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Investing.com - Goldman Sachs has reiterated its Buy rating and $1,915.00 price target on Fair Isaac (NYSE:FICO) following a non-deal roadshow with the company’s executives. The stock, currently trading near its 52-week low at $1,361, has experienced a significant 31.6% decline year-to-date. InvestingPro data reveals the company maintains impressive gross profit margins of 81.75%, though it trades at a relatively high P/E ratio of 52.4x.
The investment bank reports that Fair Isaac plans to maintain its current mortgage score pricing strategy despite the Federal Housing Finance Agency’s recent lender choice decision for conforming mortgages. Management indicated pricing increases for next year will be similar to recent years as the company continues to close what it sees as a significant price-to-value gap for FICO mortgage scores. With revenue growth of 16.66% in the last twelve months, the company’s pricing power remains strong. According to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ stocks, FICO maintains a solid financial health score.
Fair Isaac executives stated they have observed no market share shift to VantageScore since the FHFA announcement, expressing confidence that lenders will likely continue choosing Classic FICO scores due to their predictiveness, relatively low cost compared to overall mortgage closing costs, and high switching costs.
The company believes credit bureaus will remain rational in pricing VantageScore 4.0 since, as distribution partners, they significantly benefit from FICO’s current mortgage pricing structure. Fair Isaac noted it has alternatives to preserve its economics if VantageScore were to price aggressively.
These alternatives include lowering upfront score prices while monetizing later in the origination cycle, implementing volume-based and tiered pricing, going direct-to-lender, and potentially increasing auto score pricing.
In other recent news, Fair Isaac Corporation reported its Q3 2025 earnings, which exceeded expectations. The company announced a non-GAAP earnings per share of $8.57, surpassing the forecasted $7.68. Additionally, Fair Isaac’s revenue reached $536 million, exceeding the anticipated $515.33 million. In related developments, BMO Capital has adjusted its price target for Fair Isaac, lowering it to $1,650 from a previous $1,800. Despite this adjustment, BMO Capital maintained an Outperform rating on the stock. The price target revision followed insights shared by former Fair Isaac senior employee Clayton Dukes during an expert event. These recent developments reflect ongoing dynamics within the company and its industry.
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