Mizuho has spotlighted two U.S. business-services companies it believes are well-positioned for long-term expansion: Fair Isaac Corporation (FICO) and Equifax (EFX). The firm’s analysis emphasizes businesses with differentiated roles inside the credit ecosystem, capital-light models, and the potential to generate significant free cash flow as refinancing activity and regulation-driven demand evolve.
Framework of Mizuho’s selection
The firm focused on companies that combine robust free cash flow generation with entrenched market positions within credit-related services. Both companies highlighted by Mizuho carry exposure to mortgage refinancing dynamics and areas of growth that are influenced by regulatory requirements.
1. Fair Isaac Corporation (FICO)
Mizuho views FICO as structurally advantaged despite declines in its share price year-to-date. The analyst argues the market has overstated competitive threats from VantageScore within the mortgage market. According to Mizuho, FICO’s leadership is rooted in standardization, deep integration in lender systems and investor risk assessments, and a long record of predictable outcomes rather than reliance solely on regulatory mandates.
The firm expects FICO to meaningfully benefit from a rebound in refinancing activity should interest rates decline. Mizuho also highlights the Mortgage Direct License Program as a factor that strengthens FICO’s competitive position by allowing the company to more fully capture score economics.
On the financial side, Mizuho points to strong revenue growth potential, considerable operating leverage and a capital-light business model, factors that the firm says should support robust free cash flow generation and material share repurchases. Mizuho’s projections show compound annual growth rates from fiscal year 2025 through fiscal year 2028 of approximately 19% for revenue, 29% for adjusted earnings per share and 26% for free cash flow. For comparison, Mizuho notes consensus estimates of roughly 18% revenue growth, 28% adjusted EPS growth and 22% free cash flow growth over the same period.
Mizuho’s positive stance is set against an ongoing regulatory backdrop: FICO is the subject of a Senate investigation concerning its pricing practices for mortgage credit scores. Citing those pricing concerns and the possibility of regulatory action, JPMorgan reduced its price target for the company’s stock while keeping a Neutral rating.
2. Equifax (EFX)
Mizuho underscores Equifax’s Workforce Solutions business as a key driver of the company’s future growth. The firm notes that Workforce Solutions accounts for approximately 43% of Equifax’s revenue and that the segment expands Equifax’s footprint within the credit ecosystem.
Within Workforce Solutions, Mizuho differentiates between cyclical and structurally driven components. Mortgage-related income and employment verification provide upside if refinancing activity picks up when rates fall. Meanwhile, government verification is characterized as less cyclical and tied to regulation-driven demand - specifically, verification related to SNAP and Medicaid under the One Big Beautiful Bill Act.
On growth assumptions, Mizuho expects the government verification business to grow at about a 19% compound annual rate from 2025 through 2028, supporting an overall Workforce Solutions CAGR of roughly 11% over the same timeframe. The firm compares this to consensus estimates of approximately 10% for Workforce Solutions.
Equifax recently reported first-quarter earnings and revenue that exceeded analyst expectations. Following those results, Morgan Stanley modestly lowered its price target for the stock while maintaining an Overweight rating.
Conclusion
Mizuho’s selections emphasize companies with entrenched roles inside credit markets, exposure to mortgage refinancing upside and access to regulation-driven revenue streams. The bank’s forecasts show faster growth in several key metrics than consensus for each company between fiscal years 2025 and 2028, while regulatory scrutiny and price-target adjustments by other brokerages remain active considerations.