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This Perfect Stock Is Down 50%

Joseph Carlson After Hours•Mar 25, 2026

Summary

Joseph provides a critical analysis of Fair Isaac Corporation (FICO), which has seen its stock price plummet from $2,400 to $1,000. While acknowledging investor Dev Kantesaria's thesis that FICO is a 'perfect business' due to its 88% operating margins, capital efficiency, and lack of dilution, Joseph disagrees with the long-term outlook. He argues that FICO's management has displayed hubris by raising prices tenfold over five years without adding product value, which has triggered a political backlash and invited competition from VantageScore. Joseph emphasizes that FICO's former 'government-mandated monopoly' is now under threat as regulators move to allow competitors into the mortgage credit scoring market.

In addition to the FICO analysis, Joseph highlights Meta's ambitious new incentive program aiming for a $9 trillion market cap. He also contrasts FICO's aggressive management with more stable alternatives in the financial services sector.

FICO: Joseph notes that the stock is down over 50% from its highs, yet he refuses to 'buy the dip.' He explains that the aggressive price hikes have turned distributors into competitors and made the company a target for politicians like Senator Josh Hawley. Joseph believes the damage to FICO's reputation and the emergence of VantageScore as a viable alternative represent a permanent shift in the company's moat.
META: Joseph discusses Meta's plan to reach a $9 trillion valuation by 2031 through executive incentives. While he is skeptical of the specific $9 trillion target, he considers the stock an 'easy double' over the next five years. He confirms that Meta remains one of his largest personal holdings due to its strong growth trajectory.
MCO & SPGI: Joseph mentions Moody's and S&P Global as his preferred investments over FICO. He argues that these companies implement price increases more thoughtfully and maintain much better relationships with regulators and customers. He suggests these stocks provide a similar 'quality growth' profile without the extreme political risk associated with FICO.

Mentioned Stocks

META
Sentiment: BUYAction: RECOMMENDED

Reasoning: Joseph is very optimistic about Meta, calling it an 'easy double' over the next five years. While he finds the company's internal $9 trillion market cap target to be a long shot, he remains excited about the business and notes it is one of his largest personal positions.

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FICO
Sentiment: SELL

Reasoning: Joseph is avoiding the stock despite its 50% price drop from $2,400 to $1,000. He believes management has been too aggressive with 10x price increases, leading to a loss of their government-mandated monopoly status, increased political scrutiny from Senator Josh Hawley, and a direct competitive threat from VantageScore. He views their pricing strategy as short-term rent-seeking that damages long-term brand value.

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MCO
Sentiment: BUYAction: RECOMMENDED

Reasoning: Joseph recommends Moody's as a better alternative to FICO because they are more reasonable and thoughtful with price increases. He believes they value their franchise more and do not invite the same level of government scrutiny.

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SPGI
Sentiment: BUYAction: RECOMMENDED

Reasoning: Similar to Moody's, Joseph highlights S&P Global as a high-quality alternative that manages its business practices more responsibly than FICO. He feels more comfortable holding these stocks due to their superior long-term perspective and better reputation with regulators.

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