Fair Isaac just released its Q4 2026 results and the headline is clear. This was a profit machine reporting quarterly net income of US$175 million on US$657 million of revenue and full year earnings per share of US$36.52. Yet after a bruising 90 day slide of about 32%, the stock only clawed back 0.9% today to around US$707.
That muted rebound highlights a sentiment mismatch. Traders reacted as if this was a routine report, while the earnings power and 32.9% net margin indicate a much stronger story about the franchise behind the ticker.
Love Fair Isaac’s rich earnings power but uneasy about paying up after a 32% slide and muted bounce? Screen for peers that combine strong profitability with sturdier recent price action in our 42 high quality undervalued stocks.
Q4 2026 Earnings Summary
- Revenue (Q4 2026 vs Q4 2025): US$657.0 million vs. US$515.8 million (up about 27%)
- Net Income (Q4 2026 vs Q4 2025): US$175.0 million vs. US$155.0 million (up about 12%)
- Basic EPS (Q4 2026 vs Q4 2025): US$8.16 vs. US$6.48 (up about 26%)
- Net Profit Margin (FY 2026 vs FY 2025): 32.9% vs. 32.7% (slight margin expansion year over year)
Earnings tell you what Fair Isaac reported for the quarter, while cash flows tell you what the business actually generates over time. That is what valuation-focused investors tend to study first.
On Fair Isaac's cash generation alone, the stock could be a striking 46% undervalued.
Evaluating Fair Isaac’s Execution Led Bull Case
Bulls argue Fair Isaac can keep compounding earnings power if next generation scores and the platform land well with lenders.
"The main requirement for this view is that Fair Isaac maintains its strong position in U.S. mortgage and broader consumer credit scoring even as regulators promote alternative models and competitors."
Q4 data partly supports that. Scores revenue grew faster than the group, with mortgage originations still about 67% of B2B Scores and 58% of total Scores despite VantageScore parity. FHA approval for FICO Score 10T and expanding Preferred Program participation show real milestones, even as management’s refusal to give FY27 guidance signals that this mortgage advantage is not yet secured.
The price and this Narrative do not agree. → Uncover what this Narrative says Fair Isaac is actually worth.
Fair Isaac Bear Case: Mortgage Edge Still Eroding
For Fair Isaac bears, the central worry is that mortgage score pricing has lost its punch even if volumes hold up for now.
"They see higher risk to mortgage score volumes and pricing, which they argue reduces upside to previous valuation frameworks."
The latest quarter cuts both ways. Mortgage origination Scores revenue rose sharply and still makes roughly two thirds of B2B Scores, yet that reliance confirms concentration instead of easing it. Holding the Preferred Program at US$10, shifting to bespoke deals, moving toward a 2027 subscription model, and pulling FY27 guidance all point to unresolved pricing power and visibility concerns, not milestones cleared.
Hunt For Mispriced Earnings Power
Fair Isaac recently illustrated how earnings strength and share performance can move in different directions. The real opportunity may lie in stocks where earnings power and price appear misaligned before wider expectations shift.
- Company 1 - 16% below our estimate - sell higher value silicon carbide and GaN power platforms into electric vehicles, industrial automation and AI data centers as older components are phased out.
- Company 2 - 28% below our estimate - scale a fully digital banking model as rising customer numbers, higher revenue per user and improving efficiency reshape earnings in core and new markets.
- Company 3 - 32% below our estimate - extend a leading coconut beverage platform as retailers add private label contracts and overseas distributors adopt the same supply chain.
Three companies from the same screener. Open all 42 potentially undervalued companies →
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com