FIRST AMERICAN FINANCIAL (FAF) Fundamental Analysis & Valuation
NYSE:FAF • US31847R1023
Current stock price
59.58 USD
+1.11 (+1.9%)
At close:
59.58 USD
0 (0%)
After Hours:
This FAF fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. FAF Profitability Analysis
1.1 Basic Checks
- FAF had positive earnings in the past year.
- In the past year FAF had a positive cash flow from operations.
- Each year in the past 5 years FAF has been profitable.
- Each year in the past 5 years FAF had a positive operating cash flow.
1.2 Ratios
- FAF has a Return On Assets of 3.83%. This is in the better half of the industry: FAF outperforms 70.75% of its industry peers.
- With a Return On Equity value of 11.31%, FAF perfoms like the industry average, outperforming 55.78% of the companies in the same industry.
- The Return On Invested Capital of FAF (5.23%) is better than 75.51% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for FAF is significantly below the industry average of 9.36%.
- The 3 year average ROIC (3.16%) for FAF is below the current ROIC(5.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.83% | ||
| ROE | 11.31% | ||
| ROIC | 5.23% |
ROA(3y)2%
ROA(5y)3.06%
ROE(3y)6.15%
ROE(5y)9.12%
ROIC(3y)3.16%
ROIC(5y)4.27%
1.3 Margins
- FAF has a Profit Margin (8.34%) which is in line with its industry peers.
- FAF's Profit Margin has declined in the last couple of years.
- FAF has a Operating Margin (13.49%) which is in line with its industry peers.
- FAF's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.49% | ||
| PM (TTM) | 8.34% | ||
| GM | N/A |
OM growth 3Y12.4%
OM growth 5Y-2%
PM growth 3Y35.97%
PM growth 5Y-3.22%
GM growth 3YN/A
GM growth 5YN/A
2. FAF Health Analysis
2.1 Basic Checks
- FAF has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- FAF has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, FAF has less shares outstanding
- Compared to 1 year ago, FAF has a worse debt to assets ratio.
2.2 Solvency
- FAF has a debt to FCF ratio of 3.22. This is a good value and a sign of high solvency as FAF would need 3.22 years to pay back of all of its debts.
- FAF has a Debt to FCF ratio of 3.22. This is comparable to the rest of the industry: FAF outperforms 42.18% of its industry peers.
- FAF has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
- FAF has a worse Debt to Equity ratio (0.45) than 65.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 3.22 | ||
| Altman-Z | N/A |
ROIC/WACC0.66
WACC7.98%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. FAF Growth Analysis
3.1 Past
- FAF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 37.41%, which is quite impressive.
- FAF shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.85% yearly.
- The Revenue has grown by 21.57% in the past year. This is a very strong growth!
- The Revenue has been growing slightly by 1.01% on average over the past years.
EPS 1Y (TTM)37.41%
EPS 3Y-0.27%
EPS 5Y1.85%
EPS Q2Q%47.41%
Revenue 1Y (TTM)21.57%
Revenue growth 3Y-2.02%
Revenue growth 5Y1.01%
Sales Q2Q%18.44%
3.2 Future
- Based on estimates for the next years, FAF will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.60% on average per year.
- The Revenue is expected to grow by 6.27% on average over the next years.
EPS Next Y6.92%
EPS Next 2Y7.95%
EPS Next 3Y8.6%
EPS Next 5YN/A
Revenue Next Year10.4%
Revenue Next 2Y7.91%
Revenue Next 3Y6.27%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. FAF Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 9.83, the valuation of FAF can be described as reasonable.
- FAF's Price/Earnings is on the same level as the industry average.
- FAF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.75.
- The Price/Forward Earnings ratio is 9.20, which indicates a very decent valuation of FAF.
- The rest of the industry has a similar Price/Forward Earnings ratio as FAF.
- Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, FAF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.83 | ||
| Fwd PE | 9.2 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, FAF is valued a bit cheaper than 70.07% of the companies in the same industry.
- FAF's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.96 | ||
| EV/EBITDA | 5.75 |
4.3 Compensation for Growth
- FAF's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.42
PEG (5Y)5.32
EPS Next 2Y7.95%
EPS Next 3Y8.6%
5. FAF Dividend Analysis
5.1 Amount
- FAF has a Yearly Dividend Yield of 3.70%.
- FAF's Dividend Yield is a higher than the industry average which is at 2.50.
- FAF's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.7% |
5.2 History
- The dividend of FAF has a limited annual growth rate of 3.98%.
- FAF has been paying a dividend for at least 10 years, so it has a reliable track record.
- FAF has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.98%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
- FAF pays out 35.86% of its income as dividend. This is a sustainable payout ratio.
