Needham analyst Kyle Peterson has maintained their neutral stance on FA stock, giving a Hold rating on August 9.
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Kyle Peterson has given his Hold rating due to a combination of factors influencing First Advantage’s current market position. The company reported strong second-quarter results, exceeding expectations in both revenue and earnings, driven by successful new client acquisitions and effective up-sell and cross-sell strategies. Despite these positive outcomes, the broader economic environment poses challenges to organic growth, which could hinder the company’s ability to accelerate its top-line performance.
Moreover, while First Advantage has maintained its fiscal year 2025 outlook and is actively working to reduce its interest expenses through debt repricing and principal repayments, the current leverage ratio remains a concern. The net debt to unsynergized EBITDA ratio of 4.7x is considered high, which may limit the potential for the stock to be re-rated higher in the near term. These factors collectively contribute to the decision to maintain a Hold rating on the stock.
In another report released on August 9, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $17.00 price target.