Key Takeaways
- FICO shares fell 16% after the company said it would keep its wholesale mortgage score price at $10 for lenders in its new Preferred Program.
- The $10 price stays flat while VantageScore 4.0 sells for less than half as much, which suggests FICO’s run of mortgage score price increases is over.
- Analysts expect revenue growth to slow from 27% in fiscal 2026 to about 8% a year through fiscal 2028, and with the price flat, more of that growth has to come from volume.
- FICO reports fiscal fourth-quarter results on Nov. 4. That’s the first chance to see whether signing up lenders makes up for the flat price.
FICO (FICO) stock fell 16% today after the company said it won’t raise what it charges mortgage lenders for its score. FICO’s margins were built on raising that price, so this is a big change.
What exactly happened
After Friday’s close, FICO said it will keep its wholesale mortgage score price at $10 for lenders who sign up for its new Preferred Program. The $10 covers both the Classic FICO Score and the newer FICO Score 10T, and FICO called it “flat year-over-year pricing.” In return, lenders agree to pull FICO’s scores on every relevant application, though they can still pull a VantageScore too.
Wall Street wasn’t impressed. Before today’s open:
- Wells Fargo downgraded the stock to Equal Weight from Overweight and cut its target to $735 from $800, citing the pricing decision.
- JPMorgan cut its target to $900 from $1,530 and kept its Neutral rating.
- UBS cut its target to $942 from $1,100, also keeping Neutral.
FICO just put down its favorite lever
VantageScore 4.0 is approved for loans backed by Fannie Mae and Freddie Mac, and it costs less than half as much, The Wall Street Journal reported. So FICO is holding its price to keep lenders from switching.
TIKR tracks 21 analysts on FICO. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on FICO, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See FICO’s Analyst Ratings
Selling a score at a higher price costs FICO almost nothing extra, so most of each increase falls to profit. Its operating margin climbed from 31% in fiscal 2021 to 47% in fiscal 2025…
Now volume has to do the work
Analysts expect revenue to jump 27% to $2.53 billion in fiscal 2026, the year that ended in September. After that, they expect about 8% a year, reaching $2.95 billion by fiscal 2028…
With the mortgage price flat, that growth has to come from scoring more loans and from FICO’s software business. And a flat price gives analysts more reason to cut those numbers than to raise them.
A lot of this is already in the stock price. FICO traded at 17x forward earnings at Friday’s close, against a five-year average of 40x. It hit a low of 12x on Sept. 30, just after the Trump administration announced plans to end FICO’s mortgage scoring monopoly…
My take: holding the price is the smart way to keep lenders, but it ends the easiest part of FICO’s growth story. The stock is cheap against its own history, and I’d still wait for estimates to settle before buying.
Of course, if enough lenders sign up for the Preferred Program, volume could make up for the flat price. FICO reports fiscal fourth-quarter results after the close on Nov. 4, and that’s the first real test.
So what is FICO stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what FICO could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
