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FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis

NYSE:FAF - New York Stock Exchange, Inc. - US31847R1023 - Common Stock - Currency: USD

58.14  +1.57 (+2.78%)

After market: 57.57 -0.57 (-0.98%)

Fundamental Rating

3

Overall FAF gets a fundamental rating of 3 out of 10. We evaluated FAF against 145 industry peers in the Insurance industry. Both the profitability and financial health of FAF have multiple concerns. FAF has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

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.
In the past 5 years FAF always reported a positive cash flow from operatings.
FAF Yearly Net Income VS EBIT VS OCF VS FCFFAF Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

1.2 Ratios

FAF has a Return On Assets (1.02%) which is in line with its industry peers.
FAF has a Return On Equity of 3.16%. This is in the lower half of the industry: FAF underperforms 77.24% of its industry peers.
FAF has a Return On Invested Capital (2.08%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for FAF is in line with the industry average of 4.07%.
Industry RankSector Rank
ROA 1.02%
ROE 3.16%
ROIC 2.08%
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
FAF Yearly ROA, ROE, ROICFAF Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15 20

1.3 Margins

With a Profit Margin value of 2.52%, FAF is not doing good in the industry: 73.79% of the companies in the same industry are doing better.
In the last couple of years the Profit Margin of FAF has declined.
FAF has a Operating Margin of 6.06%. This is in the lower half of the industry: FAF underperforms 71.03% of its industry peers.
FAF's Operating Margin has declined in the last couple of years.
Industry RankSector Rank
OM 6.06%
PM (TTM) 2.52%
GM N/A
OM growth 3Y-31.37%
OM growth 5Y-18.17%
PM growth 3Y-46.08%
PM growth 5Y-28.45%
GM growth 3YN/A
GM growth 5YN/A
FAF Yearly Profit, Operating, Gross MarginsFAF Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15

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1

2. Health

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 about the same amout of shares outstanding than it did 1 year ago.
FAF has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, FAF has a worse debt to assets ratio.
FAF Yearly Shares OutstandingFAF Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M 100M
FAF Yearly Total Debt VS Total AssetsFAF Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

2.2 Solvency

The Debt to FCF ratio of FAF is 4.02, which is a neutral value as it means it would take FAF, 4.02 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of FAF (4.02) is worse than 62.07% 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 62.76% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 4.02
Altman-Z N/A
ROIC/WACC0.25
WACC8.22%
FAF Yearly LT Debt VS Equity VS FCFFAF Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B 5B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
FAF Yearly Current Assets VS Current LiabilitesFAF Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M

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5

3. Growth

3.1 Past

FAF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.38%, which is quite impressive.
Measured over the past years, FAF shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.20% on average per year.
Looking at the last year, FAF shows a small growth in Revenue. The Revenue has grown by 2.78% in the last year.
The Revenue has been decreasing by -0.24% on average over the past years.
EPS 1Y (TTM)29.38%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%86.67%
Revenue 1Y (TTM)2.78%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%11.07%

3.2 Future

The Earnings Per Share is expected to grow by 16.44% on average over the next years. This is quite good.
Based on estimates for the next years, FAF will show a quite strong growth in Revenue. The Revenue will grow by 9.52% on average per year.
EPS Next Y15.38%
EPS Next 2Y17.91%
EPS Next 3Y16.44%
EPS Next 5YN/A
Revenue Next Year16.39%
Revenue Next 2Y13.15%
Revenue Next 3Y9.52%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
FAF Yearly Revenue VS EstimatesFAF Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2B 4B 6B 8B
FAF Yearly EPS VS EstimatesFAF Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6 8

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5

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 12.11, which indicates a correct valuation of FAF.
FAF's Price/Earnings ratio is in line with the industry average.
FAF is valuated cheaply when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.48, the valuation of FAF can be described as very reasonable.
FAF's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of FAF to the average of the S&P500 Index (35.19), we can say FAF is valued rather cheaply.
Industry RankSector Rank
PE 12.11
Fwd PE 9.48
FAF Price Earnings VS Forward Price EarningsFAF Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as FAF.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FAF is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 10.55
EV/EBITDA 10.53
FAF Per share dataFAF EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
FAF's earnings are expected to grow with 16.44% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.79
PEG (5Y)N/A
EPS Next 2Y17.91%
EPS Next 3Y16.44%

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6

5. Dividend

5.1 Amount

FAF has a Yearly Dividend Yield of 3.82%. Purely for dividend investing, there may be better candidates out there.
FAF's Dividend Yield is a higher than the industry average which is at 3.76.
FAF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
Industry RankSector Rank
Dividend Yield 3.82%

5.2 History

The dividend of FAF has a limited annual growth rate of 4.86%.
FAF has paid a dividend for at least 10 years, which is 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)4.86%
Div Incr Years14
Div Non Decr Years14
FAF Yearly Dividends per shareFAF Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2

