First Acceptance (FACO) AI Stock Analysis

• Market Cap: $127.04M
• Dividend Yield: N/A
• Average Volume (3M): 3.62K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 0.49
• Revenue Growth: -7.26%
• EPS Growth: -62.71%
• Country: US
• Employees: 633
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Specialty
• EPS (TTM): 0.27
• Shares Outstanding: 38,150,906
• 10 Day Avg. Volume: 8,173
• 30 Day Avg. Volume: 3,615
• PEG Ratio: -0.07
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 2.23
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: 1.09
• Enterprise Value/Ebitda: 4.75
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $4.50 ▲(11.66% Upside)

First Acceptance's stock score is driven by its strong valuation, indicating potential undervaluation with a low P/E ratio. Technical analysis supports a bullish trend, though caution is advised due to overbought signals. Financial performance is mixed, with stable profitability but challenges in revenue and cash flow growth. The absence of earnings call data and corporate events means these factors do not influence the score.

First Acceptance Business Overview & Revenue Model

Company Description

First Acceptance Corporation (FACO) is an insurance holding company that specializes in providing non-standard auto insurance products and related services. Operating primarily in the United States, FACO focuses on serving drivers who may have difficulty obtaining traditional insurance coverage due to factors such as driving history or credit score. The company operates through its subsidiaries, offering various insurance products designed to meet the needs of high-risk drivers, along with additional services such as payment plans and roadside assistance.

How the Company Makes Money

First Acceptance generates revenue primarily through the sale of non-standard auto insurance policies. The company earns premiums from policyholders, which can vary based on individual risk profiles, coverage options, and state regulations. Additionally, FACO may receive income from investment activities, including the management of reserves set aside for future claims. Key revenue streams include direct premiums written, policy renewals, and ancillary services such as installment payment plans. Strategic partnerships with agents and brokers also facilitate sales and distribution, enhancing the company's reach in the competitive insurance market.

First Acceptance Financial Statement Overview

Summary

First Acceptance presents a mixed financial performance. The income statement shows stable profitability margins despite a decline in revenue growth. The balance sheet is strong with low leverage and high return on equity, indicating financial stability. However, the cash flow statement highlights challenges in cash flow growth, which could impact future financial flexibility. The company should focus on improving revenue growth and cash flow generation to strengthen its financial position.

Income Statement

First Acceptance shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate by 3.16%, which is concerning. However, the company maintains a stable gross profit margin of 29.31% and a net profit margin of 4.66%. The EBIT and EBITDA margins are modest at 6.50% and 6.68%, respectively. The company has shown resilience in maintaining profitability despite revenue challenges.

Balance Sheet

The balance sheet reflects a solid financial position with a debt-to-equity ratio of 0.25, indicating low leverage. The return on equity (ROE) is strong at 14.29%, showcasing effective utilization of equity. The equity ratio stands at 22.99%, suggesting a stable capital structure. Overall, the company demonstrates financial stability with manageable debt levels.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 11.51% in the TTM period, which is a concern. The operating cash flow to net income ratio is not available, indicating potential issues in cash flow conversion. However, the free cash flow to net income ratio is high at 98.36%, suggesting efficient cash generation relative to net income. The company needs to address cash flow growth to enhance financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	522.23M	559.43M	487.54M	302.30M	285.25M	269.58M
Gross Profit	153.09M	559.43M	487.54M	302.30M	285.25M	269.58M
EBITDA	35.18M	38.61M	105.40M	-16.32M	999.00K	15.86M
Net Income	24.35M	26.29M	73.91M	-17.49M	-1.23M	10.42M
Balance Sheet
Total Assets	773.35M	680.39M	570.37M	355.94M	322.65M	340.95M
Cash, Cash Equivalents and Short-Term Investments	401.42M	173.08M	302.67M	162.40M	180.49M	195.19M
Total Debt	45.16M	45.40M	46.02M	55.30M	51.97M	52.92M
Total Liabilities	595.55M	510.83M	428.52M	55.30M	51.97M	52.92M
Stockholders Equity	177.79M	169.56M	141.85M	65.52M	92.90M	111.69M
Cash Flow
Free Cash Flow	33.50M	51.79M	83.82M	-8.10M	-10.46M	-1.59M
Operating Cash Flow	34.06M	52.12M	85.16M	-3.89M	-6.60M	497.00K
Investing Cash Flow	-42.76M	-75.53M	-24.53M	-7.22M	34.48M	-18.52M
Financing Cash Flow	-6.32M	-446.00K	83.00K	-642.00K	-15.30M	-7.03M

First Acceptance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FACO, the sentiment is Positive. The current price of 4.03 is above the 20-day moving average (MA) of 3.38, above the 50-day MA of 3.44, and above the 200-day MA of 3.39, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 81.18 is Negative, neither overbought nor oversold. The STOCH value of 90.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FACO.

First Acceptance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FACO	72 Outperform	$127.04M	5.27	14.73%	―	-7.26%	-62.71%
EIG	72 Outperform	$843.64M	14.77	5.86%	3.04%	1.69%	-52.43%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HIPO	55 Neutral	$898.26M	-85.19	25.65%	―	34.48%	―
JRVR	51 Neutral	$255.11M	―	-6.97%	0.72%	-19.08%	56.21%
AMBC	45 Neutral	$384.21M	―	-4.09%	―	-17.06%	-118.90%
MBI	43 Neutral	$342.31M	-1.48	―	―	―	67.72%