First National Financial (FN) AI Stock Analysis

• Market Cap: C$2.89B
• Dividend Yield: 6.8%
• Average Volume (3M): 108.80K
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.76
• Revenue Growth: 13.53%
• EPS Growth: -19.41%
• Country: CA
• Employees: 1,773
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Mortgages
• EPS (TTM): 1.04
• Shares Outstanding: 59,967,430
• 10 Day Avg. Volume: 55,817
• 30 Day Avg. Volume: 108,802
• PEG Ratio: -0.60
• Price to Book (P/B): 3.28
• Price to Sales (P/S): 1.03
• P/FCF Ratio: -3.15
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$48.00
• Price Target Upside: -0.46% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 60 Neutral
• Price Target: C$51.00 ▲(5.77% Upside)

First National Financial's overall score is driven by strong corporate events, including a strategic acquisition and consistent dividends. However, financial performance concerns, particularly high leverage and cash flow issues, weigh on the score. Technical indicators suggest potential overvaluation, while valuation metrics remain attractive.

Positive Factors

Earnings Growth

FN appears on track to resume earnings growth underpinned by more accommodative monetary policies and improving housing market transaction activity.

Single-Family Market Outlook

Single-family outlook remains constructive with FN guiding for increased year-over-year origination in the next two quarters.

Negative Factors

Acquisition Concerns

Downgrading To Sell on Proposed Torex Acquisition.

Consumer Yield Compression

Consumer Yield Compression Expected to Weigh on Q2/25.

Tariff and Trade Uncertainty

Tariff uncertainty may affect Canada negatively and could have an unfavorable impact to the Company, particularly if employment is affected.

First National Financial Business Overview & Revenue Model

Company Description

First National Financial (FN) is a leading Canadian financial services company that operates primarily in the mortgage and real estate finance sectors. As one of the largest non-bank mortgage lenders in Canada, FN provides a range of financial products and services, including residential and commercial mortgages, mortgage underwriting, and investment options. The company is known for its focus on innovation and customer service, catering to a diverse clientele through its various subsidiaries and partnerships.

How the Company Makes Money

First National Financial generates revenue primarily through the origination and management of mortgage loans. The company earns income from interest on these loans, as well as through fees associated with the mortgage origination process, including application fees and servicing fees. Additionally, FN earns revenue from mortgage-backed securities (MBS) that it creates by pooling mortgages and selling them to investors. Significant partnerships with mortgage brokers and financial institutions also contribute to its earnings, as these relationships help expand FN's reach and increase loan origination volumes. Furthermore, FN may derive income from ancillary services related to real estate transactions, such as property insurance and appraisal services.

First National Financial Financial Statement Overview

Summary

First National Financial is facing challenges with declining revenue, high leverage, and negative cash flow. Despite a strong net profit margin, the company struggles with cost management and cash conversion, and its high debt-to-equity ratio poses a significant risk.

Income Statement

The company's income statement shows mixed results. While there's a noticeable decline in total revenue from $751.4 million in 2023 to $587.6 million in 2024, the net profit margin remains relatively strong at 34.6% for 2024. However, the gross profit margin is misleading as it equates to total revenue, suggesting all revenue is considered as gross profit without accounting for costs. This highlights potential issues with cost management or reporting. Additionally, EBIT and EBITDA are not reported for 2024, which limits the assessment of operating performance.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 61.5, indicating significant leverage, which is typical for the banking industry but still poses potential risk if not managed carefully. The equity ratio is low at 1.4%, suggesting limited equity buffer against liabilities. Despite these concerns, the consistency in stockholders' equity over the years provides some stability. However, the high level of total liabilities compared to equity is a notable risk factor.

Cash Flow

Cash flow analysis indicates challenges with negative operating cash flow of -$763.7 million and free cash flow of -$768.1 million for 2024, reflecting potential liquidity issues. The free cash flow to net income ratio is negative, suggesting that the company's earnings are not translating into cash flow. This raises concerns about the sustainability of operations without external financing. The operating cash flow to net income ratio is also negative, further highlighting cash generation issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.37B	2.35B	751.40M	698.99M	513.63M	459.87M
Gross Profit	581.49M	683.11M	-589.24M	-290.85M	-391.21M	-464.95M
EBITDA	395.87M	453.28M	511.47M	0.00	321.91M	319.63M
Net Income	187.35M	203.39M	252.81M	197.73M	194.56M	190.23M
Balance Sheet
Total Assets	54.40B	51.16B	45.96B	43.76B	42.27B	39.49B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.03B	702.40M	-51.17M	-52.87M	-22.92M
Total Debt	49.98B	45.40B	40.61B	38.40B	36.99B	35.37B
Total Liabilities	53.65B	50.42B	45.22B	38.35B	37.12B	38.92B
Stockholders Equity	746.54M	738.21M	737.76M	698.98M	577.41M	570.80M
Cash Flow
Free Cash Flow	288.03M	-768.10M	-109.71M	496.78M	-434.85M	-254.54M
Operating Cash Flow	289.68M	-763.72M	-103.51M	509.16M	-402.89M	-250.96M
Investing Cash Flow	5.74M	105.40M	-77.45M	-52.87M	-12.74M	145.83M
Financing Cash Flow	-178.75M	663.69M	163.82M	-556.73M	133.05M	220.05M

