First Advantage (FA)
NASDAQ:FA
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First Advantage
(NASDAQ:FA)
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Rating:68Neutral
Price Target:
$17.50
▲(39.89% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by improving operational momentum and strong cash generation, reinforced by a constructive earnings call with reaffirmed guidance and margin/EPS expansion. This is tempered by earnings volatility and a very expensive valuation (high P/E), while technicals show an uptrend but with overbought risk.
Positive Factors
Strong cash generation
Consistently strong operating and free cash flow provide durable funding for deleveraging, share repurchases, and reinvestment into tech and go‑to‑market. High cash conversion cushions the business against earnings volatility and supports strategic optionality over the next 2–6 months.
Negative Factors
Thin, volatile net profitability
Very thin reported net margins and historical annual losses indicate sensitivity of bottom‑line to one‑offs, tax, interest, or integration costs. This volatility limits retained earnings accumulation and makes long‑term capital allocation and consistent shareholder returns less predictable.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently strong operating and free cash flow provide durable funding for deleveraging, share repurchases, and reinvestment into tech and go‑to‑market. High cash conversion cushions the business against earnings volatility and supports strategic optionality over the next 2–6 months.
Read all positive factors
First Advantage (FA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.62B
Dividend YieldN/A
Average Volume (3M)1.50M
Price to Earnings (P/E)235.8
Beta (1Y)1.22
Revenue Growth53.53%
EPS GrowthN/A
CountryUS
Employees10,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.04
Shares Outstanding171,537,050
10 Day Avg. Volume1,126,547
30 Day Avg. Volume1,496,164
Financial Highlights & Ratios
PEG Ratio0.99
Price to Book (P/B)1.92
Price to Sales (P/S)1.60
P/FCF Ratio17.86
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue1.50
Enterprise Value/Gross Profit4.13
Enterprise Value/Ebitda5.83
Forecast
1Y Price Target
$17.29Price Target Upside38.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)1.22
Revenue Forecast (FY)$1.67B
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 scr...
How the Company Makes Money
FA primarily makes money by charging employer customers fees for background screening and related verification services, typically on a per-screen (per candidate/order) basis, with pricing varying by the type and depth of checks requested and by g...
First Advantage Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational and financial momentum with double-digit improvements in key profitability metrics, robust cash generation, meaningful synergy realization, active capital allocation (share buybacks and debt prepayments), and accelerating product differentiation (Digital Identity and AI). Management balanced these positives with a conservative stance on base growth (flat to modestly negative), vertical-specific pressure in financial services, and sensitivity to macro/geopolitical risks. Overall, the positives (revenue, margin, EPS, cash flow, deleveraging, product traction and pipeline strength) significantly outweigh the contained challenges.Positive Updates
Revenue Growth
Q1 revenue of $385 million, up 8.6% year-over-year; fourth consecutive quarter of positive YoY revenue growth and outperformance versus prior expectations.
Negative Updates
Working Capital Outflows
Q1 included some larger working capital outflows despite strong operating cash generation, noted as a factor in quarter timing and cash flow profile.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Q1 revenue of $385 million, up 8.6% year-over-year; fourth consecutive quarter of positive YoY revenue growth and outperformance versus prior expectations.
Read all positive updates
Company Guidance
First Advantage reaffirmed its full‑year 2026 guidance after a strong Q1 (revenue $385M, +8.6% YoY; adjusted EBITDA $105M, +14% YoY; adjusted EBITDA margin 27.3%, +130 bps YoY; adjusted diluted EPS $0.26, +53% YoY) and expects revenue growth in the mid‑ to high‑single‑digits in Q2 and Q3 (slightly lower in Q4), with base growth modestly negative for the year (0% to -2%, and likely below that range in Q4), adjusted EBITDA margin improving toward ~28% in Q2 and roughly 29% in the second half, and adjusted diluted EPS rising to the high‑$0.20s in Q2 and the mid‑$0.30s in Q3 and Q4; management cited supportive drivers including a 12% combined contribution from new logo/upsell/cross‑sell, 97% retention, 17 enterprise bookings (≥$500K ACV) in Q1 and a record late‑stage pipeline, with guidance assumptions provided in the presentation appendix.First Advantage Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
77
Positive
Cash Flow
73
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.61B | 1.57B | 860.21M | 763.76M | 810.02M | 712.29M |
| Gross Profit | 582.04M | 470.50M | 411.29M | 376.98M | 401.10M | 360.13M |
| EBITDA | 412.03M | 380.00M | 83.15M | 210.99M | 232.52M | 195.13M |
| Net Income | 8.54M | -34.82M | -110.27M | 37.29M | 64.60M | 16.05M |
Balance Sheet | ||||||
| Total Assets | 3.75B | 3.83B | 3.92B | 1.63B | 1.89B | 1.89B |
| Cash, Cash Equivalents and Short-Term Investments | 225.91M | 240.00M | 168.69M | 213.77M | 393.61M | 293.58M |
| Total Debt | 8.23M | 9.09M | 2.16B | 567.74M | 569.49M | 554.85M |
| Total Liabilities | 2.46B | 2.52B | 2.62B | 723.92M | 759.21M | 754.34M |
| Stockholders Equity | 1.29B | 1.31B | 1.31B | 906.73M | 1.13B | 1.13B |
Cash Flow | ||||||
| Free Cash Flow | 218.67M | 140.87M | 26.48M | 135.12M | 184.24M | 124.88M |
| Operating Cash Flow | 225.09M | 195.13M | 28.20M | 162.82M | 212.77M | 148.68M |
| Investing Cash Flow | -57.07M | -54.13M | -1.65B | -66.85M | -48.60M | -72.43M |
| Financing Cash Flow | -109.03M | -70.76M | 1.58B | -273.56M | -59.15M | 63.85M |
First Advantage Technical Analysis
Positive
12.51
Price Trends
12.49
Positive
12.65
Positive
13.74
Positive
Market Momentum
0.84
Negative
63.24
Neutral
53.84
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 12.51 is below the 20-day moving average (MA) of 14.07, above the 50-day MA of 12.49, and below the 200-day MA of 13.74, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 63.24 is Neutral, neither overbought nor oversold. The STOCH value of 53.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FA.
First Advantage Risk Analysis
First Advantage disclosed 46 risk factors in its most recent earnings report. First Advantage reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Advantage Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $4.59B | 49.97 | 6.24% | 0.71% | 0.76% | -8.22% | |
68 Neutral | $2.62B | 235.83 | 0.66% | ― | 53.53% | ― | |
68 Neutral | $1.10B | 224.52 | 6.38% | ― | 12.87% | -63.11% | |
67 Neutral | $1.69B | 2.56 | 8.32% | ― | 28.34% | 67.93% | |
65 Neutral | $2.31B | 17.89 | 8.80% | 2.20% | 5.59% | 100.00% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $1.16B | 165.11 | 2.62% | ― | -0.02% | -154.82% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.