Shares of credit scoring giant Fair Isaac (FICO, Financial) experienced a notable decline this week, dropping by 22.31%. The downturn followed remarks from Federal Housing Finance Agency (FHFA) Director Bill Pulte, who criticized FICO's recent price hikes and announced a review regarding the necessity of using credit reports from all three major credit bureaus.
In November, Fair Isaac raised the wholesale credit score prices for mortgage applications from $3.50 to $4.95. This week, Pulte questioned these increases and the transparency of inconsistent pricing from the major credit bureaus, expressing concerns over rising costs compared to past years. Additionally, Pulte's agency will explore alternatives to "tri-merged" scores, which could reduce the volume of FICO scores needed, potentially impacting FICO's business.
Analyzing Fair Isaac Corp's financials, the company shows a robust profitability grade, with a high ROIC of 44.46% and an expanding operating margin of 44.16%. The firm's Piotroski F-Score of 8 indicates a healthy situation, while its Altman Z-Score of 14.33 reflects strong financial health. However, the company faces some medium-degree warning signs related to long-term debt and insider selling activities.
From a valuation perspective, Fair Isaac (FICO, Financial) is considered "Modestly Overvalued" according to its GF Value of $1,315.23. For further details on GF Value, visit the GF Value page.
The company's forward PE ratio is 58.4, and it maintains a Classification of "Classic Growth," with strong financial health and growth grades. Despite recent stock price challenges, the company continues to demonstrate consistent revenue and earnings growth.
