FAF Stock Analysis: First American | NYSE
Insurance - Specialty | NYSE, USA | Market Cap: 7.331m USD | 12M Return: 31.4% | Charts, Fundamentals & Technical Analysis
Avg Turnover: 66.4M
EPS Trend: 72.6%
Qual. Beats: 3
Rev. Trend: 39.9%
Qual. Beats: -1
Warnings
No concerns identified
Tailwinds
Seasonality 10.5 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: 672.7m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.05 > 0.02 and ΔFCF/TA 0.94 > 1.0 |
| NWC/Revenue: 47.13% < 20% (prev -79.35%; Δ 126.5% < -1%) |
| CFO/TA 0.06 > 3% & CFO 1.01b > Net Income 672.7m |
| Net Debt (1.30b) to EBITDA (1.27b): 1.02 < 3 |
| Current Ratio: error (cannot be calculated; needs correct Total Current Assets and Liabilities) |
| Outstanding Shares: last quarter (103.3m) vs 12m ago -0.86% < -2% |
| Gross Margin: 74.26% > 18% (prev 61.09%; Δ 13.17% > 0.5%) |
| Asset Turnover: 35.97% > 50% (prev 40.51%; Δ -4.54% > 0%) |
| Interest Coverage Ratio: 6.45 > 6 (EBIT TTM 1.06b / Interest Expense TTM 163.7m) |
| A: 0.16 (Total Current Assets 2.83b - Total Current Liabilities 0.0) / Total Assets 17.9b |
| B: 0.23 (Retained Earnings 4.08b / Total Assets 17.9b) |
| C: 0.06 (EBIT TTM 1.06b / Avg Total Assets 16.7b) |
| D: 0.44 (Book Value of Equity 5.49b / Total Liabilities 12.4b) |
| Altman-Z'' = 2.67 = A |
| DSRI: 1.03 (Receivables 398.0m/403.6m, Revenue 6.01b/6.28b) |
| GMI: 0.82 (GM 61.09% / 74.26%) |
| AQI: 0.97 (AQ_t 0.76 / AQ_t-1 0.78) |
| SGI: 0.96 (Revenue 6.01b / 6.28b) |
| TATA: -0.02 (NI 672.7m - CFO 1.01b) / TA 17.9b) |
| Beneish M = -3.21 (Cap -4..+1) = AA |
As of July 21, 2026, the stock is trading at USD 71.73 with a total of 811,041 shares traded. Over the past week, the price has changed by +2.38%, over one month by +5.05%, over three months by +9.00% and over the past year by +31.42%.
Current recommended Stop Loss: 69.20 (which is 3.5% 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 | 85.8 | 19.6% |
P/E Trailing = 11.0685
P/E Forward = 9.3809
P/S = 0.9222
P/B = 1.3005
P/EG = 2.9767
Revenue TTM = 6.01b USD
EBIT TTM = 1.06b USD
EBITDA TTM = 1.27b USD
Long Term Debt = 2.45b USD (from longTermDebt, last fiscal year)
Short Term Debt = 1.08b USD (from shortTermDebt, last quarter)
Debt = 3.73b USD (corrected: LT Debt 2.45b + ST Debt 1.08b) + Leases 206.7m
Net Debt = 1.30b USD (calculated: Debt 3.73b - CCE 2.44b)
Enterprise Value = 8.63b USD (7.33b + Debt 3.73b - CCE 2.44b)
Interest Coverage Ratio = 6.45 (Ebit TTM 1.06b / Interest Expense TTM 163.7m)
EV/FCF = 10.47x (Enterprise Value 8.63b / FCF TTM 824.3m)
FCF Yield = 9.55% (FCF TTM 824.3m / Enterprise Value 8.63b)
FCF Margin = 13.71% (FCF TTM 824.3m / Revenue TTM 6.01b)
Net Margin = 11.19% (Net Income TTM 672.7m / Revenue TTM 6.01b)
Gross Margin = 74.26% ((Revenue TTM 6.01b - Cost of Revenue TTM 1.55b) / Revenue TTM)
Gross Margin QoQ = 45.71% (prev none%)
Tobins Q-Ratio = 0.48 (Enterprise Value 8.63b / Total Assets 17.9b)
Interest Expense / Debt = 4.38% (Interest Expense 163.7m / Debt 3.73b)
Taxrate = 24.25% (216.2m / 891.4m)
NOPAT = 799.2m (EBIT 1.06b * (1 - 24.25%))
Current Ratio = unknown (Total Current Assets 2.83b / Total Current Liabilities 0.0)
Debt / Equity = 0.68 (Debt 3.73b / totalStockholderEquity, last quarter 5.49b)
Debt / EBITDA = 1.02 (Net Debt 1.30b / EBITDA 1.27b)
Debt / FCF = 1.57 (Net Debt 1.30b / FCF TTM 824.3m)
Total Stockholder Equity = 5.35b (last 4 quarters mean from totalStockholderEquity)
RoA = 4.02% (Net Income 672.7m / Total Assets 17.9b)
RoE = 12.56% (Net Income TTM 672.7m / Total Stockholder Equity 5.35b)
RoCE = 13.52% (EBIT 1.06b / Capital Employed (Equity 5.35b + L.T.Debt 2.45b))
RoIC = 6.81% (EBIT 1.06b / (Assets 17.9b - Curr.Liab 0.0 - Cash 2.44b))
WACC = 6.22% (E(7.33b)/V(11.1b) * Re(7.69%) + D(3.73b)/V(11.1b) * Rd(4.38%) * (1-Tc(0.24)))
Discount Rate = 7.69% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -80.78 | Cagr: -0.47%
[DCF] Terminal Value 77.97% ; FCFF base≈721.4m ; Y1≈827.0m ; Y5≈1.22b
[DCF] Fair Price = 167.0 (EV 18.3b - Net Debt 1.30b = Equity 17.0b / Shares 101.9m; r=8.35% [WACC [floored]]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: 72.61 | EPS CAGR: 17.26% | SUE: 1.33 | # QB: 3
Revenue Correlation: 39.95 | Revenue CAGR: 3.37% | SUE: -4.0 | # QB: -1
EPS current Quarter (2026-06-30): EPS=1.83 | Chg30d=-0.75% | Revisions=+0% | Analysts=5
EPS next Quarter (2026-09-30): EPS=1.82 | Chg30d=-1.53% | Revisions=+0% | Analysts=5
EPS current Year (2026-12-31): EPS=6.82 | Chg30d=-0.76% | Revisions=-40% | GrowthEPS=+12.7% | GrowthRev=+6.6%
EPS next Year (2027-12-31): EPS=7.23 | Chg30d=-0.41% | Revisions=-40% | GrowthEPS=+6.1% | GrowthRev=+5.0%
[Analyst] Revisions Ratio: -36% (up=2, down=6)