First Acceptance (FACO) AI Stock Analysis

• Market Cap: $155.66M
• Dividend Yield: N/A
• Average Volume (3M): 9.82K
• Price to Earnings (P/E): 5.3
• Beta (1Y): 0.20
• 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: 7,392
• 30 Day Avg. Volume: 9,824
• 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: 0.91
• Enterprise Value/Revenue: 0.27
• Enterprise Value/Gross Profit: 0.98
• Enterprise Value/Ebitda: 3.46
• 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)

The score is driven by improving financial health (return to profitability, stronger cash flow, and better leverage) and supportive technical trend signals. A low P/E further boosts the rating, while historical volatility in margins/returns and cash flow consistency keeps 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 clear turnaround from 2021–2022 losses and cash burn to positive profitability and strong TTM free cash flow, alongside improved leverage (lower debt-to-equity) and rising equity. The main constraint is volatility: margins, ROE, and cash flow trends have swung materially year-to-year, reducing confidence in stability.

Income Statement

Profitability has improved materially versus the 2021–2022 loss years, with TTM (Trailing-Twelve-Months) posting positive operating and net margins (about 7.5% and 5.5%, respectively). Revenue growth in TTM (Trailing-Twelve-Months) is very strong (over 200%), but results look volatile across years (2023 margins were unusually high, 2024/TTM are lower). Gross margin also swings sharply between periods (notably low in 2024 vs. higher in TTM), suggesting either business-mix changes or reporting noise—overall pointing to improving, but not yet consistently stable, earnings quality.

Balance Sheet

Leverage looks manageable, with debt-to-equity improving from elevated levels in 2022 (~0.84) to a much lower level in TTM (Trailing-Twelve-Months) (~0.24), alongside steadily rising equity. Returns on equity are solid in 2024 and TTM (Trailing-Twelve-Months) (mid-teens), indicating decent profitability relative to capital. The key risk is historical instability (negative ROE in 2021–2022 and an exceptionally high ROE in 2023), which suggests earnings can swing and should be monitored despite the currently healthier capital structure.

Cash Flow

Cash generation is currently healthy: TTM (Trailing-Twelve-Months) free cash flow is strong and closely tracks net income (free cash flow roughly equal to earnings), which supports earnings quality. However, cash flow has been inconsistent over the cycle (negative operating and free cash flow in 2021–2022 and a decline in free cash flow growth in 2024), indicating sensitivity to underwriting/working-capital or operating conditions. One coverage metric appears inconsistent in TTM (Trailing-Twelve-Months) (shown as 0.0 despite positive cash flow), so the overall read relies more on the clear positive cash flow levels than that specific ratio.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	533.66M	559.43M	487.54M	302.30M	285.25M	269.58M
Gross Profit	144.49M	40.53M	33.48M	-15.11M	2.05M	19.30M
EBITDA	41.07M	38.61M	105.40M	-16.32M	999.00K	18.23M
Net Income	29.20M	26.29M	73.91M	-17.49M	-1.23M	10.42M
Balance Sheet
Total Assets	691.72M	680.39M	570.37M	355.94M	322.65M	340.95M
Cash, Cash Equivalents and Short-Term Investments	0.00	173.08M	302.67M	162.40M	180.49M	195.19M
Total Debt	45.72M	45.40M	46.02M	55.30M	51.97M	52.92M
Total Liabilities	501.93M	510.83M	428.52M	55.30M	51.97M	52.92M
Stockholders Equity	189.80M	169.56M	141.85M	65.52M	92.90M	111.69M
Cash Flow
Free Cash Flow	35.09M	51.79M	83.82M	-8.10M	-10.46M	-1.59M
Operating Cash Flow	35.71M	52.12M	85.16M	-3.89M	-6.60M	497.00K
Investing Cash Flow	-45.62M	-75.53M	-24.53M	-7.22M	34.48M	-18.52M
Financing Cash Flow	-6.31M	-446.00K	83.00K	-642.00K	-15.30M	-7.03M

First Acceptance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 above the 20-day moving average (MA) of 4.11, above the 50-day MA of 3.98, and above the 200-day MA of 3.56, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 50.64 is Neutral, neither overbought nor oversold. The STOCH value of 39.71 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	$155.66M	5.32	16.45%	―	-7.26%	-62.71%
EIG	69 Neutral	$1.02B	17.66	5.86%	2.94%	1.69%	-52.43%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HIPO	63 Neutral	$754.23M	8.07	25.65%	―	34.48%	―
JRVR	60 Neutral	$319.46M	-3.34	-6.97%	0.63%	-19.08%	56.21%
MBI	45 Neutral	$326.69M	-1.81	―	―	―	67.72%