- FAF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP35.86%
EPS Next 2Y7.95%
EPS Next 3Y8.6%
FAF Fundamentals: All Metrics, Ratios and Statistics
59.58
+1.11 (+1.9%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)02-11 2026-02-11/amc
Earnings (Next)04-22 2026-04-22
Inst Owners96.15%
Inst Owner Change9.4%
Ins Owners0.93%
Ins Owner Change7.42%
Market Cap6.07B
Revenue(TTM)7.45B
Net Income(TTM)621.80M
Analysts75.56
Price Target83.23 (39.69%)
Short Float %3.93%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.7% |
Yearly Dividend2.18
Dividend Growth(5Y)3.98%
DP35.86%
Div Incr Years14
Div Non Decr Years14
Ex-Date03-09 2026-03-09 (0.55)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.64%
Min EPS beat(2)15.88%
Max EPS beat(2)37.4%
EPS beat(4)4
Avg EPS beat(4)21.63%
Min EPS beat(4)11.22%
Max EPS beat(4)37.4%
EPS beat(8)7
Avg EPS beat(8)13.58%
EPS beat(12)9
Avg EPS beat(12)8.42%
EPS beat(16)12
Avg EPS beat(16)7.68%
Revenue beat(2)2
Avg Revenue beat(2)7.01%
Min Revenue beat(2)5.09%
Max Revenue beat(2)8.92%
Revenue beat(4)4
Avg Revenue beat(4)5.07%
Min Revenue beat(4)2.41%
Max Revenue beat(4)8.92%
Revenue beat(8)5
Avg Revenue beat(8)1.91%
Revenue beat(12)7
Avg Revenue beat(12)1.4%
Revenue beat(16)8
Avg Revenue beat(16)0.74%
PT rev (1m)2.77%
PT rev (3m)5.7%
EPS NQ rev (1m)0.19%
EPS NQ rev (3m)-10.02%
EPS NY rev (1m)6.17%
EPS NY rev (3m)5.13%
Revenue NQ rev (1m)-0.38%
Revenue NQ rev (3m)2.83%
Revenue NY rev (1m)1.61%
Revenue NY rev (3m)2.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.83 | ||
| Fwd PE | 9.2 | ||
| P/S | 0.81 | ||
| P/FCF | 7.96 | ||
| P/OCF | 6.39 | ||
| P/B | 1.1 | ||
| P/tB | 1.7 | ||
| EV/EBITDA | 5.75 |
EPS(TTM)6.06
EY10.17%
EPS(NY)6.48
Fwd EY10.87%
FCF(TTM)7.48
FCFY12.56%
OCF(TTM)9.33
OCFY15.66%
SpS73.13
BVpS53.97
TBVpS35.13
PEG (NY)1.42
PEG (5Y)5.32
Graham Number85.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.83% | ||
| ROE | 11.31% | ||
| ROCE | 6.72% | ||
| ROIC | 5.23% | ||
| ROICexc | 5.77% | ||
| ROICexgc | 7.45% | ||
| OM | 13.49% | ||
| PM (TTM) | 8.34% | ||
| GM | N/A | ||
| FCFM | 10.23% |
ROA(3y)2%
ROA(5y)3.06%
ROE(3y)6.15%
ROE(5y)9.12%
ROIC(3y)3.16%
ROIC(5y)4.27%
ROICexc(3y)3.66%
ROICexc(5y)4.78%
ROICexgc(3y)4.73%
ROICexgc(5y)6.1%
ROCE(3y)4.05%
ROCE(5y)5.48%
ROICexgc growth 3Y6.59%
ROICexgc growth 5Y-6.56%
ROICexc growth 3Y7.18%
ROICexc growth 5Y-6.3%
OM growth 3Y12.4%
OM growth 5Y-2%
PM growth 3Y35.97%
PM growth 5Y-3.22%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 3.22 | ||
| Debt/EBITDA | 2.01 | ||
| Cap/Depr | 87.1% | ||
| Cap/Sales | 2.53% | ||
| Interest Coverage | 6.62 | ||
| Cash Conversion | 77.86% | ||
| Profit Quality | 122.63% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC7.98%
ROIC/WACC0.66
Cap/Depr(3y)110.7%
Cap/Depr(5y)117.94%
Cap/Sales(3y)3.49%
Cap/Sales(5y)3.11%
Profit Quality(3y)227.55%
Profit Quality(5y)193.14%
High Growth Momentum
Growth
EPS 1Y (TTM)37.41%
EPS 3Y-0.27%
EPS 5Y1.85%
EPS Q2Q%47.41%
EPS Next Y6.92%
EPS Next 2Y7.95%
EPS Next 3Y8.6%
EPS Next 5YN/A
Revenue 1Y (TTM)21.57%
Revenue growth 3Y-2.02%
Revenue growth 5Y1.01%
Sales Q2Q%18.44%
Revenue Next Year10.4%
Revenue Next 2Y7.91%
Revenue Next 3Y6.27%
Revenue Next 5YN/A
EBIT growth 1Y184.86%
EBIT growth 3Y10.13%
EBIT growth 5Y-1.01%
EBIT Next Year35.83%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y12.26%
FCF growth 3Y13.61%
FCF growth 5Y-4.71%
OCF growth 1Y5.94%
OCF growth 3Y6.82%
OCF growth 5Y-2.6%
FIRST AMERICAN FINANCIAL / FAF Fundamental Analysis FAQ
What is the fundamental rating for FAF stock?
ChartMill assigns a fundamental rating of 4 / 10 to FAF.
What is the valuation status of FIRST AMERICAN FINANCIAL (FAF) stock?
ChartMill assigns a valuation rating of 5 / 10 to FIRST AMERICAN FINANCIAL (FAF). This can be considered as Fairly Valued.
Can you provide the profitability details for FIRST AMERICAN FINANCIAL?
FIRST AMERICAN FINANCIAL (FAF) has a profitability rating of 4 / 10.
Can you provide the expected EPS growth for FAF stock?
The Earnings per Share (EPS) of FIRST AMERICAN FINANCIAL (FAF) is expected to grow by 6.92% in the next year.
Can you provide the dividend sustainability for FAF stock?
The dividend rating of FIRST AMERICAN FINANCIAL (FAF) is 8 / 10 and the dividend payout ratio is 35.86%.