Fair Isaac Corp

Fair Isaac (FICO) has filed 137 AI-based patents, indicating a strong commitment to innovation in the AI space. The manager believes that the company is well-positioned to benefit from the ongoing AI revolution, as it embraces AI in ways that enhance its competitive advantages. This includes leveraging proprietary data and maintaining system-of-record status, which are crucial for success in the evolving technological landscape. The manager's confidence in Fair Isaac's future prospects is reflected in their decision to increase their position in the company.

Fair Isaac (FICO) is positioned for strong growth, with a projected EPS growth of 60% for 2026 and a 20x P/E ratio. The company has demonstrated a robust business model, supported by a significant buyback program, which reflects management's confidence in future performance. The raised guidance and strong fundamentals indicate that FICO is well-equipped to capitalize on emerging opportunities in AI, enhancing its competitive moat in the industry.

Fair Isaac Corporation (FICO) reported a solid Q4 2025 result with, in our view, a highly conservative earnings guidance for fiscal year 2026. Despite a decline in share price of almost -37% in the March quarter, earnings expectations for the business have continued to creep up. FICO’s multiple is now more than one standard deviation below its 10 year average, and historically, when it reaches these depressed levels, it has staged a sharp rebound. We believe that FICO’s moat remains intact and that the company will continue to demonstrate strong earnings growth, particularly with the rollout of the Direct Licensing Program.

Fair Isaac, the data-analytics firm known for creating the FICO® credit score, faced a challenging quarter with a significant stock decline of -37%. This drop was primarily attributed to valuation concerns following a run-up in late 2025. The fund reduced its holding in Fair Isaac, which ended Q1 as the No. 15 position in the portfolio. The overall market sentiment towards tech-oriented names was affected by AI-related uncertainties, contributing to the stock's underperformance.

Shares of Fair Isaac (FICO) fell approximately 35% in the quarter, with most of the weakness occurring in March as mortgage rates moved back above 6%. The credit bureaus’ announcement of 99-cent pricing for the competing VantageScore added further pressure to sentiment. This decline reflects broader skepticism toward the company's competitive position in the market, particularly in light of emerging pricing pressures from competitors.

Fair Isaac, known for its FICO score, was also hurt by concerns about growing competition that we believe are overblown as the company continues to deliver considerable value to its customers. Despite the challenges faced by the software sector, we maintain a positive outlook on Fair Isaac's ability to provide significant value, indicating our belief in its strong market position and resilience against competitive pressures.

Fair Isaac Corp was mentioned as one of the top five performance detractors during the first quarter, suffering from prevailing AI and private credit narratives. Additionally, it faced regulatory and competitive concerns, which contributed to its performance issues.

Fair Isaac is a leading analytics and software company best known for its FICO credit score, widely used in consumer lending. Despite challenges from increasing competition and execution issues, management has outlined clear strategies to address these concerns. The company recently made its largest single-quarter stock buyback in history and raised guidance, indicating confidence in its future performance. We remain optimistic about the value of the company’s data and its ability to monetize it, especially as the AI investment theme continues to gain traction.

Fair Isaac Corporation (FICO) continues to provide the most predictive scores in the market and remains dominant in non-conforming loan credit scoring, with 90–95% of non-conforming loans using FICO scores. This dominance adds to our conviction in its ability to maintain share and drive strong pricing over the long term. The stock rebounded more than 20% in early October following the launch of its FICO Mortgage Direct License Program, indicating a positive outlook for the company's growth and market position.

We initiated a position in Fair Isaac in the IT sector, indicating our belief in its potential for growth and value creation. The company is well-positioned to leverage advancements in AI, which continues to be a significant driver in the technology landscape. Our confidence in Fair Isaac stems from its strong market position and the competitive advantages it holds, which we believe will contribute positively to our portfolio.