$110.9M -$801.9M -$688.0M -$962.7M -$1.7B
Retained Earnings $2.6B $3.0B $3.4B $3.9B $4.6B
Cash Flow (Annual)
Last updated: Aug 15, 2026 10:36am (8d ago)
Metric 2021 2022 2023 2024 2025
Operating Cash Flow $423.8M $509.5M $468.9M $633.0M $778.8M
Capital Expenditure -$7.6M -$6.0M -$4.2M -$8.9M -$8.9M
Free Cash Flow $416.2M $503.4M $464.7M $624.1M $769.9M
Acquisitions (net) $0
Net Debt Issued / (Repaid) $0 $550.0M $0 $0 $1.5B
Dividends Paid
Stock Buybacks -$874.2M -$1.1B -$405.5M -$821.7M -$1.4B
Net Change in Cash $38.0M -$62.2M $3.6M $13.9M -$16.5M
Growth Trends (YoY %)
Last updated: Aug 15, 2026 10:36am (8d ago)
Metric 2022 2023 2024 2025
Revenue Growth +4.6% +9.9% +13.5% +15.9%
Gross Profit Growth +9.2% +11.9% +13.9% +19.6%
Operating Income Growth +7.3% +18.5% +14.1% +26.1%
Net Income Growth -4.7% +14.9% +19.4% +27.1%
EBITDA Growth +6.0% +16.8% +13.7% +25.7%
Dividend History (Last 20)
Last updated: Aug 15, 2026 10:12am (8d ago)
Date Dividend Declaration Record Payment
2017-03-01 $0.02
2016-11-30 $0.02
2016-09-12 $0.02
2016-05-23 $0.02
2016-03-07 $0.02
2015-11-30 $0.02
2015-09-14 $0.02
2015-05-22 $0.02
2015-03-05 $0.02
2014-12-01 $0.02
2014-09-08 $0.02
2014-05-23 $0.02
2014-02-20 $0.02
2013-12-02 $0.02
2013-09-05 $0.02
2013-05-23 $0.02
2013-02-21 $0.02
2012-12-03 $0.02
2012-09-06 $0.02
2012-05-10 $0.02
0Company Classification 1Industry Landscape 2Company Momentum 3Forward Projection 4aDCF Valuation 4bEarnings Power Value 4cAnchored PE 4dReverse DCF 4eRevenue-Based DCF 4fAnchored P/S 4gScenario Analysis 4hDividend Discount Model 4iBook Value Analysis 4jInsider Activity 4fCash Flow Quality 4gDebt Maturity Risk 4hMacro Environment 4iSector Intelligence 4jRevenue Confidence 4kSensitivity Analysis 4lSector Demand Cycle 5AI Investigation 5bThesis Evaluation 6Valuation Synthesis
computed not applicable not yet run 12 computed · 6 not applicable · 6 not yet run
Narrative Economics
The story the market is telling about this stock — the intangible X-factor (founder mythology, cult dynamics, TAM-of-imagination) that moves price beyond what cash flows alone explain. After Shiller, Narrative Economics.
No narrative profile yet for FICO — it's generated by the pipeline (market-narrative step).
AI Lens 4th lens · how AI reaches this business · 5-yr
2026-08-15
The creme is there an opportunity here? Conditional opportunity
Own FICO for the standard, not the algorithm — cheap AI erodes FICO's modeling edge while making its regulator-accepted reference number relatively scarcer.
The asymmetry is the trade: Scores is an AI-resistant coordination monopoly with ~100% incremental margin (GM 74.7%→82.2%, OpM 38.4%→46.5%), while the Software segment is squarely in the AI-native entrant blast radius, so the position score of 63 sits on top of a wide 34–81 range. What kills it is not better AI models — it is permission: watch FHFA/GSE score-adoption mechanics and VantageScore penetration of mortgage and securitization pulls, plus score pull volumes versus origination volumes, which is where displacement shows up before pricing does. What unlocks the bull case is agentic underwriting multiplying score calls per loan while price per pull keeps rising.
63
AI Position
Moderately favorable — the standard survives even as the model commoditizes
Cheap AI makes credit-risk modeling near-free and thereby devalues FICO's algorithm, but the asset FICO actually monetizes is a regulator-accepted, counterparty-shared standard that becomes relatively scarcer as black-box scoring proliferates.
Exposure 54 Confidence 66 50 = neutral
Primary Tailwind

As lenders and fintechs generate dozens of cheap AI risk models, the need for one explainable, audited, universally accepted reference score for pricing, securitization and adverse-action compliance rises — that is exactly the unit FICO charges a royalty for, at near-zero marginal cost.

Primary Pressure

AI collapses the cost of building a competitive risk model and a decisioning platform: the Software segment faces AI-native decision-automation entrants, and bureaus (who own the underlying data FICO does not) can push their own jointly-owned score with better economics for themselves.

Critical Hinge

Whether cheap AI accelerates regulator and capital-markets acceptance of non-FICO scores — observable in FHFA/GSE score-adoption mechanics, VantageScore share of mortgage and securitization pulls, and whether Scores unit volumes hold as price per pull rises.

