FAF Stock Analysis: First American | NYSE
Insurance - Specialty | NYSE, USA | Market Cap: 7.603m USD | 12M Return: 21.4% | US31847R1023 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 43.8M
EPS Trend: 89.9%
Qual. Beats: 4
Rev. Trend: -14.8%
Qual. Beats: -2
Warnings
No concerns identified
Tailwinds
Seasonality 11.6 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
First American Financial Corporation (NYSE: FAF) is a U.S.-based financial services company headquartered in Santa Ana, California, founded in 1889. It operates through two main segments: Title Insurance and Services, and Home Warranty. The Title Insurance and Services segment is the larger and more diversified of the two, issuing title insurance policies on residential and commercial properties, providing closing and escrow services, appraisals, lien release, document custodial and default-related services, warehouse lending, subservicing of mortgage loans, and banking, trust, and wealth management services. It also facilitates tax-deferred real estate exchanges and maintains title plant data and records. Products are distributed through a network of direct operations and agents across U.S. states and the District of Columbia, with international operations in Canada, the United Kingdom, Australia, New Zealand, and South Korea.
The Home Warranty segment offers residential service contracts that cover systems such as heating and air conditioning, along with certain appliances, against failures resulting from normal usage. This segment operates in various U.S. states and the District of Columbia. Title insurance functions as a one-time premium product typically paid at closing, making revenue closely correlated with real estate transaction volumes and mortgage origination activity rather than recurring insurance premiums. The U.S. title insurance market is highly concentrated, with a small number of large underwriters accounting for the majority of policies issued.
- Existing home sales decline pressures title insurance revenue
- Mortgage origination volume falls on elevated interest rates
- Home warranty segment margins compress on rising claims costs
| Net Income: 745.1m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.05 > 0.02 and ΔFCF/TA 2.88 > 1.0 |
| NWC/Revenue: 72.11% < 20% (prev 32.95%; Δ 39.16% < -1%) |
| CFO/TA 0.05 > 3% & CFO 1.00b > Net Income 745.1m |
| Net Debt (-665.4m) to EBITDA (837.1m): -0.79 < 3 |
| Current Ratio: 55.46 > 1.5 & < 3 |
| Outstanding Shares: last quarter (103.1m) vs 12m ago -0.87% < -2% |
| Gross Margin: 76.81% > 18% (prev 61.17%; Δ 15.64% > 0.5%) |
| Asset Turnover: 23.76% > 50% (prev 39.99%; Δ -16.22% > 0%) |
| Interest Coverage Ratio: 3.61 > 6 (EBIT TTM 618.2m / Interest Expense TTM 171.4m) |
| A: 0.16 (Total Current Assets 3.07b - Total Current Liabilities 55.4m) / Total Assets 18.9b |
| B: 0.22 (Retained Earnings 4.24b / Total Assets 18.9b) |
| C: 0.04 (EBIT TTM 618.2m / Avg Total Assets 17.6b) |
| D: 0.42 (Book Value of Equity 5.60b / Total Liabilities 13.3b) |
| Altman-Z'' = 2.45 = A |
| DSRI: 1.69 (Receivables 447.9m/412.6m, Revenue 4.18b/6.51b) |
| GMI: 0.80 (GM 61.17% / 76.81%) |
| AQI: 1.01 (AQ_t 0.76 / AQ_t-1 0.75) |
| SGI: 0.64 (Revenue 4.18b / 6.51b) |
| TATA: -0.01 (NI 745.1m - CFO 1.00b) / TA 18.9b) |
| Beneish M = -2.90 (Cap -4..+1) = A |
As of September 05, 2026, the stock is trading at USD 76.51 with a total of 643,831 shares traded. Over the past week, the price has changed by +2.63%, over one month by +1.47%, over three months by +19.45% and over the past year by +21.39%.
Current recommended Stop Loss: 74.20 (which is 3% or 1.4 ATR below the current price).
First American has received a consensus analysts rating of 4.25. Therefore, it is recommended to buy FAF.
