Fair Isaac’s Market Resilience and Pricing Strategy Justify Buy Rating Despite Regulatory Concerns

Raymond James analyst Patrick O’Shaughnessy has maintained their bullish stance on FICO stock, giving a Buy rating today.

Patrick O’Shaughnessy has given his Buy rating due to a combination of factors surrounding Fair Isaac’s market position and pricing strategy. Despite recent comments from the FHFA Director suggesting concerns over FICO’s pricing power, O’Shaughnessy believes that the FHFA’s ability to directly influence FICO’s pricing is limited. The FHFA does not have the authority to regulate FICO’s pricing directly, and any potential changes, such as reducing the number of required credit scores, are currently on hold.
O’Shaughnessy also notes that FICO’s pricing, even with recent increases, remains a small fraction of the total cost of credit reports, which supports its value proposition to lenders and borrowers. Furthermore, the alternative option of replacing FICO with VantageScore is considered unlikely due to the potential disruption it could cause to the mortgage-backed security ecosystem. These factors contribute to O’Shaughnessy’s confidence in Fair Isaac’s continued market strength, justifying the Buy rating.

In another report released today, Jefferies also maintained a Buy rating on the stock with a $2,500.00 price target.

Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FICO in relation to earlier this year.