Forensic fingerprint same 11 factors for every stock · 0 unfavorable · 50 neutral · 100 favorable
Underlying Need Persistence do people still need this at all? 93
Lenders will always need to price consumer credit risk and prove the basis of the decision.
Credit extension and its legal justification are structural to lending; AI changes how risk is estimated, not whether an auditable estimate is required.
Mortgage and card origination volumes · Adverse-action explainability rules · Securitization disclosure requirements
relevance 92 · confidence 88
Solution Persistence will they still solve it this way? 64
The three-digit standardized score persists; FICO's specific brand of it is a policy-dependent choice.
The shared-benchmark format survives AI, but which benchmark is mandated for GSE and securitization use is decided by regulators and bureaus, not model quality.
FHFA score and bi-merge implementation · VantageScore mortgage adoption rate · Direct lender licensing program traction
relevance 85 · confidence 62
Intelligence Commoditization does cheap AI power them or copy them? 43
Cheap AI copies FICO's analytics far more than it powers them.
Gradient-boosted and LLM-assisted risk models already outperform scorecard statistics; FICO's residual advantage is acceptance and explainability, not predictive edge.
Alt-score accuracy claims in lender pilots · Cash-flow underwriting adoption · Regulatory stance on opaque models
relevance 88 · confidence 74
Responsibility Transfer are they paid to take the blame? 78
FICO is partly paid to be the defensible, examinable answer.
Using FICO transfers regulatory and litigation defensibility to a recognized third-party standard — a role an internally built AI model cannot occupy without owning the compliance risk.
CFPB/ECOA model-governance enforcement · Bank examiner treatment of internal models · Litigation citing score provenance
relevance 80 · confidence 72
Scarcity Migration do their assets get rarer or more common? 74
Model-building becomes abundant; a trusted, shared, regulator-blessed number becomes rarer.
When every counterparty can produce its own score, the coordination asset — one number everyone accepts — appreciates relative to analytic skill, and FICO holds it.
Score references in ABS/RMBS documents · Investor reliance on FICO bands · Competing standard consortium formation
relevance 86 · confidence 68
Customer DIY Preference will customers just build it themselves? 62
Big lenders already build custom models and still pull FICO as the reference.
Internalizing scoring does not remove the need for an externally recognized number for pricing, capital treatment and secondary-market sale, so DIY tends to layer rather than replace.
Score pull volumes vs origination volumes · Large-bank statements on internal scoring · Fintech underwriting without FICO pull
relevance 72 · confidence 66
AI Intermediation Position do AI agents go through them or around them? 65
Agentic underwriting still calls the score as a service — unless it goes straight to raw data.
Automated decision flows can multiply score API calls per loan, but an agent with direct bureau and bank-transaction access could skip the standardized score entirely for non-conforming credit.
Score pulls per origination trend · Bureau direct-to-agent data products · Non-conforming lenders bypassing scores
relevance 70 · confidence 58
Data Leverage does their data make AI better? 41
FICO models the data but does not own it — the bureaus do.
Without proprietary raw credit files, FICO's AI advantage is thin and its distribution partners are also its most credible substitute sponsors.
Bureau contract renewal terms · VantageScore product investment · FICO proprietary data assets added
relevance 68 · confidence 72
AI Margin Conversion do the AI savings become profit? 72
Savings land in profit because Scores has essentially no marginal cost and pricing is set, not competed.
Gross margin rose 74.7%→82.2% and operating margin 38.4%→46.5% while revenue grew to $1.99B; AI mainly cuts Software delivery and model-maintenance cost, which flows through given royalty pricing power.
Software segment gross margin trend · Headcount vs Platform ARR growth · Operating margin above 46.5%
relevance 76 · confidence 74
Revenue Unit Durability does the thing they charge for survive? 63
Price per score pull is durable; pull count is the exposed variable.
The royalty-per-inquiry unit survives AI intact, but bi-merge, alternative scores, or agent workflows that consult a score once instead of thrice would compress volumes even as price rises.
Realized price per pull vs volume mix · Mortgage segment unit trend · Auto/card score royalty growth
relevance 84 · confidence 64
Entrant Compression how easily can newcomers copy them? 47
Software is very reproducible with cheap AI; the Scores standard is not.
Decision-management and fraud platforms are exactly the workload AI-native entrants can now build quickly, while replicating universal score acceptance requires regulators and capital markets, not code.
Platform ARR net retention · Competitive losses in decisioning deals · New AI-native fraud vendors in bank RFPs
relevance 80 · confidence 66

AI Lens thesis

AI reaches FICO through two separate channels with opposite signs. In Scores, the predictive math is already commoditized and further commoditization changes little, because customers do not buy accuracy — they buy a number every counterparty, regulator and securitization desk agrees on, that can be defended in an adverse-action letter. Cheap AI multiplies opaque internal models and, if anything, raises the value of a transparent shared benchmark; the royalty carries ~100% incremental margin, which is visible in gross margin moving 74.7%→82.2% and operating margin 38.4%→46.5%. In Software, the story is inverted: agentic AI plus cheap development compresses the barrier to decision-management and fraud platforms, and FICO does not own the bureau data that would give it a durable AI data advantage. The net read is favorable but asymmetric — the toll booth is structurally AI-resistant, the software franchise is structurally AI-contested, and the real threat to the toll booth is regulatory permission, not machine capability.

Thesis breaker A sustained decline in FICO score pull volumes at large lenders while origination activity is flat — evidence that AI-driven internal or alternative scoring is displacing the reference pull rather than layering on top of it.
What the market may be underestimating

Upside AI-native lenders and private-credit funds still need a common language to price and sell loan pools; FICO can monetize each additional automated decision as agents call the score API far more frequently than human underwriters ever did.

Downside FICO's data leverage is borrowed — the bureaus hold the raw files. Cheap modeling lets bureau-owned or cash-flow-underwriting alternatives close the accuracy gap so completely that the only remaining argument for FICO is inertia, which regulators can revoke faster than a moat erodes.'

Outcome range spread 47 · unresolved

34Bear case
62Central case
81Bull case
Three headline numbers, deliberately never blended: Position (which way), Exposure (how much it matters at all), Confidence (how sure). The fingerprint asks every stock the same 11 questions so companies a sector label would lump together get told apart. Not an input to GEM/Coal or the Q/V/S lenses.
Growth Outlook
Analyzed 2026-08-17 16:34

The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.

