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First Acceptance Corporation (FACO)
OTHER OTC:FACO
US Market

First Acceptance (FACO) AI Stock Analysis

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First Acceptance

(OTC:FACO)

Rating:70Outperform
Price Target:
$3.50
▲(8.70%Upside)
First Acceptance's stock score is primarily driven by its strong financial performance and attractive valuation, suggesting robust potential for future growth. However, technical indicators point to a lack of momentum, which could pose short-term challenges.

First Acceptance (FACO) vs. SPDR S&P 500 ETF (SPY)

First Acceptance Business Overview & Revenue Model

Company DescriptionFirst 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 MoneyFirst Acceptance Corporation generates revenue through the sale of non-standard auto insurance policies. The company's primary revenue stream comes from premiums paid by policyholders for coverage. FACO employs a direct-to-consumer sales strategy, utilizing both online platforms and retail locations to reach customers. Additionally, the company may earn investment income from the reserves held to pay future claims. FACO's revenue model is significantly influenced by its underwriting practices and risk management strategies, which help in determining the pricing and profitability of the insurance policies sold. Partnerships with agents and brokers may also contribute to its distribution network, although the company primarily focuses on direct sales channels.

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
75
Positive
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
68
Positive
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
80
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue559.43M487.54M302.30M285.25M269.58M
Gross Profit559.43M487.54M302.30M285.25M269.58M
EBITDA38.61M105.40M-16.32M999.00K15.86M
Net Income26.29M73.91M-17.49M-1.23M10.42M
Balance Sheet
Total Assets680.39M570.37M355.94M322.65M340.95M
Cash, Cash Equivalents and Short-Term Investments173.08M302.67M162.40M180.49M195.19M
Total Debt45.40M46.02M55.30M51.97M52.92M
Total Liabilities510.83M428.52M55.30M51.97M52.92M
Stockholders Equity169.56M141.85M65.52M92.90M111.69M
Cash Flow
Free Cash Flow51.79M83.82M-8.10M-10.46M-1.59M
Operating Cash Flow52.12M85.16M-3.89M-6.60M497.00K
Investing Cash Flow-75.53M-24.53M-7.22M34.48M-18.52M
Financing Cash Flow-446.00K83.00K-642.00K-15.30M-7.03M

First Acceptance Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price3.22
Price Trends
50DMA
3.31
Negative
100DMA
3.38
Negative
200DMA
3.32
Negative
Market Momentum
MACD
-0.02
Negative
RSI
48.68
Neutral
STOCH
46.26
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 3.22 is above the 20-day moving average (MA) of 3.21, below the 50-day MA of 3.31, and below the 200-day MA of 3.32, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 48.68 is Neutral, neither overbought nor oversold. The STOCH value of 46.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FACO.

First Acceptance Risk Analysis

First Acceptance disclosed 20 risk factors in its most recent earnings report. First Acceptance 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 Acceptance Peers Comparison

Overall Rating
UnderperformOutperform
Sector (70)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$155.46M10.568.65%1.17%5.51%-5.63%
73
Outperform
$124.63M11.278.80%3.14%7.28%-3.91%
UNUNB
72
Outperform
$125.49M14.2313.21%5.08%13.60%-17.65%
70
Outperform
$122.08M5.6414.08%0.83%-71.96%
70
Neutral
CHF13.90B16.5411.79%3.68%4.78%20.75%
69
Neutral
$154.73M12.247.29%2.32%-1.15%-1.80%
67
Neutral
$145.60M15.886.82%4.29%13.55%3.11%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FACO
First Acceptance
3.22
-0.75
-18.89%
CFBK
CF Bankshares
24.20
5.39
28.65%
CZWI
Citizens Community Bancorp
14.98
4.15
38.32%
SBFG
SB Financial Group
19.70
6.46
48.79%
UNB
Union Bankshares
28.61
8.26
40.59%
RMBI
Richmond Mutual Bancorporation
13.89
2.83
25.59%
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.Date of analysis: Jun 28, 2025