(FAF) First American - Overview
Sector: Financial Services | Industry: Insurance - Specialty | Exchange: NYSE (USA) | Market Cap: 6.950m USD | Total Return: 26.5% in 12m
Avg Turnover: 54.0M
EPS Trend: 72.6%
Qual. Beats: 7
Rev. Trend: 39.9%
Qual. Beats: -1
Warnings
Choppy Below Avwap Earnings
Tailwinds
Confidence
First American Financial Corporation (NYSE: FAF) is a financial services provider specializing in title insurance and home warranty products. The Title Insurance and Services segment facilitates real estate transactions by issuing policies, providing escrow services, and managing valuation and mortgage-related data across domestic and international markets. The Home Warranty segment offers service contracts covering major residential systems and appliances.
Title insurance differs from traditional insurance because it focuses on risk prevention through historical record searches rather than risk actuary for future events. The industry is highly cyclical, with revenue closely tied to residential mortgage origination volumes and broader real estate market activity. Investors can examine ValueRay to evaluate how current interest rate trends may impact these business segments. Founded in 1889, First American maintains an extensive network of direct operations and third-party agents to distribute its risk mitigation products globally.
- Mortgage rate fluctuations dictate residential title insurance volume and premium revenue
- Commercial real estate transaction activity impacts high-margin institutional service fees
- Investment income yields from escrow accounts track Federal Reserve interest rate policy
- Cybersecurity threats and data breaches pose significant operational and reputational risk
- Home warranty renewal rates and claims costs influence non-title segment profitability
| 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 0.61%; Δ 7.36k% > 0.5%) |
| Asset Turnover: 35.97% > 50% (prev 40.51%; Δ -4.54% > 0%) |
| Interest Coverage Ratio: 6.45 > 6 (EBITDA TTM 1.27b / 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: 0.30 (Book Value of Equity 3.76b / Total Liabilities 12.4b) |
| Altman-Z'' = 2.52 = A |
| DSRI: 1.03 (Receivables 398.0m/403.6m, Revenue 6.01b/6.28b) |
| GMI: 0.82 (GM 74.26% / 61.09%) |
| 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 = -3.23 (Cap -4..+1) = AA |
As of May 28, 2026, the stock is trading at USD 67.53 with a total of 638,085 shares traded.
Over the past week, the price has changed by +0.15%,
over one month by -2.72%,
over three months by -2.89% and
over the past year by +26.51%.
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 | 86.2 | 27.6% |
P/E Trailing = 10.4923
P/E Forward = 9.3809
P/S = 0.9016
P/B = 1.266
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 = 8.25b USD (6.95b + Debt 3.73b - CCE 2.44b)
Interest Coverage Ratio = 6.45 (Ebit TTM 1.06b / Interest Expense TTM 163.7m)
EV/FCF = 10.00x (Enterprise Value 8.25b / FCF TTM 824.3m)
FCF Yield = 10.00% (FCF TTM 824.3m / Enterprise Value 8.25b)
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 = 0.46 (Enterprise Value 8.25b / Total Assets 17.9b)
Interest Expense / Debt = 4.38% (Interest Expense 163.7m / Debt 3.73b)
Taxrate = 22.87% (37.0m / 161.8m)
NOPAT = 813.8m (EBIT 1.06b * (1 - 22.87%))
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 = 6.25% (E(6.95b)/V(10.7b) * Re(7.79%) + D(3.73b)/V(10.7b) * Rd(4.38%) * (1-Tc(0.23)))
Discount Rate = 7.79% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -75.02 | 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: 0.85 | # QB: 7
Revenue Correlation: 39.95 | Revenue CAGR: 3.37% | SUE: -4.0 | # QB: -1
EPS current Quarter (2026-06-30): EPS=1.84 | Chg30d=+2.27% | Revisions=+50% | Analysts=5
EPS next Quarter (2026-09-30): EPS=1.85 | Chg30d=+2.17% | Revisions=+0% | Analysts=5
EPS current Year (2026-12-31): EPS=6.87 | Chg30d=+5.74% | Revisions=+56% | GrowthEPS=+13.6% | GrowthRev=+7.5%
EPS next Year (2027-12-31): EPS=7.27 | Chg30d=+3.00% | Revisions=+56% | GrowthEPS=+5.7% | GrowthRev=+5.2%
[Analyst] Revisions Ratio: +56%