Fair Isaac Stock (FICO) Falls Another 12% as Housing Director Takes Aim at Company

The stock of Fair Isaac (FICO) fell another 12% on May 27 and was once again the worst performer in the benchmark S&P 500 index.

The latest selloff came after Bill Pulte, Director of the Federal Housing Finance Agency, again took aim at the credit scoring company on social media. In a post on X, formerly Twitter, Pulte wrote that he’s “Still not happy with FICO,” and said that his agency plans to take a closer look at FICO’s practices and provide an update “in (the) next 1-3 weeks.”

That was enough to send FICO stock plunging. The company’s share price has now declined 32% in the last five trading sessions and is on track for its worst stretch in years. Pulte has been increasingly outspoken about his dissatisfaction with Fair Isaac, which provides FICO credit scores that are used almost universally by banks and other lenders to evaluate creditworthiness.

Raising Prices

In particular, Pulte has taken issue with Fair Isaac’s move at the end of last year to raise its wholesale royalty fee for credit scores to $4.95 from $3.50, an increase of 41%. In its defense, Fair Isaac has said in a blog post that “the royalty FICO collects for the FICO Score is the lowest among all other components commonly included in mortgage closing costs.”

While that might be true, a growing number of decisionmakers and lawmakers in Washington, D.C. are taking aim at Fair Isaac and what they call “anticompetitive practices,” noting that the company has a near-monopoly position in U.S. credit scores. Republican Senator Josh Hawley of Missouri has twice written to the U.S. Justice Department demanding an investigation into Fair Isaac’s practices.

Year-to-date, FICO stock has fallen 25%.

Is FICO Stock a Buy?

The stock of Fair Isaac has a consensus Strong Buy rating among 10 Wall Street analysts. That rating is based on eight Buy and two Hold recommendations issued in the last three months. The average FICO price target of $2,481.00 implies 65.14% upside from current levels.

Read more analyst ratings on FICO stock