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Fidelity National Financial (FNF)
NYSE:FNF
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Fidelity National Financial
(NYSE:FNF)
68Neutral
Positive Factors
Earnings outlook
The positive revision to 2025 was driven by a combination of management's commentary on Title margins and the compounding effects of higher F&G AUM resulting from strong product sales this quarter.
Interest rates
Recent movement in interest rates has raised optimism that mortgage activity could accelerate in the coming months.
Sales growth
F&G results were generally strong, with record AUM on strong sales growth in both their retail and institutional channels.
Negative Factors
Earnings performance
Adjusted EPS for FNF of $1.24 was below consensus of $1.32 and DBe of $1.29 with the miss driven by lower closed title orders.
Order activity
Title open orders were down 7% y/y for June, pointing to slowing activity.
Title volume
FNF posted 2Q24 results that were generally in-line with consistent on a combination of strong growth in FG, and soft volumes in title, but with resilient margins.
Fidelity National Financial (FNF) vs. S&P 500 (SPY)
Market Cap
$17.07B
Dividend Yield3.16%
Average Volume (3M)1.68M
Price to Earnings (P/E)13.3
Beta (1Y)0.75
Revenue Growth16.32%
EPS Growth144.11%
CountryUS
Employees23,533
SectorFinancial
Sector Strength81
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)4.66
Shares Outstanding274,989,700
10 Day Avg. Volume1,885,875
30 Day Avg. Volume1,680,952
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)1.29
Price to Cash Flow (P/CF)2.90
P/FCF Ratio2.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$70.33Price Target Upside12.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Fidelity National Financial Business Overview & Revenue Model
Company DescriptionFidelity National Financial, Inc., together with its subsidiaries, provides various insurance products in the United States. The company operates through Title, F&G, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including trust activities, trustee sales guarantees, recordings and reconveyances, and home warranty insurance. The company also provides technology and transaction services to the real estate and mortgage industries; and mortgage transaction services, including title-related services and facilitation of production and management of mortgage loans. In addition, it offers annuity and life insurance products, such as deferred annuities that include fixed indexed, fixed rate, and immediate annuities, as well as indexed universal life insurance products. Further, the company engages in the real estate brokerage business. Fidelity National Financial, Inc. was founded in 1847 and is headquartered in Jacksonville, Florida.
How the Company Makes MoneyFNF primarily generates revenue through the sale of title insurance policies, which protect lenders and property owners against defects in title that may arise during real estate transactions. Title insurance premiums are the company's largest revenue stream, driven by the volume of real estate transactions and property values. In addition to title insurance, FNF earns revenue from escrow and closing services, collecting fees for managing the transaction process and ensuring all necessary documents and funds are properly handled. The company also benefits from its investments in technology and transaction services, which provide additional revenue streams through partnerships and service offerings aimed at modernizing and securing the real estate transaction process.
Fidelity National Financial Financial Statement Overview
Summary
Fidelity National Financial shows a stable financial position with moderate leverage and decent ROE. However, declining operational margins and negative cash flows highlight challenges in operational efficiency and cash flow management.Income Statement
Fidelity National Financial shows a mixed performance in its income statement. The gross profit margin for 2023 was strong, indicating efficient cost management. However, the revenue growth rate from 2022 to 2023 was modest at around 2.0%. The net profit margin for 2023 was approximately 4.4%, reflecting moderate profitability. The declining EBIT and EBITDA margins from previous years suggest pressure on operational efficiency.55
Neutral
Balance Sheet
The balance sheet presents a stable financial position with a debt-to-equity ratio of 0.62 in 2023, indicating moderate leverage. The company's equity ratio was 8.6%, suggesting a lower proportion of equity in the capital structure. Return on Equity (ROE) for 2023 was approximately 7.5%, which is decent but shows room for improvement. The increasing total assets and stockholders' equity suggest strengthening financial stability.60
Neutral
Cash Flow
Cash flow analysis reveals some concerns, particularly with the operating cash flow turning negative in 2024. The free cash flow growth rate was negative from 2023 to 2024, indicating potential cash management issues. The operating cash flow to net income ratio was negative in 2024, suggesting operational challenges. Despite these issues, previous years showed strong free cash flow to net income ratios.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.83B | 11.79B | 11.56B | 15.64B | 10.78B | Gross Profit |
| 11.83B | 10.23B | 9.84B | 13.71B | 9.02B | EBIT |
| 0.00 | 518.00M | 1.65B | 3.13B | 1.75B | EBITDA |
| 2.58B | 1.46B | 2.34B | 3.84B | 2.17B | Net Income Common Stockholders |
| 1.27B | 517.00M | 1.29B | 2.80B | 1.43B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 51.70B | 26.56B | 37.73B | 36.36B | 30.80B | Total Assets |
| 95.37B | 80.61B | 57.11B | 60.69B | 50.45B | Total Debt |
| 4.32B | 4.28B | 3.66B | 3.51B | 3.08B | Net Debt |
| 842.00M | 1.78B | 1.61B | -370.00M | 627.00M | Total Liabilities |
| 86.84B | 73.15B | 59.61B | 51.23B | 42.06B | Stockholders Equity |
| 7.75B | 6.91B | -2.86B | 9.41B | 8.35B |
| Cash Flow | Free Cash Flow | |||
| -60.00M | 6.35B | 4.22B | 3.96B | 1.47B | Operating Cash Flow |
| -60.00M | 6.48B | 4.36B | 4.09B | 1.58B | Investing Cash Flow |
| 39.00M | -9.09B | -10.52B | -7.45B | -2.33B | Financing Cash Flow |
| 158.00M | 3.09B | 4.09B | 5.00B | 2.10B |
Fidelity National Financial Technical Analysis
Positive
62.44
Price Trends
61.40
Positive
59.73
Positive
58.09
Positive
Market Momentum
-0.35
Positive
51.18
Neutral
51.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FNF, the sentiment is Positive. The current price of 62.44 is below the 20-day moving average (MA) of 63.01, above the 50-day MA of 61.40, and above the 200-day MA of 58.09, indicating a neutral trend. The MACD of -0.35 indicates Positive momentum. The RSI at 51.18 is Neutral, neither overbought nor oversold. The STOCH value of 51.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FNF.