First National Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FN, the sentiment is Positive. The current price of 48.22 is above the 20-day moving average (MA) of 48.01, above the 50-day MA of 44.64, and above the 200-day MA of 40.22, indicating a bullish trend. The MACD of 0.95 indicates Positive momentum. The RSI at 80.68 is Negative, neither overbought nor oversold. The STOCH value of 7.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FN.

First National Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MKP	73 Outperform	C$868.74M	11.88	11.84%	7.30%	12.10%	-18.24%
TF	70 Neutral	C$640.51M	14.73	6.30%	8.91%	-10.69%	-28.58%
Sector *	68 Neutral	$17.89B	11.95	10.28%	3.72%	9.74%	1.61%
AI	68 Neutral	C$552.47M	10.95	9.72%	7.96%	-11.04%	0.44%
FC	67 Neutral	C$442.31M	11.64	9.14%	8.48%	-0.92%	4.84%
FN	60 Neutral	C$2.89B	15.74	24.57%	6.80%	13.53%	-19.41%
DLCG	52 Neutral	C$697.35M	37.65	-143.13%	1.46%	35.22%	-1246.65%

First National Financial Corporate Events

First National Financial Announces August Dividend Payment

First National Financial Corporation has declared its monthly dividend payment of $0.208334 per common share for August 2025, payable on September 15, 2025, to shareholders recorded by August 29, 2025. This announcement underscores First National’s ongoing commitment to providing returns to its shareholders and highlights its stable position in the Canadian mortgage industry, where it is a leading non-bank mortgage originator and underwriter.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$45.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.

First National Financial Reports Strong Q2 2025 Results with Record Mortgage Volumes

First National Financial Corporation reported a strong second quarter for 2025, with an 8% increase in Mortgages Under Administration (MUA) to a record $159.9 billion and a 15% rise in revenue to $621.3 million. The company achieved record origination volumes, particularly in its single-family residential business, and saw its commercial segment surpass $5 billion in volumes. Despite challenges such as the ongoing trade dispute with the U.S., First National remains committed to growth, supported by investments in technology and a robust pipeline of new mortgage commitments.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$45.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.

First National Financial to be Acquired by Birch Hill and Brookfield

First National Financial Corporation has announced its acquisition by Birch Hill Equity Partners and Brookfield Asset Management through Regal Bidco Inc., with existing shareholders Stephen Smith and Moray Tawse maintaining a minority ownership. The transaction, valued at approximately $2.9 billion, offers a 15.2% to 22.8% premium on recent trading prices and is expected to close in the fourth quarter of 2025. This acquisition is seen as a strategic move to leverage Birch Hill and Brookfield’s expertise in the financial services industry, aiming to enhance First National’s growth and innovation capabilities.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$45.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.

First National Financial Announces July Dividend Payment

First National Financial Corporation has declared a monthly dividend payment of $0.208334 per common share for July 2025, payable on August 15, 2025, to shareholders of record as of July 31, 2025. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders and highlights its stable financial position as one of the leading non-bank mortgage originators and underwriters in Canada.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.

First National Financial Corporation Announces Q2 2025 Earnings Schedule

First National Financial Corporation has announced its schedule for the second quarter 2025 financial reporting, with the earnings release set for July 29, 2025, and an earnings call scheduled for July 30, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and future outlook, potentially impacting its market positioning and investor relations.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.

First National Financial Announces June 2025 Dividend Details

First National Financial Corporation announced its June 2025 dividend payments for common shares and Class A Series 1 and 2 Preference Shares. The dividends, payable on July 15, 2025, reflect the company’s ongoing commitment to shareholder returns. The announcement includes a set dividend rate for Series 2 Preference Shares for the upcoming quarter, indicating stable financial operations and potentially positive implications for investors.

The most recent analyst rating on (TSE:FN) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on First National Financial stock, see the TSE:FN Stock Forecast page.