Accelerating A monopoly-priced score asset is repricing sharply — matched-quarter revenue +27% and operating income +45% show the price step-up flowing through at near-zero incremental cost, but the mechanism is a step-function, not a rate, so structural growth reverts well below what the price assumes. conf 7/10
Share gain Category growing · Category (application software) grows ~7.2% CAGR with margins expanding industry-wide, but is entering an early slowdown; FICO's recent 15.9% YoY (27.3% on the newest matched quarters) runs 9-20pp above it.
Next 2 quarters
Accelerating
The repriced score royalty is still in the year-over-year comparison for the next print and only begins to lap late in the window; incremental revenue drops through at almost no cost, so operating income should again grow well ahead of revenue. Volume weakness is a drag but not enough to offset a step-change in price per score.
↑ above expectations
Year 1
Growing
Full-year revenue growth remains well above the category on pricing plus resilient platform ARR, but the exit rate is materially lower than the current 27% as the price increase annualizes. Earnings still outgrow revenue on leverage and buyback-supported per-share math.
≈ inline with expectations
Years 2–3
Growing
Structurally the earnings power still compounds — the mandate, the switching cost of embedded score cutoffs, and the software platform support low-to-high-teens revenue with faster earnings. But the current 27% is a step-function artifact; absent an equally large repeat hike, growth reverts toward the 14-15% historical revenue CAGR, and alternative-score acceptance plus political scrutiny of pricing tilt the risk to the low side of that.
↓ below expectations
The creme: each rung's call measured against what's already printed (vs analyst estimates · vs guidance / FY consensus · vs price-implied growth) — expectations in print are already in the price, so only the variant margin can pay. Hover a rung's chip for the margin read.
Growth drivers
84 Score pricing step-up + direct license channel — The dominant mechanism behind the jump from ~16% to +27.3% revenue YoY is per-score royalty repricing in the mortgage/B2B scores line, amplified by the direct-license route that shortens the bureau chain and lets FICO capture more of the end price. Because the score is a mandated input in agency-eligible lending workflows, price is largely non-negotiable at current volumes — hence op income +45.3% on +27.3% revenue.
67 Near-zero marginal cost operating leverage — Incremental score revenue carries essentially no delivery cost, so pricing converts almost fully to operating income. This is why earnings CAGR (23.2%) and FCF CAGR (28.7%) both run far above revenue CAGR (14.7%), and why the current quarter shows 18pp of margin-driven excess earnings growth.
40 Outgrowing its category by a wide margin — Recent YoY 15.9% vs industry 6.8% is a +9.1pp gap while the application-software category is in an early slowdown. The gap comes from pricing on a non-substitutable asset rather than from software share wins, which makes it more durable near-term but less compounding long-term.
29 Software/platform ARR land-and-expand — The decision-platform and fraud businesses add a second, volume-independent growth line with high retention economics; revenue confidence metrics (volatility 0.012, steady quarterly trend, all years positive) suggest this base is not the source of variability.
Growth risks
68 Price increases lap — the rate decays even if the level holds — A one-time royalty step-up inflates YoY for four quarters and then vanishes from the growth rate. Sustaining +27% requires a repeat increase of similar magnitude annually, which is a policy choice exposed to counterparty and political pushback. This is the single largest reason near-term strength should not be extrapolated to years 2-3.
54 Regulatory and competitive optionality around the score mandate — Agency acceptance of a competing score reduces the mandate's exclusivity at the margin and gives large lenders a credible negotiating alternative; scrutiny of score pricing as a housing-cost input adds political risk to the pricing lever precisely when it is being used hardest.
46 Mortgage volume sensitivity with 10y at 4.63 — Unit volumes are tied to originations and refis. Macro backdrop is flagged as headwinds with a 4.63 10y; pricing has masked soft volumes, but a further volume leg down would compound with the pricing lap into a sharp deceleration.
19 Category slowdown pressures the software half — Sector phase is slowdown (demand score -1, category median growth 6.9%). Enterprise decision-platform budgets slow in that phase, so the non-score segment is unlikely to backfill any pricing-driven deceleration.
High rates (10y 4.63) suppress mortgage unit volumes, so FICO's growth is currently a price story layered on a soft-volume base — a fragile-looking but genuinely effective combination while the mandate holds. The world is simultaneously trying to reduce the score's chokehold: agency acceptance of alternative scores and political attention to housing-transaction costs are the two forces that could convert an unlimited pricing lever into a negotiated one. Credit normalization raises demand for fraud and decisioning analytics, a modest offset. Net: the near-term world is supportive of earnings, the multi-year world is slowly eroding the exclusivity that makes the pricing lever work.
Growth position composite +18
ShrinkingStallingHoldingGrowingAccelerating
90Next 2 quarters · Accelerating
70Year 1 · Growing
70Years 2–3 · Growing
+18Composite (−100…+100)
A research prediction, not advice. Forward-graded: each rung is scored against the prints that follow it. Not an input to the GEM designation — track record first.
Claude Reading
Independent analyst synthesis · claude-opus-4-7 · generated 2026-08-15 10:35:32
Verdict Overvalued but not by 38% — fair value $850-950 pending confirmation of Q1-2026 as run-rate; wait one quarter before committing, then buy sub-$950 or sell above $1,200.

The raw numbers first: FICO's FY25 revenue of $1.99B grew 15.7% YoY with FCF of $770M — a ~38.7% FCF margin, which is genuinely exceptional. The most recent quarter (Mar-2026) at $691.7M revenue and $264.5M NI is a step-function jump from the $498-536M range of the prior four quarters — that's +35% sequential vs Dec-2025 and +39% YoY vs Mar-2025. Either something structural changed (Scores price hike flowing through) or there's a lumpy Scores-royalty true-up. If sustainable, run-rate revenue is $2.7B+ and FCF closer to $1.1B, which drops the P/FCF from ~30x to ~21x — not cheap but not egregious for a monopoly. If it's a one-off, the models' overvaluation call tightens. Nobody in the prior stack addressed this quarter's discontinuity, which is the single most important number in the file.

