First Advantage (FA) AI Stock Analysis

• Market Cap: $3.06B
• Dividend Yield: N/A
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 549.4
• Beta (1Y): 1.08
• Revenue Growth: 37.97%
• EPS Growth: -499.29%
• Country: US
• Employees: 10,000
• Sector: Industrials
• Sector Strength: 89
• Industry: Specialty Business Services
• EPS (TTM): 0.17
• Shares Outstanding: 173,673,550
• 10 Day Avg. Volume: 810,177
• 30 Day Avg. Volume: 1,051,557
• PEG Ratio: 0.61
• Price to Book (P/B): 2.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 842.77
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 5.54
• Enterprise Value/Ebitda: 4.82
• 1Y Price Target: $19.75
• Price Target Upside: 12.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 60 Neutral
• Price Target: $18.50 ▲(4.93%Upside)

First Advantage shows strong revenue growth and successful strategic initiatives, as highlighted in the earnings call. However, profitability issues and a challenging valuation due to a negative P/E ratio are significant concerns. Technical indicators provide a stable outlook, but macroeconomic uncertainties and negative base growth remain risks.

Positive Factors

Acquisition Integration

Management continues to execute well on all things under its control, such as Sterling integration, cross-sell/upsell, and new logo growth.

Financial Performance

First Advantage's first-quarter results came in handily above our estimates due to better-than-expected base growth, solid cost control, and ahead-of-schedule synergy realization.

Market Position

First Advantage is recognized as the clear market leader, benefiting from scale advantages.

Negative Factors

Hiring Trends

Poor hiring trends and elevated leverage ratio will keep the shares range-bound over the next 12 months.

Labor Market Challenges

The challenging labor market and elevated net leverage will keep the shares range-bound over the next 12 months.

Macroeconomic Sensitivity

The business's sensitivity to macroeconomic factors could mean a bumpy ride in the short term.

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 wide array of screening and verification services tailored to meet the needs of various industries. The company's key revenue streams include employment background checks, which involve comprehensive assessments of candidates' criminal histories, education, and employment verifications. Additionally, tenant screening services provide landlords and property managers with critical insights to make informed leasing decisions. First Advantage also offers specialized solutions for the gig economy, providing background checks for freelance and temporary workers. Partnerships with businesses and organizations in need of large-scale screening solutions further bolster its revenue. The company's ability to integrate with clients' human resources and tenant management systems enhances its service offerings and customer retention, contributing significantly to its earnings.

First Advantage Financial Statement Overview

Summary

First Advantage shows strong revenue growth, but profitability challenges persist with negative net income and margins. The balance sheet is stable with low leverage, a positive aspect, but negative return on equity is a concern. Cash flow management is mixed, with positive free cash flow but declining growth. The company is in a growth phase but needs to improve profitability and cash flow to enhance financial health.

Income Statement

The income statement shows a mixed performance. Revenue has grown significantly by 21.6% TTM over the previous year, indicating strong growth. However, the company is currently operating at a net loss with a negative net profit margin and EBIT margin, which raises concerns about profitability. The gross profit margin remains healthy at 47% TTM, suggesting good control over cost of goods sold. Despite the positive trend in revenue, the consistent net losses are a significant weakness.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio is low at 0.03 TTM, indicating low leverage, which is a positive sign. The equity ratio stands at 33%, which shows a reasonable portion of assets financed by equity. However, the return on equity is negative due to the net losses, which is a critical issue. Overall, the company's low leverage and decent equity position are strengths, but the negative profitability impacts the score.

Cash Flow

The cash flow statement presents a mixed picture. Operating cash flow is positive, though significantly reduced in TTM compared to the previous year, indicating potential operational cash constraints. Free cash flow is positive at $3.43 million TTM, but the free cash flow growth rate is negative, which is concerning. The free cash flow to net income ratio cannot be evaluated due to negative net income. The ability to generate free cash flow is a strength, but the decline in operating cash flow and free cash flow growth are weaknesses.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	860.21M	763.76M	810.02M	712.29M	509.15M
Gross Profit	411.29M	376.98M	401.10M	360.13M	76.05M
EBITDA	83.15M	210.99M	232.52M	195.13M	88.96M
Net Income	-110.27M	37.29M	64.60M	16.05M	-84.02M
Balance Sheet
Total Assets	3.92B	1.63B	1.89B	1.89B	1.76B
Cash, Cash Equivalents and Short-Term Investments	168.69M	213.77M	393.61M	293.58M	154.09M
Total Debt	2.16B	567.74M	569.49M	554.85M	785.30M
Total Liabilities	2.62B	723.92M	759.21M	754.34M	969.42M
Stockholders Equity	1.31B	906.73M	1.13B	1.13B	794.27M
Cash Flow
Free Cash Flow	26.48M	135.12M	184.24M	124.88M	34.53M
Operating Cash Flow	28.20M	162.82M	212.77M	148.68M	52.24M
Investing Cash Flow	-1.65B	-66.85M	-48.60M	-72.43M	-17.61M
Financing Cash Flow	1.58B	-273.56M	-59.15M	63.85M	36.68M

First Advantage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FA, the sentiment is Positive. The current price of 17.63 is above the 20-day moving average (MA) of 16.96, above the 50-day MA of 17.42, and above the 200-day MA of 17.33, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 55.22 is Neutral, neither overbought nor oversold. The STOCH value of 59.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FA.

First Advantage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CBZ	76 Outperform	$4.06B	50.81	6.25%	―	32.27%	-40.50%
ABM	75 Outperform	$2.97B	38.20	4.30%	2.61%	3.52%	-67.27%
LZ	72 Outperform	$1.60B	51.63	17.09%	―	3.25%	56.17%
BV	66 Neutral	$1.51B	85.78	2.56%	―	-2.85%	-108.99%
UNF	61 Neutral	$3.13B	21.54	7.15%	0.97%	4.18%	18.93%
FA	60 Neutral	$3.06B	549.40	-13.59%	―	37.97%	-499.29%
Sector *	58 Neutral	HK$14.28B	4.63	-3.01%	7.26%	3.67%	-54.16%

First Advantage Corporate Events

First Advantage Holds 2025 Annual Stockholders Meeting

On June 6, 2025, First Advantage Corporation held its 2025 Annual Meeting of Stockholders, where approximately 96% of the shares entitled to vote were represented. During the meeting, stockholders elected Class I directors for a three-year term, ratified Deloitte & Touche LLP as the independent public accounting firm for 2025, and approved the compensation of named executive officers on a non-binding basis.

The most recent analyst rating on (FA) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on First Advantage stock, see the FA Stock Forecast page.