Fair Isaac Earnings: Mortgage Score Pricing in Line With Our Expectations, Nonmortgage Scores Soft

Fair Isaac reported an OK second fiscal quarter. Scores revenue grew 19% driven almost entirely by an 85% increase in mortgage score revenue. Nonmortgage business-to-business and consumer scores revenue were soft. The firm’s software business slowed down a bit, but growth was still healthy. With two quarters left to its fiscal year, Fair Isaac increased its guidance, which was not a surprise to us as the firm’s outlook has historically proven quite conservative. Overall, we will maintain our wide moat rating and $1,010 fair value estimate on Fair Isaac’s shares.