5.3 Sustainability

FAF pays out 139.66% of its income as dividend. This is not a sustainable payout ratio.
FAF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP139.66%
EPS Next 2Y17.91%
EPS Next 3Y16.44%
FAF Yearly Income VS Free CF VS DividendFAF Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B
FAF Dividend Payout.FAF Dividend Payout, showing the Payout Ratio.FAF Dividend Payout.PayoutRetained Earnings

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FIRST AMERICAN FINANCIAL

NYSE:FAF (7/11/2025, 8:08:35 PM)

After market: 57.57 -0.57 (-0.98%)

58.14

+1.57 (+2.78%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)04-23 2025-04-23/amc
Earnings (Next)07-23 2025-07-23/amc
Inst Owners90.04%
Inst Owner Change0%
Ins Owners0.83%
Ins Owner Change-2.87%
Market Cap5.98B
Analysts75.56
Price Target78.54 (35.09%)
Short Float %1.92%
Short Ratio1.92
Dividend
Industry RankSector Rank
Dividend Yield 3.82%
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP139.66%
Div Incr Years14
Div Non Decr Years14
Ex-Date06-09 2025-06-09 (0.54)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)21.95%
Min EPS beat(2)21.9%
Max EPS beat(2)22.01%
EPS beat(4)4
Avg EPS beat(4)17.15%
Min EPS beat(4)8.13%
Max EPS beat(4)22.01%
EPS beat(8)6
Avg EPS beat(8)8.45%
EPS beat(12)9
Avg EPS beat(12)5.26%
EPS beat(16)12
Avg EPS beat(16)7.88%
Revenue beat(2)2
Avg Revenue beat(2)2.99%
Min Revenue beat(2)2.41%
Max Revenue beat(2)3.57%
Revenue beat(4)2
Avg Revenue beat(4)-0.3%
Min Revenue beat(4)-5.45%
Max Revenue beat(4)3.57%
Revenue beat(8)4
Avg Revenue beat(8)0.43%
Revenue beat(12)4
Avg Revenue beat(12)-1.14%
Revenue beat(16)8
Avg Revenue beat(16)3.21%
PT rev (1m)0%
PT rev (3m)1.05%
EPS NQ rev (1m)-1.25%
EPS NQ rev (3m)-4.22%
EPS NY rev (1m)-1.92%
EPS NY rev (3m)-2.05%
Revenue NQ rev (1m)-0.22%
Revenue NQ rev (3m)-1%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-0.56%
Valuation
Industry RankSector Rank
PE 12.11
Fwd PE 9.48
P/S 0.95
P/FCF 10.55
P/OCF 7.72
P/B 1.19
P/tB 1.94
EV/EBITDA 10.53
EPS(TTM)4.8
EY8.26%
EPS(NY)6.13
Fwd EY10.54%
FCF(TTM)5.51
FCFY9.48%
OCF(TTM)7.54
OCFY12.96%
SpS61.1
BVpS48.78
TBVpS30.01
PEG (NY)0.79
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 1.02%
ROE 3.16%
ROCE 2.63%
ROIC 2.08%
ROICexc 2.43%
ROICexgc 3.2%
OM 6.06%
PM (TTM) 2.52%
GM N/A
FCFM 9.02%
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
ROICexc(3y)3.38%
ROICexc(5y)5.29%
ROICexgc(3y)4.41%
ROICexgc(5y)6.78%
ROCE(3y)3.66%
ROCE(5y)5.93%
ROICexcg growth 3Y-35.82%
ROICexcg growth 5Y-22.59%
ROICexc growth 3Y-36.98%
ROICexc growth 5Y-22.98%
OM growth 3Y-31.37%
OM growth 5Y-18.17%
PM growth 3Y-46.08%
PM growth 5Y-28.45%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.41
Health
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 4.02
Debt/EBITDA 3.86
Cap/Depr 99.29%
Cap/Sales 3.31%
Interest Coverage 2.46
Cash Conversion 131.25%
Profit Quality 357.57%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score4
WACC8.22%
ROIC/WACC0.25
Cap/Depr(3y)133.56%
Cap/Depr(5y)115.83%
Cap/Sales(3y)3.74%
Cap/Sales(5y)2.92%
Profit Quality(3y)252.58%
Profit Quality(5y)196.49%
High Growth Momentum
Growth
EPS 1Y (TTM)29.38%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%86.67%
EPS Next Y15.38%
EPS Next 2Y17.91%
EPS Next 3Y16.44%
EPS Next 5YN/A
Revenue 1Y (TTM)2.78%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%11.07%
Revenue Next Year16.39%
Revenue Next 2Y13.15%
Revenue Next 3Y9.52%
Revenue Next 5YN/A
EBIT growth 1Y-32.01%
EBIT growth 3Y-39.83%
EBIT growth 5Y-18.36%
EBIT Next Year194.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y54.27%
FCF growth 3Y-13.76%
FCF growth 5Y-3.37%
OCF growth 1Y19.72%
OCF growth 3Y-9.73%
OCF growth 5Y-0.34%