- StrongBuy: 2
- Buy: 1
- Hold: 1
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 87.7 | 14.6% |
P/E Trailing = 10.3287
P/E Forward = 9.3809
P/S = 0.9523
P/B = 1.3542
P/EG = 2.9767
Revenue TTM = 4.18b USD
EBIT TTM = 618.2m USD
EBITDA TTM = 837.1m USD
Long Term Debt = 1.55b USD (from longTermDebt, last quarter)
Short Term Debt = 1.04b USD (from shortTermDebt, last quarter)
Debt = 1.96b USD (from shortLongTermDebtTotal, last quarter) + Leases 206.2m
Net Debt = -665.4m USD (calculated: Debt 1.96b - CCE 2.62b)
Enterprise Value = 6.94b USD (7.60b + Debt 1.96b - CCE 2.62b)
Interest Coverage Ratio = 3.61 (Ebit TTM 618.2m / Interest Expense TTM 171.4m)
EV/FCF = 8.13x (Enterprise Value 6.94b / FCF TTM 853.9m)
FCF Yield = 12.31% (FCF TTM 853.9m / Enterprise Value 6.94b)
FCF Margin = 20.41% (FCF TTM 853.9m / Revenue TTM 4.18b)
Net Margin = 17.81% (Net Income TTM 745.1m / Revenue TTM 4.18b)
Gross Margin = 76.81% ((Revenue TTM 4.18b - Cost of Revenue TTM 970.3m) / Revenue TTM)
Gross Margin QoQ = none% (prev 45.71%)
Tobins Q-Ratio = 0.37 (Enterprise Value 6.94b / Total Assets 18.9b)
Interest Expense / Debt = 8.75% (Interest Expense 171.4m / Debt 1.96b)
Taxrate = 23.76% (232.9m / 980.1m)
NOPAT = 471.3m (EBIT 618.2m * (1 - 23.76%))
Current Ratio = 3.21 (Total Current Assets 3.07b / Total Current Liabilities 957.5m)
Debt / Equity = 0.35 (Debt 1.96b / totalStockholderEquity, last quarter 5.60b)
Debt / EBITDA = -0.79 (Net Debt -665.4m / EBITDA 837.1m)
Debt / FCF = -0.78 (Net Debt -665.4m / FCF TTM 853.9m)
Total Stockholder Equity = 5.47b (last 4 quarters mean from totalStockholderEquity)
RoA = 4.23% (Net Income 745.1m / Total Assets 18.9b)
RoE = 13.62% (Net Income TTM 745.1m / Total Stockholder Equity 5.47b)
RoCE = 8.81% (EBIT 618.2m / Capital Employed (Equity 5.47b + L.T.Debt 1.55b))
RoIC = 2.39% (NOPAT 471.3m / Invested Capital 19.7b)
WACC = 7.00% (E(7.60b)/V(9.56b) * Re(7.09%) + D(1.96b)/V(9.56b) * Rd(8.75%) * (1-Tc(0.24)))
Discount Rate = 7.09% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -83.77 | Cagr: -0.56%
[DCF] Terminal Value 77.97% ; FCFF base≈618.1m ; Y1≈708.6m ; Y5≈1.04b
[DCF] Fair Price = 160.2 (EV 15.7b - Net Debt -665.4m = Equity 16.4b / Shares 102.1m; r=8.35% [WACC [floored]]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: 89.91 | EPS CAGR: 26.28% | SUE: 1.77 | # QB: 4
Revenue Correlation: -14.77 | Revenue CAGR: -2.26% | SUE: -3.30 | # QB: -2
EPS current Quarter (2026-09-30): EPS=1.89 | Chg30d=+3.63% | Revisions=+38% | Analysts=6
EPS current Year (2026-12-31): EPS=7.14 | Chg30d=+4.74% | Revisions=+62% | GrowthEPS=+18.1% | GrowthRev=+9.7%
EPS next Year (2027-12-31): EPS=7.39 | Chg30d=+2.15% | Revisions=+38% | GrowthEPS=+3.4% | GrowthRev=+4.1%
[Analyst] Revisions Ratio: +61% (up=13, down=2)