Fair Isaac stock jumps after FHFA approves license program

Fair Isaac Corporation stock rose 7.7% in morning trading on Thursday following regulatory approval of its Direct License Program by Federal Housing Finance Agency Director Bill Pulte.

The approval, announced on Tuesday via social media, allows the company to sell its credit scores directly to mortgage lenders and resellers without going through traditional credit bureau channels. The decision resolved regulatory uncertainty that had affected the stock price.

BMO Capital maintained its Outperform rating and $1,150 price target, stating that the Direct License Program is management's preferred distribution channel. The firm said the approval removes uncertainty related to the FHFA's relationship with the program.

Jefferies kept its Buy rating with a $1,675 price target, while Mizuho held its Outperform rating with a $1,344 target.

The approval comes two days after BofA Securities downgraded Fair Isaac to Neutral and cut its price target to $700 from $1,400, citing concerns about VantageScore 4.0's expanded role in the mortgage market.

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