First Advantage (FA) AI Stock Analysis

• Market Cap: $2.05B
• Dividend Yield: N/A
• Average Volume (3M): 1.20M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.11
• Revenue Growth: 93.41%
• EPS Growth: -2515.85%
• Country: US
• Employees: 10,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.30
• Shares Outstanding: 174,319,120
• 10 Day Avg. Volume: 1,654,653
• 30 Day Avg. Volume: 1,195,438
• PEG Ratio: 0.99
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 1.60
• P/FCF Ratio: 17.86
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 1.16
• Enterprise Value/Gross Profit: 2.88
• Enterprise Value/Ebitda: 4.68
• 1Y Price Target: $15.20
• Price Target Upside: 28.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 1.2
• Revenue Forecast (FY): $1.67B

• Rating: 63 Neutral
• Price Target: $12.50 ▲(5.66% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by improving fundamentals (stronger balance sheet and much better 2025 cash flow) and a constructive earnings outlook with continued growth and margin expansion guidance. Offsetting these positives, the stock’s technical setup remains weak (below key moving averages with negative MACD) and valuation is constrained by negative earnings and no stated dividend yield.

Positive Factors

Capital Structure Improvement

A sharp reduction in debt-to-equity meaningfully de-risks the balance sheet, increasing optionality for buybacks, targeted reinvestment and opportunistic M&A. Improved capital flexibility supports multi-quarter execution of growth and deleveraging priorities without destabilizing liquidity.

Cash Flow Recovery

Material free cash flow turnaround provides durable funding for operations, debt repayment and buybacks while insulating the business from earnings volatility. Positive FCF despite negative net income indicates strong cash conversion from core operations and resilience across economic cycles.

Scale, Data Assets & Retention

Extensive screening scale and large proprietary datasets create high switching costs and better product accuracy, aiding cross-sell and upsell. High retention and multi-year customer relationships support recurring revenue and make go-to-market investments more effective over many quarters.

Negative Factors

Negative Base Revenue

A shrinking base implies reliance on new sales, upsells and cross-sells for overall growth, reducing revenue predictability. If new wins slow, total growth could falter; sustained negative base growth pressures long-term margin and return improvements despite strong go-to-market activity.

Inconsistent Net Profitability

Volatile net income, despite healthy EBITDA, signals recurring non-operating or structural items (amortization, financing, integration costs) that compress reported returns. Persistent earnings variability undermines long-term ROE improvement and complicates capital allocation and shareholder return planning.

Margin Pressure from Third‑party Pass‑Throughs

A product mix shift toward engagements with higher third‑party outlays structurally limits margin expansion unless offset by price increases or synergies. Dependence on external data/lab suppliers also reduces gross margin control and may cap sustainable operating margin gains.

First Advantage Business Overview & Revenue Model

Company Description

First Advantage Corporation provides technology solutions for screening, verifications, safety, and compliance related to human capital worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2003 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

First Advantage generates revenue primarily through its background screening services, which are offered on a subscription and pay-per-use basis. The company's key revenue streams include fees charged for individual background checks, bundled screening packages, and ongoing screening programs for large enterprises. Additionally, FA has established significant partnerships with various technology and data providers, enhancing its service offerings and operational efficiency. The company also benefits from cross-selling opportunities by providing ancillary services, such as drug testing and occupational health services, to existing clients, further contributing to its earnings.

First Advantage Financial Statement Overview

Summary

Balance sheet strength improved sharply with leverage falling to near-zero debt-to-equity in 2025, and 2025 operating/free cash flow rebounded materially. Offsetting this, net profitability has been inconsistent with losses in 2024–2025 despite solid EBITDA, keeping overall financial performance in the middle range.

Income Statement

Revenue growth has generally been positive, including ~7.7% growth in 2025 versus 2024, but profitability has been volatile. The company swung from healthy profitability in 2021–2023 (positive net margins, double‑digit EBITDA margins) to losses in 2024 and a smaller loss in 2025, despite a solid 2025 EBITDA margin (~24%). Strength is the ability to generate strong EBITDA, while the key weakness is inconsistent net profitability and margin compression in 2024–2025.

Balance Sheet

Leverage improved dramatically: debt-to-equity fell from ~1.65x in 2024 to near-zero (~0.01x) in 2025, while equity remained sizable (~$1.31B). This de-risks the capital structure and improves financial flexibility. The main weakness is returns to shareholders have been negative in 2024–2025 (negative return on equity), reflecting the recent net losses.

Cash Flow

Cash generation strengthened materially in 2025 with operating cash flow of ~$195M versus ~$28M in 2024, and free cash flow also jumped to ~$195M. Cash flow covered reported earnings well in the loss years (free cash flow remained positive despite negative net income), which supports liquidity and resilience. The key weakness is that cash flow coverage versus operating earnings is still not consistently strong (operating cash flow covered less than 1x of EBIT in 2024–2025), suggesting working-capital or non-cash item volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.57B	860.21M	763.76M	810.02M	712.29M
Gross Profit	470.50M	411.29M	376.98M	401.10M	360.13M
EBITDA	380.00M	83.15M	210.99M	232.52M	195.13M
Net Income	-34.82M	-110.27M	37.29M	64.60M	16.05M
Balance Sheet
Total Assets	3.83B	3.92B	1.63B	1.89B	1.89B
Cash, Cash Equivalents and Short-Term Investments	240.00M	168.69M	213.77M	393.61M	293.58M
Total Debt	9.09M	2.16B	567.74M	569.49M	554.85M
Total Liabilities	2.52B	2.62B	723.92M	759.21M	754.34M
Stockholders Equity	1.31B	1.31B	906.73M	1.13B	1.13B
Cash Flow
Free Cash Flow	140.87M	26.48M	135.12M	184.24M	124.88M
Operating Cash Flow	195.13M	28.20M	162.82M	212.77M	148.68M
Investing Cash Flow	-54.13M	-1.65B	-66.85M	-48.60M	-72.43M
Financing Cash Flow	-70.76M	1.58B	-273.56M	-59.15M	63.85M

First Advantage Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 11.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FA, the sentiment is Neutral. The current price of 11.83 is above the 20-day moving average (MA) of 10.92, below the 50-day MA of 13.21, and below the 200-day MA of 15.16, indicating a neutral trend. The MACD of -0.71 indicates Negative momentum. The RSI at 52.07 is Neutral, neither overbought nor oversold. The STOCH value of 89.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FA.

First Advantage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNF	77 Outperform	$4.02B	31.07	6.50%	0.71%	0.20%	2.72%
ABM	73 Outperform	$2.62B	17.18	9.10%	2.20%	4.62%	102.72%
LZ	66 Neutral	$1.20B	82.09	11.64%	―	7.17%	-5.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FA	63 Neutral	$2.05B	-58.19	-2.66%	―	93.41%	-2515.85%
CBZ	60 Neutral	$1.44B	16.27	7.44%	―	59.19%	-35.47%
BV	59 Neutral	$1.29B	-1,653.01	3.13%	―	-3.40%	-51.58%

First Advantage Corporate Events

First Advantage director Bianca Stoica resigns from board

On January 29, 2026, First Advantage Corporation announced that director Bianca Stoica resigned from the company’s Board of Directors and its Compensation Committee, effective immediately. The company stated that her departure did not result from any disagreement with management, the board, or the company’s operations, policies, or practices, suggesting a routine governance change with limited operational or strategic impact for stakeholders.

The most recent analyst rating on (FA) stock is a Hold with a $15.00 price target. To see the full list of analyst forecasts on First Advantage stock, see the FA Stock Forecast page.