FICO
Fair Isaac
Recurring SaaS
★ Quality 81/100Price today
$1,229
what the market pays
Worth
$701.70
calculated cycle value
Price is 75% above its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
$820.65
per share
How it's calculated
Fair Isaac — high assist path (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 43x times this business's cash flow; its sector median is 20.3x.
39% above what Charlie thinks it's worth (26.2x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $31.35/share × 26.2x multiplier minus $118.95 in negative net cash = $701.70 in intrinsic value. Today's price of $1,228.97 is 43% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 75% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $666.62.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$561.36
-20% off Value
🟡 Discounted
≤$666.62
-5% off Value
🔴 Today
$1,228.97
-43% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
FICO is the stamp of approval every American bank needs to press onto its paperwork.
Fair Isaac sells the FICO score, the credit standard that lenders and the three credit bureaus in the US use to decide who gets a loan. It charges for every score pulled —mortgage origination, cards, autos— and licenses its decision software platform by subscription. Of the $2.0B in revenue, Scores is the highest-margin segment.
The FICO score is embedded in regulation, government-backed mortgage contracts, and the habits of the entire credit industry. Switching standards would require millions of players to rebuild their models all at once —nobody wants to go first. With 82% gross margin and the power to raise prices per pull, the business is essentially a toll on American credit.
Revenue history
From $1.3B to $2.0B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $2.0B · FY2025
Of every $100 in sales, $67 goes to costs and operations; $33 is left as net profit (33% margin).
Catalysts and risks
Per-score price hikes in mortgage origination: each bump of a few dollars falls almost entirely to FCF given the zero marginal cost.
Recovery in mortgage origination volume when rates drop —the segment most sensitive to the cycle.
Expansion of subscription decision software, which diversifies beyond the score toll.
$3.1B in debt against $0.1B in cash: a leveraged structure that stings if rates stay high.
Regulatory/political risk —the FHFA is already pushing alternative models (VantageScore) in government-backed mortgages.
Demanding valuation: 26x FCF prices in perfect growth, leaving little room for error.
Charlie's note
“A toll on every loan in America —that's the kind of business you want to own as long as nobody has an incentive to touch the standard. The price pays for the quality; here the only serious enemy wears a suit and works in Washington.”
Analysis · June 2026
So when would be a good price for Fair Isaac?
By our calculation, not yet. We will email you the day it drops to $666.62 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.