On the balance sheet: $3.06B debt against $134M cash and negative $1.75B equity looks scary but is a deliberate buyback-financed capital structure, not distress. At $770M annual FCF, net debt/FCF is ~3.8x — manageable for a business with 82% gross margins and near-zero capex ($8.9M). The synthesis flag "interest coverage dangerously low" is wrong on the numbers: operating income of $925M against ~$150-180M interest expense is 5-6x coverage. The pre-flight's "28:1 debt-to-cash ratio" framing is also misleading — FICO doesn't need cash because it generates cash. This is a Moody's/S&P/Autozone-style negative-equity compounder, not a leverage risk. Prior models over-index on the ratio and under-index on the coverage.

Where I side with the bears: at $1,086 and $23.5B market cap, EV is ~$26.4B, EV/FCF ~34x on trailing, and P/E 40.9x. Even granting monopoly economics, this requires ~15% FCF growth for a decade to justify. The 28.7% FCF CAGR is real but decelerating math — Scores pricing has finite headroom before CFPB/political intervention becomes non-hypothetical (mortgage lobby is already agitated about the tri-merge fee hikes). The synthesis DCF at $687 fair value implies terminal growth expectations of maybe 3-5% and a discount rate that penalizes the political risk — reasonable but probably too punitive given the moat's demonstrated durability across three decades and multiple attempted disruptions (VantageScore has existed since 2006 and gone nowhere). My contrarian read on the models: they're triangulating to "overvalued" using the right skepticism but wrong magnitude. Fair value is $750-850, not $687, and the Q1-2026 print — if it holds — could re-rate this to $1,000+ legitimately.

The insider activity is uninformative — pure comp-driven option exercises and RSU vests, no discretionary sells or buys of note. The 46% drawdown mentioned in pre-flight has done real work: this stock was $2,000+ and is now $1,086, so the market has already meaningfully de-rated the pricing-power narrative. That's important — buying at $1,086 is not buying at peak euphoria. My verdict: I partially agree with the overvalued call but dissent on the magnitude and on the debt-risk framing. The right trade is patience — wait to confirm whether Q1-2026's $692M revenue is the new baseline or a one-time step. If baseline, fair value is $1,100-1,200 and the market is roughly right. If lumpy, fair value is $800 and there's another 25% downside. The thesis is binary on a single data point, which argues for waiting one more quarter rather than committing capital now. The synthesis "$671 fair value" understates the moat's demonstrated durability; the narrative bulls at $1,500+ overstate the transformation story. Truth is boringly in between.

GPT Reading
Independent reading · gpt-5.4 · generated 2026-08-15 10:35:48
Verdict Fairly to slightly overvalued at $1,086 — extraordinary margins and cash generation justify a premium, but a price closer to $850-$950 better fits the underlying growth and leverage profile unless the $690M quarter proves sustainable.

FICO’s raw numbers are much better than the “mature earner” label implies, but the stock is still asking investors to pay a growth multiple for a business that, however exceptional, remains fundamentally concentrated and already optimized. Revenue went from $1.32B in 2021 to $1.99B in 2025, a solid 10.8% four-year CAGR, while net income climbed from $392M to $652M, and operating margin expanded from 38.3% to 46.5%. That is elite software economics. The latest quarterly run-rate is even stronger: March 2026 revenue of $691.7M was up 38.7% from $498.7M a year earlier, and net income jumped to $264.5M from $162.6M, lifting net margin to 38.2%. But that quarter also looks like an outlier against the prior three quarters clustered around $512M-$536M of revenue. If I annualize the last four reported quarters, I get about $2.26B of revenue and roughly $760M of net income. On today’s $23.45B market cap, that is still around 10.4x trailing run-rate sales and roughly 31x run-rate earnings for a company whose long-term revenue growth profile has mostly been low-teens, not hypergrowth.

The quality of the business is obvious in cash flow. In fiscal 2025, FICO generated $778.8M of operating cash flow and $769.9M of free cash flow on just $1.99B of revenue, implying a stunning 38.7% FCF margin. Capex was only $8.9M, so earnings largely convert. Gross margin of 82.2% and operating margin of 46.5% are the kind of numbers that justify a premium. What stands out to me, though, is that the business is already running near peak efficiency. There is no obvious hidden margin unlock left when you are already at 30%+ net margins every quarter and nearly 47% operating margins annually. From here, sustaining the equity story requires continued pricing power and continued top-line growth, not just better execution. At 40.9x annual earnings and 31.1x EV/EBITDA, investors are not merely paying for quality; they are paying for quality plus durability plus further growth acceleration.

The balance sheet is the main friction against paying that kind of premium. Debt is $3.06B against only $134M of cash, equity is negative $1.75B, and the current ratio is 0.83. Negative equity by itself is not automatically alarming for a buyback-heavy, high-margin software company, but the capital structure does matter when you are already paying more than 30x earnings. Enterprise value is meaningfully above market cap because net debt is real here, and that is one reason EV/revenue sits near 14.7x. The business can service leverage because free cash flow is strong, but debt removes some of the “software multiple immunity” investors might otherwise grant. If the market ever decides this is a 20x-25x earnings compounder rather than a 40x one, leverage will amplify the equity downside more than many shareholders appreciate.

