First Advantage (FA)
NASDAQ:FA
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First Advantage
(NASDAQ:FA)
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Rating:63Neutral
Price Target:
$12.50
▲(11.71% Upside)
Action:ReiteratedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
First Advantage (FA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.95B
Dividend YieldN/A
Average Volume (3M)1.50M
Price to Earnings (P/E)―
Beta (1Y)1.07
Revenue Growth93.41%
EPS Growth-2515.85%
CountryUS
Employees10,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.30
Shares Outstanding174,319,120
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 Cap0.89
Enterprise Value/Revenue1.10
Enterprise Value/Gross Profit2.74
Enterprise Value/Ebitda4.46
Forecast
1Y Price Target
$15.33Price Target Upside37.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)1.2
Revenue Forecast (FY)$1.66B
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
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 scre...
First Advantage Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum — a record Q4 and best year in 2025, robust go-to-market execution (17% upsell/new logo growth in Q4), meaningful synergy progress and materially improved cash flow. Management is confident, initiating debt prepayments and a $100M buyback while guiding to continued revenue and EPS growth in 2026. Headwinds include slightly negative base revenue, margin dilution from higher pass-through fees in newer wins, elevated leverage (4.0x) and some vertical-specific pressures, plus timing risk as management balances synergy capture with incremental growth investments. On balance, the positive achievements, growth drivers and capital actions substantially outweigh the manageable challenges.Positive Updates
Record Q4 and Strong FY2025 Performance
Company reported its best quarter ever: Q4 pro forma revenue growth of 12% with Q4 revenues of $420 million. Full-year revenue around $1.57 billion with adjusted EBITDA of $441 million; pro forma adjusted EBITDA growth of 11% and full-year adjusted diluted EPS growth of 27%. Q4 adjusted diluted EPS rose 67% year-over-year.
Negative Updates
Base Revenue Remains Slightly Negative
Base revenue was slightly negative in Q4 and management expects base growth to be modestly negative in 2026 (between 0% and -2%), creating a reliance on go-to-market wins and upsell to drive total growth.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Q4 and Strong FY2025 Performance
Company reported its best quarter ever: Q4 pro forma revenue growth of 12% with Q4 revenues of $420 million. Full-year revenue around $1.57 billion with adjusted EBITDA of $441 million; pro forma adjusted EBITDA growth of 11% and full-year adjusted diluted EPS growth of 27%. Q4 adjusted diluted EPS rose 67% year-over-year.
Read all positive updates
Company Guidance
First Advantage guided 2026 revenues of $1.625–$1.70 billion (about 6% y/y at the midpoint), adjusted EBITDA of $460–$485 million and adjusted diluted EPS of $1.25 (midpoint), which implies roughly a 20% two‑year CAGR in adjusted diluted EPS versus 2024, and free cash flow of $160–$190 million. The company expects base revenue to be modestly negative (0% to −2%) but overall quarterly revenue growth in mid‑ to high‑single digits with acceleration in the second half; customer retention is assumed to remain ~96%–97%. Management plans to action total synergies of $65–$80 million by year‑end (building on $55M already actioned) and expects full‑year adjusted EBITDA margin expansion of ~40 bps at the midpoint, with margin phasing of ≈26% in Q1, ~28% in Q2 and ~29% in H2. Quarterly EPS pacing was guided to about ≥$0.20 in Q1, high‑$0.20s in Q2 and mid‑ to upper‑$0.30s in Q3–Q4, and the plan assumes continued investments in product and go‑to‑market while pursuing a long‑term net leverage target of 2–3x.First Advantage Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
76
Positive
Cash Flow
72
Positive
| 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
Negative
11.19
Price Trends
11.40
Negative
12.86
Negative
14.37
Negative
Market Momentum
-0.04
Negative
48.82
Neutral
49.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FA, the sentiment is Negative. The current price of 11.19 is above the 20-day moving average (MA) of 11.12, below the 50-day MA of 11.40, and below the 200-day MA of 14.37, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 48.82 is Neutral, neither overbought nor oversold. The STOCH value of 49.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | $4.45B | 49.97 | 4.66% | 0.71% | 0.20% | 2.72% | |
66 Neutral | $1.05B | 115.09 | 8.17% | ― | 7.17% | -5.86% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $1.95B | -72.27 | -2.68% | ― | 93.41% | -2515.85% | |
60 Neutral | $2.26B | 17.89 | 8.80% | 2.20% | 4.62% | 102.72% | |
60 Neutral | $1.56B | 27.64 | 6.21% | ― | 59.19% | -35.47% | |
59 Neutral | $1.10B | -19.84 | 2.88% | ― | -3.40% | -51.58% |
* Industrials Sector Average
FA
First Advantage
11.19
-1.84
-14.12%
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First Advantage Corporate Events
Executive/Board Changes
First Advantage director Bianca Stoica resigns from board
Neutral
Jan 30, 2026
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...
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.