Needham analyst Kyle Peterson has maintained their neutral stance on FA stock, giving a Hold rating on May 28.
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Kyle Peterson’s rating is based on a combination of factors that suggest a cautious approach to First Advantage’s stock. The company has shown promising developments, particularly with the integration of the Sterling acquisition and expansion into digital identity solutions. These efforts, along with reasonable financial targets for 2028, indicate potential for organic revenue growth and margin improvement.
However, despite these positive aspects, Peterson highlights concerns that could limit the stock’s performance in the near term. The challenging labor market and the company’s elevated net leverage, calculated at 4.8 times net debt to EBITDA excluding unrealized synergies, are significant factors that could keep the stock from appreciating significantly over the next year. As a result, Peterson has opted for a Hold rating, suggesting that while the company has long-term potential, short-term gains may be limited.
According to TipRanks, Peterson is a 3-star analyst with an average return of 2.7% and a 47.54% success rate. Peterson covers the Technology sector, focusing on stocks such as Fair Isaac, Alight, and Broadridge Financial Solutions.
In another report released on May 28, Barclays also maintained a Hold rating on the stock with a $18.00 price target.