FICO Stock: Will It Rebound to $2,400? Behind the 60% Slide

Let me start with the question that frames the whole video: if FICO has fallen about 60 percent from its 2,400 dollar peak while profits are still growing near 40 percent, is that a value opportunity or a value trap? Watching Sven Carlin walk through it, I kept feeling that tension on every slide — the chart collapsing while the income statement celebrates — and I struggled to believe both belong to the same company.

The latest operating numbers genuinely look spectacular. Depending on the quarter you annualise, revenue is up 26 to 39 percent, scores revenue up around 41 percent, the platform component of software up 66 percent, net income up roughly 40 percent, and earnings per share compounding far faster than sales. Free cash flow is running toward a billion dollars a year, and management has been using pullbacks to retire shares aggressively.

The engine behind those numbers is pricing power of a kind I rarely see outside regulated monopolies. The wholesale mortgage score went from about 60 cents to 10 dollars per score in five years, the company raised prices roughly eighteen-fold since 2020, and the 2026 list effectively doubles the cost again from around 4 dollars toward 10 dollars and beyond. In October 2025 FICO added a performance model on top: a 4.95 dollar royalty per score plus a 33 dollar fee per borrower on every funded loan.

Then came the trigger for the latest leg down. In April 2026 Freddie Mac began accepting VantageScore as an alternative for mortgage underwriting and Fannie Mae followed, while the housing regulator's leadership openly attacked FICO's scoring monopoly. The stock lost 16 to 17 percent in a single session — the kind of move that tells me the market had priced zero probability of genuine competition.

Why did lenders tolerate the hikes for so long? My answer is institutional inertia dressed up as prudence. For decades only classic FICO qualified loans for sale to the housing agencies, so entire underwriting stacks, risk models, and investor guidelines were hard-wired around it. Switching a score provider is not changing a font — it means revalidating models, retraining staff, and explaining yourself to regulators, so most lenders grumbled and paid.

Management's response to the selloff is the part of the video that stayed with me longest. Instead of deleveraging, FICO borrowed to fund buybacks, arguing the stock was obviously cheap — a bold signal of conviction that becomes a trap if the thesis is wrong, because the debt stays even if the stock keeps falling. The balance sheet is now visibly loaded with liabilities directed at repurchases, and executives sound proud of it rather than cautious.

Valuation is where the video does its most useful arithmetic. At the peak, buyers paid a multiple above 100 times earnings, which demands near-perfect execution; today the trailing multiple sits near 27, cheap against FICO's own history but not against its darker episodes. Analysts still model roughly 43 percent growth followed by around 20 percent, which would compress the forward multiple toward 20 and then 14 by September 2028 — the reason most of Wall Street still says buy, with targets clustered between 1,500 and 2,000 and a single bear near 700.

Here is the leak the bull case understates: raising prices 50 percent while scores revenue grows 30 percent implies the missing 20 points went somewhere — lost share, fewer mortgage originations, or both. VantageScore sells for under a dollar against FICO's ten, and with artificial intelligence accelerating data collection and modelling, I find it entirely plausible that a slow displacement has already begun beneath the headline growth.

Above the commercial fight sits a political one I would not discount. Senator Josh Hawley's 2026 probe cites an 88 percent operating margin and a hundredfold annual compounding of per-score pricing, alleges up to 500 million dollars a year in extra industry costs, and asks the competition regulator to investigate monopoly pricing. Even if nothing is proven, the historical pattern is that businesses dragged into hearings discount their multiples for years.

So where does that leave the 2,400 dollar question? Carlin's verdict, which I share, is that the stock is relatively cheap yet structurally riskier — a bet that multiples hold while earnings grow, with no margin of safety if pricing power cracks. At 60 dollars of earnings per share the multiple would be a calm 15, he notes, but buyers at 2,400 would still need something like forty years of those earnings to get their money back. That sentence alone keeps me disciplined.