First Advantage (FA)
NASDAQ:FA
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First Advantage
(NASDAQ:FA)
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Rating:69Neutral
Price Target:
$17.50
▲(39.89% Upside)
Action:Reiterated
Date:06/09/26
The score is driven primarily by improving financial momentum and cash flow strength, supported by a constructive technical uptrend and a positive earnings call with reaffirmed guidance and margin/EPS progress. The biggest constraint is valuation (very high P/E) and the underlying risk of inconsistent net profitability and base-growth softness.
Positive Factors
Free cash flow strength
Sustained TTM operating and free cash flow provide durable funding for debt reduction, share repurchases, and organic investment. Reliable cash conversion cushions earnings volatility, supports capital allocation flexibility, and underpins long-term deleveraging and reinvestment strategies.
Negative Factors
Thin net profitability
Near-zero net margins limit the firm's buffer against downturns and raise sensitivity to nonoperating items or one-time charges. Persistent bottom-line volatility can constrain reinvestment, reduce retained earnings buildup, and make long-term earnings durability dependent on continued margin and synergy execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow strength
Sustained TTM operating and free cash flow provide durable funding for debt reduction, share repurchases, and organic investment. Reliable cash conversion cushions earnings volatility, supports capital allocation flexibility, and underpins long-term deleveraging and reinvestment strategies.
Read all positive factors
First Advantage (FA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.67B
Dividend YieldN/A
Average Volume (3M)1.50M
Price to Earnings (P/E)316.9
Beta (1Y)1.21
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 Cap0.95
Enterprise Value/Revenue1.57
Enterprise Value/Gross Profit4.34
Enterprise Value/Ebitda6.15
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 (FA) is a global technology firm that delivers solutions centered on human capital, specializing in verification, screening, safety protocols, and regulatory adherence. The company provides an extensive array of service...
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 | 411.09M | 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
13.92
Positive
12.76
Positive
13.68
Positive
Market Momentum
0.52
Positive
54.23
Neutral
26.58
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 15.62, below the 50-day MA of 13.92, and below the 200-day MA of 13.68, indicating a neutral trend. The MACD of 0.52 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 26.58 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 | $2.67B | 316.93 | 0.66% | ― | 53.53% | ― | |
69 Neutral | $4.79B | 35.46 | 6.24% | 0.71% | 0.76% | -8.22% | |
67 Neutral | $2.70B | 17.15 | 8.80% | 2.20% | 6.53% | 107.41% | |
67 Neutral | $1.82B | 13.54 | 8.32% | ― | 28.34% | 67.93% | |
64 Neutral | $1.01B | 90.61 | 6.38% | ― | 12.87% | -63.11% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $1.18B | 25.91 | 2.62% | ― | -0.02% | -154.82% |
* Industrials Sector Average
FA
First Advantage
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First Advantage Corporate Events
Executive/Board ChangesShareholder Meetings
First Advantage Shareholders Endorse Board, Pay and Auditor
Positive
Jun 8, 2026
On June 5, 2026, First Advantage Corporation held its 2026 Annual Meeting of Stockholders, with approximately 94% of eligible shares represented in person or by proxy, underscoring strong shareholder engagement. At the meeting, investors elected C...
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.