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Analysts’ recent target cuts reflect concern that expanded access to competing mortgage credit scores could weaken Fair Isaac’s pricing power or share over time. They do not show that lenders have already shifted at scale or that FICO’s reported results have deteriorated: fiscal Q3 2026 revenue and Scores revenue both grew, and the company raised its full-year guidance.
Why have analysts cut Fair Isaac’s targets?
Investing.com reported on September 30, 2026, that Bank of America Securities downgraded Fair Isaac (FICO) from Buy to Neutral and lowered its price target from $1,400 to $700, citing FHFA policy changes affecting VantageScore and classic FICO. A separate target tracker, PriceTargets.com, listed further reductions from September 30 to October 2. Those figures are reported analyst opinions, not Fair Isaac guidance or forecasts of where the stock will trade.
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| Brokerage | Previous target | New target | Reported date and source |
|---|---|---|---|
| Bank of America Securities | $1,400 | $700 | September 30, 2026; Investing.com |
| Wells Fargo | $1,350 | $950 | September 30, 2026; PriceTargets.com |
| Barclays | $1,000 | $875 | October 2, 2026; PriceTargets.com |
| Robert W. Baird | $1,549 | $1,070 | October 2, 2026; PriceTargets.com |
The BofA change was reported alongside its rating downgrade. PriceTargets.com is a secondary tracker; its listed cuts are not independently verified here against the firms’ underlying research notes. A target cut signals a change in an analyst’s valuation view, not a guaranteed share-price move or a company result.
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Fannie Mae allows more than one score model
Fannie Mae’s Q1 2026 filing says its April 2026 Selling Guide update allowed VantageScore 4.0 and FICO Score 10T alongside the classic FICO score. Fannie Mae described VantageScore 4.0 access at the time as limited to a number of approved lenders, with broader availability dependent on operational readiness. The update expands the models that can be used; it does not, by itself, establish that lenders have replaced FICO broadly.
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FICO Score 10T is scheduled for FHA underwriting
Fair Isaac’s investor portal listed a September 11, 2026 announcement that FICO Score 10T would be available for FHA mortgage underwriting beginning January 1, 2027. That is a scheduled availability date, not evidence that lenders have adopted the model or that FHA loans have already migrated to it.
How could this affect Fair Isaac’s business?
Mortgage scores matter because lenders and mortgage-market institutions use credit scores in assessing borrower risk, while Fannie Mae says scores also underpin risk-based pricing and investor disclosures. Fair Isaac’s fiscal 2024 Form 10-K says a significant portion of Scores revenue is attributable to the U.S. mortgage market and warns: “If use of the FICO Score by Fannie Mae and Freddie Mac were to cease or decline, it could have a material adverse effect on our revenues, results of operations and stock price.”
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The risk is not limited to one score-model decision. Fair Isaac’s filing also identifies a possible bi-merge rather than tri-merge requirement as a way score demand could decline. If mortgage transactions require fewer bureau-score pulls, or lenders use competing models more often, the number of FICO scores purchased and the price per score could come under pressure. These are scenarios the company identifies as risks, not reported losses that have already occurred.
Fair Isaac reported that 92% of its fiscal 2024 revenue came from sales of products and services to the banking industry. That figure describes broad banking exposure; it is not the share of revenue from mortgage scoring. The available figures do not quantify how much of future mortgage volume will use alternative models or the resulting dollar impact on Fair Isaac.
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What do Fair Isaac’s latest results show?
In its July 29, 2026 earnings release, Fair Isaac reported growth in fiscal Q3 2026 and raised its FY2026 guidance. The quarter’s results and the longer-term mortgage-policy risk are different pieces of evidence: recent growth does not resolve the question of how model adoption may change over time.
| Measure | Fiscal Q3 2026 result or FY2026 outlook |
|---|---|
| Total revenue | $674.2 million, up 26% year over year |
| Scores revenue | $458.9 million, up 41% year over year |
| B2B scoring revenue | Up 49% year over year; Fair Isaac primarily attributed the increase to higher mortgage-origination score unit pricing |
| FY2026 revenue guidance | Raised to $2.53 billion |
| FY2026 non-GAAP EPS guidance | Raised to $42.43 |
The B2B scoring figure is especially relevant to the debate: Fair Isaac attributed the quarter’s increase primarily to higher mortgage-origination score unit pricing. That recent pricing strength does not establish that prices or volumes will remain unchanged if alternatives become more usable. CEO Will Lansing said in the earnings release that the company had delivered another quarter of strong performance and was raising full-year guidance.
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What should investors watch next?
- Actual adoption: Whether approved lenders begin using VantageScore 4.0 more broadly, and how operational readiness affects that rollout.
- Model mix and pricing: Whether mortgage lenders continue to buy classic FICO scores, adopt FICO Score 10T, or use competing models—and how any change affects score units and prices.
- Loan and bureau requirements: Whether policy or lender processes change the number of scores required per mortgage transaction, including the bi-merge issue Fair Isaac flags.
- Reported performance: Whether future Scores results and company commentary show changes in mortgage-related demand or unit pricing. The disclosed Q3 growth and raised FY2026 outlook are current reported results, not a quantified estimate of the eventual effect of policy changes.
The central uncertainty is therefore the pace and economics of adoption. Official filings establish that more models are becoming available and that Fair Isaac has material mortgage exposure; the reported target cuts show how some analysts are valuing that risk. Neither establishes how much future mortgage-score volume or revenue will shift.
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