The best case against my caution is that FICO may deserve to break conventional valuation frameworks because the business behaves less like ordinary application software and more like a private tax on credit formation. The annual numbers show consistent acceleration: revenue growth was 4.4% in 2022, 9.4% in 2023, 13.9% in 2024, and 15.7% in 2025, while net income growth reaccelerated to 27.1% most recently. The latest quarter’s 38.7% revenue growth and 62.7% earnings growth are not the profile of a stagnating toll-booth. Free cash flow of $770M means the stock is trading around a 3.3% FCF yield on trailing figures, which is not absurd for a business with this moat, this margin structure, and this level of recurring demand. If that March 2026 quarter marks a genuine new baseline rather than a one-off surge, then the earnings power could be stepping up faster than the backward-looking multiples suggest, and a 30x-plus multiple would be easier to defend.

What would change my mind is straightforward. If the next two quarters hold revenue above $650M and net margins stay north of 35%, then the run-rate would move decisively beyond $2.5B revenue and $900M earnings power, and I would accept that the market is paying for a real reacceleration rather than just a great franchise. I would also want to see debt come down materially from $3.06B or at least cash build faster, because today the valuation leaves little room for a regulatory, cyclical, or refinancing stumble. Conversely, if revenue falls back toward the prior $500M-$540M range, then the March quarter was a spike, and the current price looks far too rich for a business growing in the low-to-mid teens.

Grok Reading
Independent reading · grok-4.5 · generated 2026-08-15 10:36:35
Verdict Overvalued at $1086; quality monopoly but ~25-35% rich vs ~$750-850 fair value even after crediting the $692M quarter

The raw numbers describe a cash-compounding machine with genuine pricing power, not a software growth story in the SaaS sense. Annual revenue climbed from $1.32B in FY2021 to $1.99B in FY2025 at a 14.7% CAGR while earnings compounded at 23% and free cash flow at nearly 29%, landing at $770M of FCF on barely $9M of capex. Gross margin sits at 82%, operating margin at 46.5%, and net margin at 33%—and the March 2026 quarter just printed $691.7M of revenue at a 38.2% net margin, a 39% year-over-year jump from the $498.7M prior-year quarter. That step-up is the single most important data point in the set: it looks like a Scores pricing reset landing in full, not organic volume. On a TTM basis the business still trades at 41x earnings, 13.4x sales, and roughly 30x FCF; those multiples only clear if mid-teens revenue growth and continued margin expansion are durable for years. The balance sheet is the counterweight—$3.06B of debt against $134M of cash and negative equity of $1.75B—which means this is a leveraged capital-return vehicle riding a monopoly toll booth, not an unlevered compounder.

What stands out against the prior models is that the composite fair-value work around $670–$690 appears to underweight the March quarter’s run-rate implication and the operating leverage already visible in the annuals (operating income from $506M to $925M over four years). If the $691.7M quarter is closer to the new baseline than a one-off, FY2026 revenue could clear $2.4B+ with net income well above $800M, which would compress the forward multiple meaningfully. The archetype label “mature earner” is directionally right, but the earnings power is still expanding faster than a classic mature utility. Insider activity is noise—option exercises and tax withholds, no open-market selling signal either way. Cash conversion is pristine: $779M operating cash flow against $652M of net income.

The strongest case against this more constructive read is straightforward and quantitative. Even giving the March quarter full credit, you are still paying 14.7x EV/revenue and 31x EV/EBITDA for a business whose core product is a regulatory and political target; the bear case that Scores pricing invites congressional and CFPB scrutiny is not theoretical. Debt service and refinancing risk are real with a current ratio of 0.83 and a debt-to-cash ratio near 23x—any sustained higher-rate regime or credit-cycle slowdown that hits mortgage and auto originations directly hits Scores volumes. The valuation synthesis flag that almost no scenarios support $1,086 is directionally correct if growth reverts to high-single-digits; the narrative premium (platform-monopoly, “Visa of credit decisions”) has already been paid, and the stock has previously de-rated hard when that story wobbled. A smart opponent would also note that software adjacency (decision management, analytics) has never carried the P&L the way Scores has, so the multiple embeds a transformation that the income statement has not yet proven at scale.

I would flip toward fair value or undervalued if two consecutive quarters hold revenue above $600M with net margins at or above 35%, confirming the pricing step-up is structural, or if net leverage is visibly reduced below 2.5x EBITDA while FCF stays above $800M. A clear regulatory green light on Scores fee structures, or a material decision-platform contract win that shows up as a distinct revenue line growing faster than Scores, would also move the needle. Conversely, any guidance cut tied to originations volume or a political intervention on pricing would confirm the overvaluation case immediately.

Big-3 Panel — where each AI stands
Each AI above independently stated a direction (undervalued, fairly valued, or overvalued) and how strongly it believes it (conviction, 0–5). We combine those into a Bull-Bear Index on a 0–10 scale: 5 is neutral, 10 is maximum bullish (undervalued at full conviction), 0 is maximum bearish. We compute the score ourselves with the same arithmetic for every seat — the models never grade their own bullishness — so the three are directly comparable. Δ shows how far each seat sits from the panel average of 3.0; a large Δ marks the dissenting voice, usually the one worth reading.
Claude claude-opus-4-7 2.0
overvalued · conviction 3/5 · Δ -1.0 vs panel · self: 4.0
GPT gpt-5.4 5.0
fairly valued · conviction 3/5 · Δ +2.0 vs panel · self: 4.0
Grok grok-4.5 2.0
overvalued · conviction 3/5 · Δ -1.0 vs panel · self: 3.0
Advanced Analysis Forensic deep-dive · separate lenses
Separate reads — Company Quality (is it a great business?), Valuation (is it mispriced?), and General Sentiment (how macro + narrative are pushing it), plus AI Impact (how the AI wave reshapes it), kept deliberately apart · 2026-08-15 10:45:02
Delvantic - Cairn AI
Great business, wrong price — wait for a dip 7/10
Fortress-quality standard-setter, but priced for perfection right after a cracked narrative — I want this 20%+ lower before I do anything real.
The cruxWhether Q1-2026's ~$690M quarter is the new run-rate or a one-off; that single data point decides if today's $1,086 is expensive or fair.
Forensic checks Derived mechanically from FICO's filed financials — not from the AI lenses
Liquidity & RunwaySelf-Funding
DilutionShare Count Shrinking
Earnings QualityHigh Earnings Quality
The four lensesswitch a tab for its full read — score + evidence
Company Quality
+79
Fortress
edge √Σ 157 · risk √Σ 49 · conf 8/10

