Needham analyst Kyle Peterson has maintained their neutral stance on FA stock, giving a Hold rating on August 19.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Kyle Peterson has given his Hold rating due to a combination of factors influencing First Advantage’s current market position. The company has shown promise in its strategy to boost organic growth and leverage synergies from its acquisition of Sterling. However, despite these positive steps, the overall organic growth is expected to remain modest until there is an uptick in hiring volumes.
Another critical factor in the Hold rating is the company’s financial leverage. While First Advantage is focusing on cash generation to reduce its debt levels, the current leverage ratio remains high at 4.7x net debt to unsynergized EBITDA. This high leverage is seen as a potential risk, overshadowing the company’s efforts to reach a more manageable target leverage ratio of 2-3x. These elements combined lead to the decision to maintain a Hold rating.
In another report released on August 19, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $16.50 price target.