Fidelity National Financial Risk Analysis
Fidelity National Financial disclosed 9 risk factors in its most recent earnings report. Fidelity National Financial reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fidelity National Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.76B | 8.15 | 13.63% | 2.06% | 11.88% | 5.54% | |
78 Outperform | $19.49B | 103.88 | 15.88% | 0.61% | 20.95% | 48.72% | |
77 Outperform | $9.92B | 13.49 | 15.33% | 1.56% | 6.70% | 21.03% | |
77 Outperform | $5.89B | 8.41 | 14.90% | 2.08% | 4.56% | 15.94% | |
68 Neutral | $17.07B | 13.34 | 17.32% | 3.16% | 16.32% | 144.11% | |
68 Neutral | $6.29B | 48.50 | 2.69% | 3.53% | -2.03% | -39.52% | |
63 Neutral | $12.75B | 9.36 | 8.64% | 84.32% | 13.82% | -3.89% |
* Financial Sector Average
Performance Comparison
FNF
Fidelity National Financial
62.44
16.90
37.11%
AIZ
Assurant
193.80
25.27
14.99%
FAF
First American Financial
60.76
7.51
14.10%
MTG
MGIC Investment
24.29
5.21
27.31%
ESNT
Essent Group
55.73
4.10
7.94%
RYAN
Ryan Specialty Group
73.09
23.71
48.02%
Fidelity National Financial Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 9.31% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in both the title and F and G segments, with significant revenue and earnings growth despite challenges such as high mortgage rates and a constrained refinance market. The strategic investments and operational efficiency have led to improved margins, and the company remains optimistic about future growth prospects.Highlights
Strong Title Segment Performance
Adjusted pre-tax title earnings of $343 million and a 16.6% margin for Q4. Full year 2024 adjusted pre-tax title earnings of $1.2 billion with a 15.1% margin, despite a low transaction environment.
Commercial Revenue Growth
Direct commercial revenue at near record levels for Q4 and December, with $1.2 billion for the full year, marking the third best year on record for commercial volumes.
F and G Segment Contribution
F and G contributed 38% of FNF's consolidated adjusted net earnings for the full year 2024, with assets under management growing to a record $65.3 billion.
Revenue and Earnings Increase
Total revenue excluding gains and losses was $13.6 billion in 2024, a 14% increase over 2023, with adjusted net earnings of $1.3 billion, a 31% increase over the prior year.
Improved Margins and Efficiency
Margins have expanded by 140 basis points over 2023, driven by operational efficiency and investment in technology such as the SoftPro integrated operating platform.
Lowlights
Impact of High Mortgage Rates
Mortgage rates persisting around 7%, with the National Association of Realtors reporting 2024 home sales at the lowest level since 1995 due to high rates and housing shortage.
Challenges in the Refinance Market
Refinance volumes remain a fraction of early 2021 levels, with average refinance orders opened at 1,200 per day in 2024, impacted by fluctuating mortgage rates.
Title Claims Paid Exceed Provision
Title claims paid amounted to $75 million, which was $11 million higher than the provision of $64 million for Q4.
Company Guidance
In the Fidelity National Financial earnings call for the fourth quarter and full year 2024, the company provided robust guidance, highlighting significant achievements and future expectations. The title segment reported adjusted pre-tax earnings of $343 million with a margin of 16.6% for Q4, and $1.2 billion with a 15.1% margin for the full year, despite a low transaction environment. Daily purchase open orders rose 6% over Q4 2023, while refinance orders opened averaged 1,300 per day in Q4, showing resilience amidst fluctuating mortgage rates. Commercial volumes ended strong with direct commercial revenue of $1.2 billion for the year. Looking forward to 2025, the company anticipates continued strength in industrial, multifamily, and energy sectors and potential growth in the office sector. F and G achieved record assets under management of $65.3 billion and contributed 38% to FNF's consolidated adjusted net earnings. The company remains optimistic about long-term growth prospects and plans to resume share buybacks while continuing to invest in technology and operational efficiencies.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.