FICO changes
Pick any two versions below to diff them.
- Price
- $771.19 → $711.23(−7.8%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 29, 2026 → Nov 4, 2026
- Next earnings is estimate
- Yes → No
- Thesis
- FICO trades at a discount because the US housing regulator is removing the special place of the FICO Score in mortgages, and the market fears that lenders will move to the cheaper VantageScore 4.0. FICO's recent growth came mostly from higher prices for mortgage scores, and in the quarter to June 30, 2026, Scores revenue grew 41%. On September 28, 2026, FHFA Director Bill Pulte said that Fannie Mae and Freddie Mac will use one pricing grid for FICO and VantageScore, and the Freddie Mac bulletin said that fees will not change with the score model from October 1, 2026. The three credit bureaus, which own VantageScore, sell it for about $1 per mortgage score. Rocket Mortgage said that it will make VantageScore 4.0 its preferred model for eligible loans. The shares fell about 27% on September 29, 2026. For the gap to close, FICO must show that lenders and mortgage bond investors keep using the FICO Score, so that mortgage score revenue holds up in the fiscal 2027 outlook and in the quarters after Rocket's switch. Software platform revenue must also keep growing fast. The first test is the fiscal Q4 2026 removed: report, expected at the end of October added: report on November 4, 2026, with the fiscal 2027 outlook. The next test is the fiscal Q1 2027 report, expected in early 2027, which shows the first full quarter of the new pricing grid. The gap can close only over several years, as quarterly data show how many lenders switch. The main risk is that a large share of mortgage lenders move to VantageScore and FICO must cut its prices.
- Checkpoints
- removed: Oct 29, 2026 (estimate): added: Nov 4, 2026: Fiscal Q4 2026 results and fiscal 2027 outlook. Pending. Watch: A fiscal 2027 outlook with growth in Scores revenue and comments that lenders keep pulling FICO Scores pass; an outlook with lower mortgage score revenue or a price cut fails. Feb 2027 (estimate): Fiscal Q1 2027 results: first full quarter of the single pricing grid. Pending. Watch: Stable or higher mortgage origination score revenue after Rocket's switch passes; a fall in mortgage score volume that is larger than the fall in mortgage applications fails. May 2027 (estimate): Fiscal Q2 2027 results: lender choice and Software growth. Pending. Watch: Mortgage origination score revenue that holds up for a second quarter under the single grid, with platform ARR growth above 30%, passes; a further fall in mortgage score volume or a price cut fails.
- Recent events
- Oct added: 23, 2026: FICO said that it will keep its wholesale mortgage score price at $10 for lenders and brokers in its Preferred Program, the same as a year earlier. The price covers both the Classic FICO Score and FICO Score 10T. Lenders must commit to FICO through participating tri-merge resellers. FICO did not say what other lenders pay. Oct 22, 2026: FICO said that it will report fiscal Q4 2026 results on November 4, 2026, after the market closes, with a call at 5:00 p.m. Eastern time. Oct 8, 2026: The Federal Housing Administration (FHA) issued Mortgagee Letter 2026-11. It lets lenders use FICO 10T and VantageScore 4.0, together with Classic FICO, to set the credit score of FHA-insured single-family loans. The change applies to FHA case numbers assigned from January 1, 2027. Oct 6, 2026: FICO said it will cut about 15% of its positions to remove management layers and use AI in product development. It expects about $27.0 million of pre-tax charges in fiscal Q4 2026, and it expects to complete the plan by the end of fiscal Q3 2027. Sep 30, 2026: Fannie Mae and Freddie Mac published new loan-level price rules. Freddie Mac said that credit fees will not change with the score model, FICO or VantageScore 4.0, for loans delivered from October 1, 2026. Sep 29, 2026: The shares fell about 27% after FHFA Director Bill Pulte said on September 28 that Fannie Mae and Freddie Mac will use one pricing grid for FICO and VantageScore. FHFA did not give a start date in that post. Rocket Mortgage said that it will make VantageScore 4.0 its preferred model for eligible loans. Jul 29, 2026: FICO reported fiscal Q3 2026 results. Revenue was $674 million, up 26%. GAAP EPS was $10.45 and non-GAAP EPS was $12.18. Scores revenue grew 41%, mostly from a higher unit price for mortgage origination scores. FICO raised its fiscal 2026 revenue guidance to $2.53 billion from $2.45 billion. Jun 8, 2026: FICO borrowed a $1.5 billion term loan and used it for a $1.5 billion accelerated share buyback with Wells Fargo, to be completed by September 30, 2026. It replaced its buyback program with a new $2.0 billion program. Apr 28, 2026: FICO reported fiscal Q2 2026 results. Revenue was $692 million, up 39%, and GAAP EPS was $11.14. Scores revenue grew 60% from a higher mortgage score price and more mortgage originations. FICO raised its fiscal 2026 revenue guidance to $2.45 billion from $2.35 billion.