FICO is running at rare software-franchise intensity: revenue compounded from 1.32B to 1.99B over five years (roughly 11% CAGR), gross margin expanded from 74.7% to 82.2%, and operating margin lifted from 38.4% to 46.5%. Net income grew from 392M to 652M and FCF from 416M to 770M, with OCF/NI of 1.19x and accruals at -5.6% of assets - earnings are cash-backed, not accrual-inflated. Beneish M of -2.65 and Altman Z of 9.91 corroborate clean mechanics. Capital allocation is disciplined for a mature earner: diluted shares shrank at -4.3% CAGR (29.3M to 24.6M), buybacks ran 702% of SBC, and SBC at 7.9% of revenue is contained given the growth. The one real qualifier is the balance sheet: net debt of ~2.92B against only 134M of liquid cash, with 399.5M short-term debt exceeding cash on hand. Given 770M annual FCF this is easily serviceable, but it means the company is levering the equity aggressively to fund buybacks rather than sitting on a cash fortress. Insider tape shows only routine option-exercise/withhold mechanics and awards - no P (open-market buys) and small S activity - so no directional signal. The overall picture is a durable, high-integrity analytics business firing on operating leverage.

Strengths 4
m85
Elite and expanding margins
Gross margin 74.7% to 82.2% and operating margin 38.4% to 46.5% over five years - real operating leverage on a growing revenue base, characteristic of a scaled analytics/software franchise.
m80
Cash-backed earnings
OCF/NI 1.19x, accruals -5.6% of assets, Beneish M -2.65, Altman Z 9.91. FCF of 770M exceeds net income of 652M - reported profit is real.
m78
Aggressive per-share concentration
Diluted share count fell from 29.3M to 24.6M (-4.3% CAGR), buybacks at 702% of SBC. Per-share value is being concentrated meaningfully.
m70
Sustained double-digit growth at scale
Revenue 1.32B to 1.99B (~11% CAGR) with accelerating profitability - not a mature-and-decaying earner, still compounding.
Concerns 2
m45
Levered balance sheet
Net debt ~2.92B, liquid cash only 134M, and ST debt of 399.5M exceeds cash. Comfortably covered by 770M FCF but leaves no cushion - the balance sheet is a constraint, not armor.
m20
SBC at 7.9% of revenue
Not egregious for software and more than offset by buybacks, but worth monitoring as an ongoing dilution vector.
This is a genuinely high-quality business - the kind of margin structure, cash conversion, and per-share discipline you rarely find together. Revenue is compounding double digits, operating margin has climbed nearly 800bps in five years, and management is aggressively shrinking the float rather than sponsoring it with SBC. The only thing keeping me from calling it flat-out pristine is the balance sheet: they have chosen to lever up and buy back stock, which is fine while FCF prints 770M, but it means there is no true fortress cash position. I would not stop at 'Strong' - the operating quality here is Fortress-tier; the leverage is a deliberate capital-structure choice, not a distress signal.
Verify before trusting this (5)
  • Segment mix between Scores (mortgage-sensitive) and Software - concentration and cyclicality of Scores revenue
  • Customer concentration (top-10 % of revenue) in the Scores business
  • Debt maturity ladder and covenants behind the 2.92B net debt and 399.5M short-term portion
  • Pricing actions on mortgage/auto/card scores and any regulatory or GSE pushback
  • Detail of SBC grants vs. executive comp structure to confirm buyback truly neutralizes dilution long-term
Valuation / Mispricing
-64
Rich
edge √Σ 43 · risk √Σ 118 · conf 7/10
Price $1,085.78 vs deserved value ~$700-900 (composite $687, signal-adj $671, DCF $589); stock sits 20-55% above deserved - no margin of safety, modest overpricing. attractive below $800.00

The composite fair value sits at $686.76 and the signal-adjusted FV at $671.22, implying roughly -38% downside from the $1,085.78 price. The DCF pins it lower at $588.85 and the EPV floor is just $213.99, while the anchored-PE of $1,355.34 is the lone method supporting today's tape - and it does so only by capitalizing recent multiple expansion, which is exactly what a skeptic should discount. Even generously weighting the anchored-PE (given the Fortress quality grade, 79) to lift deserved value into the $800-900 range, the stock still trades above it.

Cheap signals 2
m35
Anchored-PE supports ~$1,355
The historical PE anchor implies $1,355.34, about 25% above price - the only method suggesting upside, and it reflects that the market has repeatedly paid premium multiples for this franchise.
m25
Quality warrants a premium to raw DCF
Fortress quality (score 79), high margins, and buyback-driven per-share compounding justify paying above the $589 DCF - but not the full $497 gap to today's price.
Rich / priced-in 4
m72
Composite FV 38% below price
Both composite ($686.76) and signal-adjusted ($671.22) fair values imply -38% downside from $1,085.78. Multiple independent methods converge below price.
m65
DCF says $589
DCF fair value of $588.85 is 46% below the current quote, suggesting the market is pricing in growth/margin assumptions well beyond a disciplined cash-flow model.
m55
EPV floor near $214 signals thin downside cushion
The earnings-power floor of $213.99 is only ~20% of price - if growth optionality ever gets repriced, the fall-back valuation is severe.
m40
Priced for platform-monopoly perfection
At ~1.6x sales narrative premium, the tape assumes uninterrupted score-pricing power and mortgage-origination tailwinds - any commoditization or regulatory pushback re-rates the multiple hard.
I like the business, I do not like the price. Three of four methods put deserved value between $214 and $687, and only the anchored-PE - which is essentially 'the market recently paid this much' - gets me above the quote. Quality earns a premium, but not a 55% one over the DCF. I would want this under $800 before treating it as anything other than fully priced; today it is a 'own if you already own it, do not add' setup for me.
Verify before trusting this (5)
  • Forward guidance on Scores segment price increases and unit volume assumptions in the anchored-PE
  • Sustainability of operating margin expansion vs one-time leverage
  • Any regulatory or GSE commentary on alternative credit-score adoption (VantageScore)
  • Mortgage origination sensitivity in the DCF revenue build
  • Buyback pace vs free cash flow to validate per-share compounding rate
General Sentiment
-45
Headwind
tail √Σ 46 · head √Σ 95 · conf 6/10

