First Acceptance (FACO) AI Stock Analysis

• Market Cap: $173.59M
• Dividend Yield: N/A
• Average Volume (3M): 9.82K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 0.26
• Revenue Growth: -7.26%
• EPS Growth: -62.71%
• Country: US
• Employees: 633
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Specialty
• EPS (TTM): 0.24
• Shares Outstanding: 38,150,906
• 10 Day Avg. Volume: 7,392
• 30 Day Avg. Volume: 9,824
• PEG Ratio: 0.28
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 0.31
• P/FCF Ratio: 3.41
• Enterprise Value/Market Cap: 0.77
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 1.10
• Enterprise Value/Ebitda: 3.11
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $5.00 ▲(17.65% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is driven primarily by improved financial health (profitable 2023–2025, consistently positive operating/free cash flow, and lower leverage), with a meaningful boost from a low P/E valuation. Technicals are supportive with price above major moving averages and a positive MACD, but elevated RSI/Stoch and the 2025 revenue decline/earnings normalization keep the score from being higher.

Positive Factors

Balance Sheet Health

Low leverage with a debt-to-equity ratio of 0.25 suggests financial stability, providing the company with flexibility to invest in growth opportunities.

Profitability Margins

Stable profitability margins indicate effective cost management and pricing strategies, supporting long-term financial health despite revenue challenges.

Cash Generation Efficiency

A high free cash flow to net income ratio demonstrates the company's ability to convert earnings into cash, enhancing its capacity to fund operations and growth.

Negative Factors

Revenue Growth Decline

Declining revenue growth may hinder the company's ability to expand its market presence and compete effectively, impacting future profitability.

Cash Flow Growth Challenges

Decreasing cash flow growth could limit the company's financial flexibility, affecting its ability to invest in strategic initiatives and manage liabilities.

Earnings Growth Decline

A sharp decline in EPS growth suggests potential operational inefficiencies or market challenges, which could undermine investor confidence and long-term growth prospects.

First Acceptance Business Overview & Revenue Model

Company Description

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.

How the Company Makes Money

First Acceptance generates revenue primarily through the underwriting of non-standard auto insurance policies. The company collects premiums from policyholders, which constitute the main revenue stream. Additionally, FACO may earn income from investment activities related to the premiums collected, as these funds are often invested to generate returns. The company also benefits from partnerships with various agents and brokers who help distribute its insurance products, expanding its market reach and customer base. Furthermore, it may engage in reinsurance agreements to manage risk and stabilize earnings, contributing to its overall financial performance.

First Acceptance Financial Statement Overview

Summary

Financials show a meaningful recovery from 2021–2022, with solid profitability in 2023–2025, stronger cash generation, and improving/low leverage by 2025. Offsetting this, results appear volatile (very strong 2023 followed by a step-down) and 2025 revenue declined year over year, which tempers confidence in earnings stability.

Income Statement

Profitability has improved materially versus 2021–2022 losses, with 2023–2025 remaining solidly profitable. However, performance is volatile: 2023 showed unusually strong margins and earnings, followed by a sharp step-down in 2024–2025, and 2025 revenue declined (-5.1% year over year). A notable positive is the 2025 gross margin expansion versus 2024, but the overall trajectory is mixed due to the revenue contraction and normalization in earnings power after 2023.

Balance Sheet

Leverage looks conservative and improving, with debt-to-equity declining from elevated levels in 2022 to a low level by 2025, alongside rising equity. Returns on equity are healthy in 2024–2025, though significantly below the outsized 2023 level, highlighting earnings volatility. Overall balance sheet strength is supported by low leverage, but investors should note the historical swing from weak 2022 returns to strong profitability in later years.

Cash Flow

Cash generation is a clear strength in the last three years: operating cash flow and free cash flow are consistently positive in 2023–2025, and free cash flow closely tracks reported earnings (near 1x) in 2023–2025. Free cash flow growth re-accelerated strongly in 2025 after a flat/slightly down 2024, but longer-term stability is tempered by the negative operating and free cash flow seen in 2021–2022.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	506.34M	559.43M	487.54M	302.30M	285.25M
Gross Profit	200.89M	40.53M	33.48M	-15.11M	2.05M
EBITDA	43.11M	38.61M	105.40M	-16.32M	999.00K
Net Income	30.23M	26.29M	73.91M	-17.49M	-1.23M
Balance Sheet
Total Assets	725.62M	680.39M	570.37M	355.94M	322.65M
Cash, Cash Equivalents and Short-Term Investments	78.30M	173.08M	302.67M	162.40M	180.49M
Total Debt	45.53M	45.40M	46.02M	55.30M	51.97M
Total Liabilities	525.74M	510.83M	428.52M	55.30M	51.97M
Stockholders Equity	199.88M	169.56M	141.85M	65.52M	92.90M
Cash Flow
Free Cash Flow	46.57M	51.79M	83.82M	-8.10M	-10.46M
Operating Cash Flow	47.14M	52.12M	85.16M	-3.89M	-6.60M
Investing Cash Flow	-48.48M	-75.53M	-24.53M	-7.22M	34.48M
Financing Cash Flow	-6.28M	-446.00K	83.00K	-642.00K	-15.30M

First Acceptance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.25
• 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 FACO, the sentiment is Positive. The current price of 4.25 is below the 20-day moving average (MA) of 4.33, above the 50-day MA of 4.19, and above the 200-day MA of 3.68, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 63.42 is Neutral, neither overbought nor oversold. The STOCH value of 71.29 is Neutral, 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	74 Outperform	$173.59M	5.26	16.42%	―	-7.26%	-62.71%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HIPO	65 Neutral	$666.16M	13.17	15.26%	―	34.48%	―
JRVR	63 Neutral	$278.57M	6.16	7.44%	0.63%	-19.08%	56.21%
EIG	59 Neutral	$757.27M	95.96	1.04%	2.94%	1.69%	-52.43%
MBI	50 Neutral	$291.95M	-1.73	―	―	―	67.72%