Fair Isaac Corporation (FICO): A Bull Case Theory 

We came across a bullish thesis on Fair Isaac Corporation on Rebound Capital’s Substack. In this article, we will summarize the bulls’ thesis on FICO. Fair Isaac Corporation’s share was trading at $1,620.14 as of October 16th. FICO’s trailing and forward P/E were 69.82 and 50.51 respectively according to Yahoo Finance.

FICO, the company behind the ubiquitous FICO Score, has become a cornerstone of the U.S. financial system through decades of innovation, strategic partnerships, and regulatory entrenchment. Founded in 1956 by William Fair and Earl Isaac, FICO introduced data-driven credit scoring, replacing subjective lending judgments with objective, predictive models. Its breakthrough came in the late 1980s with a partnership with the three major credit bureaus—Equifax, Experian, and TransUnion—creating a universal credit score.

Dominance was cemented in the mid-1990s when Fannie Mae and Freddie Mac mandated FICO scores for mortgage purchases, embedding the score across the mortgage value chain, from loan origination to secondary markets, regulators, and investors. Over 50 years, this integration built a durable moat, making the score indispensable to lenders, investors, regulators, and consumers, while new entrants like VantageScore face significant adoption hurdles.

In fiscal 2024, FICO generated $1.72 billion in revenue, driven by its Scores segment ($920 million) and expanding Software segment ($798 million). The Scores business, particularly B2B, benefits from near-monopoly pricing power, with fees rising from $0.50–$0.60 in 2022 to $4.95 in 2025. Its Software segment, anchored by the cloud-based FICO Platform, grew ARR by 31%, reflecting strong adoption of analytics and decision-making tools.

Despite this, FICO shares are down 37% from their all-time high due to rising competition from VantageScore in mortgages, fee increases, and high valuation pressures. While the business remains fundamentally strong and entrenched, the current drawdown raises questions about valuation and near-term investment risk, making it a case of strong fundamentals weighed against market sentiment and pricing concerns. This positions FICO as a high-quality, structurally defensible business with temporary market headwinds, offering a potential opportunity for investors willing to navigate short-term uncertainties.

Previously we covered a bullish thesis on Fair Isaac Corporation (FICO) by Ryan Reeves in May 2025, which highlighted the company’s dominant credit scoring position, strong pricing power, and high-margin Scores business. The company’s stock price has depreciated approximately by 22.41% since our coverage. The thesis still stands as FICO’s entrenched market position remains strong, while Rebound Capital shares a similar perspective but emphasizes Software segment growth.

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Disclosure: None.