The macro backdrop is mildly supportive - VIX at 14.3, S&P near highs, risk-on regime - which normally helps a 1.32-beta software name. But that tailwind is small and market-wide; the stock-specific pressure on FICO is negative. The July 30 post-earnings 17% drop on soft forward guidance is the dominant recent tape event, and it punctured the platform-monopoly narrative at exactly the moment investors were paying 1.6x sales and 62% above DCF for perpetual pricing power. Once a monopoly-narrative stock guides light, the story's durability rating drops and multiple compression lingers for weeks. Recent news flow (Marketplace partnerships, Informative Research joining the Mortgage Direct License Program, Alogram AI fraud suite) is modestly constructive and feeds the 'expanding platform' angle, but these are incremental press releases, not narrative-resetting catalysts - not enough to overwrite a guide-down. Peer signal is mixed to negative for the cohort: TRU rallying on its own numbers doesn't help FICO, and the Upstart chatter reminds the market that credit-scoring adjacencies are being built around FICO, not through it. Analyst tone is not aggressive on either side, leaving the July print as the anchor. Net: risk-on tape is a minor tailwind, but the freshly-wounded narrative and the still-fresh guide-down are the bigger force. Pressure leans negative, not catastrophically so.

Tailwinds 2
m35
Risk-on tape, low VIX
VIX 14.3 and S&P near highs in an established 10-day risk-on regime is a genuine but ordinary tailwind for high-beta software; helps stabilize, not re-rate.
m30
Marketplace / platform news flow supportive
Informative Research joining Mortgage Direct License and Alogram AI fraud on FICO Marketplace feed the 'platform expansion' storyline that bulls need; modest but directionally helpful in the very short term.
Headwinds 4
m70
Guide-down cracked the monopoly narrative
The July 30 -17% move on soft forward guidance is the defining recent event. For a platform-monopoly story priced at a large premium to DCF, a guide cut directly attacks the durability leg of the thesis and tends to cap the multiple for a quarter or more.
m45
Narrative running ahead of fundamentals
Stock sits 62% above DCF fair value on belief in perpetual pricing power and AI adjacency; with intensity strong but durability only moderate and cult low, there is no fanatic base to defend the premium if news disappoints again.
m35
Commoditization chatter in the cohort
Upstart / alternative-score coverage and fintechs building around rather than through FICO keep the bear frame alive in financial media, a slow drip on sentiment even without a specific FICO catalyst.
m30
Rates backdrop unfriendly to premium multiples
10y at 4.63% and market PE 26.2 pressure the highest-multiple software names most; FICO's 1.32 beta and rich multiple mean any risk-off flinch marks it down faster than the tape.
Net pressure leans negative. The tape itself is friendly, but the July guide-down is a recent, visible wound on a narrative-priced stock, and the incremental Marketplace announcements are not big enough to heal it. I read this as a real but ordinary headwind - not a collapse, just a name where the story is on probation and the multiple has no cushion. Wait for either a clean quarter or better entry; buying into a wounded platform-monopoly narrative at a premium is where sentiment can keep grinding for another 4-8 weeks.
Verify before trusting this (4)
  • Whether next quarter's print re-affirms or re-cuts guidance - a second cut would deepen the de-rating materially
  • Analyst target revisions post-July print - are cuts done or still filtering through
  • Any concrete Marketplace revenue disclosure that turns partnership PR into a real number
  • Rotation signals: if mortgage / credit-cycle names get bid, FICO gets a passive lift
The market-wide tape + this name's exposure to it (beta / sector / narrative durability). Context on the non-fundamental pressure — not a call on the business or the price. processId: detail-general-sentiment
AI Impact
+28
Moderately favorable — the standard survives even as the model commoditizes
opp √Σ 113 · thr √Σ 0 · conf 7/10

AI reaches FICO through two separate channels with opposite signs. In Scores, the predictive math is already commoditized and further commoditization changes little, because customers do not buy accuracy — they buy a number every counterparty, regulator and securitization desk agrees on, that can be defended in an adverse-action letter. Cheap AI multiplies opaque internal models and, if anything, raises the value of a transparent shared benchmark; the royalty carries ~100% incremental margin, which is visible in gross margin moving 74.7%→82.2% and operating margin 38.4%→46.5%. In Software, the story is inverted: agentic AI plus cheap development compresses the barrier to decision-management and fraud platforms, and FICO does not own the bureau data that would give it a durable AI data advantage. The net read is favorable but asymmetric — the toll booth is structurally AI-resistant, the software franchise is structurally AI-contested, and the real threat to the toll booth is regulatory permission, not machine capability.

