May. 6 at 6:01 PM
$FICO is one of the most interesting “expensive for a reason” stocks in the market.
The stock has been crushed, now sitting around 55% below its peak, but the business itself is still putting up strong numbers.
Last quarter, FICO reported
$691.7M in revenue, up 39% YoY, with EPS of
$11.14.
The Scores business is still the monster.
Scores revenue grew 60% YoY, driven by strong pricing power and demand across the credit ecosystem.
That is why
$FICO has been such a high-quality compounder for so long.
The company sits in a critical part of the lending system, and its product is deeply embedded across banks, mortgage lenders, auto lenders, credit cards, and consumer finance.
The risk is real though.
The market is worried about competition from VantageScore, regulatory pressure, and whether FICO’s pricing power can remain as strong as it has been.
That is why the stock has seen such a brutal drawdown.
But this is exactly why I am watching it.
