First Acceptance (FACO) AI Stock Analysis

• Market Cap: $120.94M
• Dividend Yield: N/A
• Average Volume (3M): 11.27K
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.13
• Revenue Growth: 0.83%
• EPS Growth: -71.96%
• Country: US
• Employees: 633
• Sector: Financial
• Sector Strength: 77
• Industry: Insurance - Specialty
• EPS (TTM): 0.07
• Shares Outstanding: 38,150,906
• 10 Day Avg. Volume: 13,810
• 30 Day Avg. Volume: 11,270
• PEG Ratio: -0.15
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.41
• Enterprise Value/Market Cap: 0.16
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.03
• Enterprise Value/Ebitda: 0.05
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: ―

First Acceptance demonstrates robust financial health with strong revenue growth and effective cash management. Its valuation is appealing with a low P/E ratio, although the lack of a dividend could deter some investors. Technical analysis indicates stability over the long term but some short-term caution. Challenges in operational efficiency remain a key risk.

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 makes money through the sale of insurance policies, primarily focusing on non-standard auto insurance. The company generates revenue by collecting premiums from policyholders, which are set based on the level of risk associated with the insured individual and the coverage provided. Key revenue streams include policy premiums, policy fees, and commissions. Additionally, First Acceptance partners with a network of agents and brokers to distribute its products, expanding its reach to a broader customer base. Investment income from the reserves held to pay future claims also contributes to the company's earnings.

First Acceptance Financial Statement Overview

Summary

First Acceptance shows a robust financial recovery and sound cash management, with strong revenue growth and improved profitability. The balance sheet remains stable, though with some fluctuations in equity. The company demonstrates effective cash flow management, positioning it well for future growth. However, challenges remain in operational efficiency, as highlighted by the 0% EBIT margin.

Income Statement

First Acceptance has demonstrated a strong recovery in its income statement metrics. The revenue growth rate from 2023 to 2024 was approximately 14.7%, showing a consistent upward trajectory. The net profit margin improved significantly from 2022's negative figure to 4.7% in 2024. However, the EBIT margin was 0% in 2024, indicating some challenges in operational efficiency. EBITDA margin was 6.9%, showing reasonable profitability before interest, taxes, depreciation, and amortization.

Balance Sheet

The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.27, indicating a manageable level of debt. The equity ratio was 24.9%, suggesting a reasonable proportion of equity financing. Return on Equity (ROE) was 15.5% in 2024, reflecting good profitability relative to shareholder equity. However, the company's equity position has been fluctuating, which could pose potential risks.

Cash Flow

The cash flow statements show strong management of cash resources. Free cash flow grew significantly by approximately 527.7% from 2022 to 2023, and further increased in 2024. The operating cash flow to net income ratio was 1.98 in 2024, indicating good cash generation relative to net income. The free cash flow to net income ratio was 1.97, further demonstrating effective cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
559.43M	487.54M	302.30M	285.25M	269.58M
	Gross Profit
559.43M	487.54M	302.30M	285.25M	269.58M
	EBIT
33.42M	2.38M	-19.46M	-1.56M	13.64M
	EBITDA
38.61M	105.40M	-16.32M	999.00K	15.86M
	Net Income Common Stockholders
26.29M	73.91M	-17.49M	-1.23M	10.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
173.08M	302.67M	162.40M	180.49M	195.19M
	Total Assets
680.39M	570.37M	355.94M	322.65M	340.95M
	Total Debt
45.40M	46.02M	55.30M	51.97M	52.92M
	Net Debt
-31.12M	-63.76M	6.23M	-8.86M	4.67M
	Total Liabilities
510.83M	428.52M	55.30M	51.97M	52.92M
	Stockholders Equity
169.56M	141.85M	65.52M	92.90M	111.69M
Cash Flow		Free Cash Flow
51.79M	83.82M	-8.10M	-10.46M	-1.59M
	Operating Cash Flow
52.12M	85.16M	-3.89M	-6.60M	497.00K
	Investing Cash Flow
-75.53M	-24.53M	-7.22M	34.48M	-18.52M
	Financing Cash Flow
-446.00K	83.00K	-642.00K	-15.30M	-7.03M

First Acceptance Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 3.27 is above the 20-day moving average (MA) of 3.22, below the 50-day MA of 3.40, and below the 200-day MA of 3.34, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.18 is Neutral, neither overbought nor oversold. The STOCH value of 60.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$120.94M	5.73	14.08%	―	0.83%	-71.96%
SBFG	72 Outperform	$119.54M	10.81	8.80%	3.28%	7.38%	-3.85%
CFBK	67 Neutral	$153.91M	10.45	8.65%	1.18%	10.13%	-21.30%
UNB	65 Neutral	$128.85M	14.61	13.21%	5.07%	13.23%	-17.70%
Sector *	65 Neutral	$12.93B	9.81	7.84%	78.03%	12.20%	-7.74%
RMBI	60 Neutral	$143.83M	15.69	6.82%	4.34%	13.55%	3.11%
CZWI	54 Neutral	$142.64M	11.28	7.29%	2.52%	-1.01%	-1.81%