AI opportunities 8
m79
Underlying Need Persistence
Lenders will always need to price consumer credit risk and prove the basis of the decision.
m24
Solution Persistence
The three-digit standardized score persists; FICO's specific brand of it is a policy-dependent choice.
m45
Responsibility Transfer
FICO is partly paid to be the defensible, examinable answer.
m41
Scarcity Migration
Model-building becomes abundant; a trusted, shared, regulator-blessed number becomes rarer.
m17
Customer DIY Preference
Big lenders already build custom models and still pull FICO as the reference.
m21
AI Intermediation Position
Agentic underwriting still calls the score as a service — unless it goes straight to raw data.
m33
AI Margin Conversion
Savings land in profit because Scores has essentially no marginal cost and pricing is set, not competed.
m22
Revenue Unit Durability
Price per score pull is durable; pull count is the exposed variable.
AI threats 0

None surfaced.

Own FICO for the standard, not the algorithm — cheap AI erodes FICO's modeling edge while making its regulator-accepted reference number relatively scarcer. The asymmetry is the trade: Scores is an AI-resistant coordination monopoly with ~100% incremental margin (GM 74.7%→82.2%, OpM 38.4%→46.5%), while the Software segment is squarely in the AI-native entrant blast radius, so the position score of 63 sits on top of a wide 34–81 range. What kills it is not better AI models — it is permission: watch FHFA/GSE score-adoption mechanics and VantageScore penetration of mortgage and securitization pulls, plus score pull volumes versus origination volumes, which is where displacement shows up before pricing does. What unlocks the bull case is agentic underwriting multiplying score calls per loan while price per pull keeps rising.
Verify before trusting this (8)
  • Mortgage and card origination volumes
  • Adverse-action explainability rules
  • Securitization disclosure requirements
  • Alt-score accuracy claims in lender pilots
  • Cash-flow underwriting adoption
  • Regulatory stance on opaque models
  • Score references in ABS/RMBS documents
  • Investor reliance on FICO bands
The structural effect of the AI wave on this specific business over the next ~5 years — demand, cost leverage, moat, barriers to entry, position in the AI stack. The reality beneath the AI story, not the story's market pressure (General Sentiment owns that) — and not a call on the business today or the price.
Growth Outlook
+18
Accelerating
edge √Σ 118 · risk √Σ 100 · conf 7/10

High rates (10y 4.63) suppress mortgage unit volumes, so FICO's growth is currently a price story layered on a soft-volume base — a fragile-looking but genuinely effective combination while the mandate holds. The world is simultaneously trying to reduce the score's chokehold: agency acceptance of alternative scores and political attention to housing-transaction costs are the two forces that could convert an unlimited pricing lever into a negotiated one. Credit normalization raises demand for fraud and decisioning analytics, a modest offset. Net: the near-term world is supportive of earnings, the multi-year world is slowly eroding the exclusivity that makes the pricing lever work.

Growth drivers 4
m84
Score pricing step-up + direct license channel
The dominant mechanism behind the jump from ~16% to +27.3% revenue YoY is per-score royalty repricing in the mortgage/B2B scores line, amplified by the direct-license route that shortens the bureau chain and lets FICO capture more of the end price. Because the score is a mandated input in agency-eligible lending workflows, price is largely non-negotiable at current volumes — hence op income +45.3% on +27.3% revenue.
m67
Near-zero marginal cost operating leverage
Incremental score revenue carries essentially no delivery cost, so pricing converts almost fully to operating income. This is why earnings CAGR (23.2%) and FCF CAGR (28.7%) both run far above revenue CAGR (14.7%), and why the current quarter shows 18pp of margin-driven excess earnings growth.
m40
Outgrowing its category by a wide margin
Recent YoY 15.9% vs industry 6.8% is a +9.1pp gap while the application-software category is in an early slowdown. The gap comes from pricing on a non-substitutable asset rather than from software share wins, which makes it more durable near-term but less compounding long-term.
m29
Software/platform ARR land-and-expand
The decision-platform and fraud businesses add a second, volume-independent growth line with high retention economics; revenue confidence metrics (volatility 0.012, steady quarterly trend, all years positive) suggest this base is not the source of variability.
Growth risks 4
m68
Price increases lap — the rate decays even if the level holds
A one-time royalty step-up inflates YoY for four quarters and then vanishes from the growth rate. Sustaining +27% requires a repeat increase of similar magnitude annually, which is a policy choice exposed to counterparty and political pushback. This is the single largest reason near-term strength should not be extrapolated to years 2-3.
m54
Regulatory and competitive optionality around the score mandate
Agency acceptance of a competing score reduces the mandate's exclusivity at the margin and gives large lenders a credible negotiating alternative; scrutiny of score pricing as a housing-cost input adds political risk to the pricing lever precisely when it is being used hardest.
m46
Mortgage volume sensitivity with 10y at 4.63
Unit volumes are tied to originations and refis. Macro backdrop is flagged as headwinds with a 4.63 10y; pricing has masked soft volumes, but a further volume leg down would compound with the pricing lap into a sharp deceleration.
m19
Category slowdown pressures the software half
Sector phase is slowdown (demand score -1, category median growth 6.9%). Enterprise decision-platform budgets slow in that phase, so the non-score segment is unlikely to backfill any pricing-driven deceleration.
vs expectations: ~6m above · 1y inline · 2-3y below
The forward growth verdict — is the business itself likely to grow (next 2 quarters / year 1 / years 2–3), judged against its category and against printed expectations. The full horizon ladder + creme renders on the Growth Outlook card above. Not a call on the price (Valuation owns that) or the tape (Sentiment owns that).
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Lenses kept deliberately separate — Company Quality (price-agnostic), Valuation (price-conditional), General Sentiment (non-fundamental macro/narrative pressure), AI Impact (structural ~5yr AI exposure), and Growth Outlook (the forward growth verdict). The scores are not blended. Filing-level items (convertibles, lock-ups, customer concentration) are v2 — see each lens's "verify."
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v1.1.562 · 9b2927c4 · 2026-08-22 16:52:06