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FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis

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

64.58  -0.3 (-0.46%)

Fundamental Rating

4

Overall FAF gets a fundamental rating of 4 out of 10. We evaluated FAF against 141 industry peers in the Insurance industry. FAF may be in some trouble as it scores bad on both profitability and health. FAF is not valued too expensively and it also shows a decent 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.
FAF had a positive operating cash flow in the past year.
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.
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

Looking at the Return On Assets, with a value of 1.16%, FAF is in line with its industry, outperforming 45.39% of the companies in the same industry.
FAF has a worse Return On Equity (3.68%) than 75.89% of its industry peers.
FAF has a Return On Invested Capital (2.15%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FAF is in line with the industry average of 4.08%.
Industry RankSector Rank
ROA 1.16%
ROE 3.68%
ROIC 2.15%
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

FAF's Profit Margin of 2.90% is on the low side compared to the rest of the industry. FAF is outperformed by 73.05% of its industry peers.
In the last couple of years the Profit Margin of FAF has declined.
With a Operating Margin value of 6.27%, FAF is not doing good in the industry: 70.21% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of FAF has declined.
Industry RankSector Rank
OM 6.27%
PM (TTM) 2.9%
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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2

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FAF is destroying value.
Compared to 1 year ago, FAF has about the same amount of shares outstanding.
Compared to 5 years ago, FAF has less shares outstanding
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

FAF has a debt to FCF ratio of 3.65. This is a good value and a sign of high solvency as FAF would need 3.65 years to pay back of all of its debts.
FAF's Debt to FCF ratio of 3.65 is in line compared to the rest of the industry. FAF outperforms 42.55% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that FAF is not too dependend on debt financing.
The Debt to Equity ratio of FAF (0.47) is worse than 62.41% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.47
Debt/FCF 3.65
Altman-Z N/A
ROIC/WACC0.26
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 39.39%, which is quite impressive.
The Earnings Per Share has been decreasing by -5.20% on average over the past years.
The Revenue has been growing slightly by 7.07% in the past year.
FAF shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.24% yearly.
EPS 1Y (TTM)39.39%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%20.47%
Revenue 1Y (TTM)7.07%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%14.2%

3.2 Future

The Earnings Per Share is expected to grow by 16.44% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.90% on average over the next years. This is quite good.
EPS Next Y15.38%
EPS Next 2Y17.91%
EPS Next 3Y16.44%
EPS Next 5YN/A
Revenue Next Year17.53%
Revenue Next 2Y13.29%
Revenue Next 3Y9.9%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
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

Based on the Price/Earnings ratio of 12.76, the valuation of FAF can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of FAF is on the same level as its industry peers.
FAF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.85.
With a Price/Forward Earnings ratio of 10.53, the valuation of FAF can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FAF is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 34.98. FAF is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 12.76
Fwd PE 10.53
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

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FAF is on the same level as its industry peers.
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 9.86
EV/EBITDA 11.31
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)0.83
PEG (5Y)N/A
EPS Next 2Y17.91%
EPS Next 3Y16.44%

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6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.28%, FAF has a reasonable but not impressive dividend return.
FAF's Dividend Yield is a higher than the industry average which is at 3.59.
FAF's Dividend Yield is a higher than the S&P500 average which is at 2.36.
Industry RankSector Rank
Dividend Yield 3.28%

5.2 History

The dividend of FAF has a limited annual growth rate of 4.86%.
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)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

117.70% of the earnings are spent on dividend by FAF. This is not a sustainable payout ratio.
FAF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP117.7%
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 (8/20/2025, 2:27:30 PM)

64.58

-0.3 (-0.46%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)07-23 2025-07-23/amc
Earnings (Next)10-22 2025-10-22/amc
Inst Owners90.63%
Inst Owner Change1.66%
Ins Owners0.87%
Ins Owner Change1.21%
Market Cap6.57B
Analysts75.56
Price Target78.54 (21.62%)
Short Float %2.27%
Short Ratio1.83
Dividend
Industry RankSector Rank
Dividend Yield 3.28%
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP117.7%
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)16.61%
Min EPS beat(2)11.22%
Max EPS beat(2)22.01%
EPS beat(4)4
Avg EPS beat(4)17.92%
Min EPS beat(4)11.22%
Max EPS beat(4)22.01%
EPS beat(8)6
Avg EPS beat(8)5.89%
EPS beat(12)9
Avg EPS beat(12)4.53%
EPS beat(16)12
Avg EPS beat(16)6.93%
Revenue beat(2)2
Avg Revenue beat(2)3.13%
Min Revenue beat(2)2.41%
Max Revenue beat(2)3.85%
Revenue beat(4)3
Avg Revenue beat(4)1.1%
Min Revenue beat(4)-5.45%
Max Revenue beat(4)3.85%
Revenue beat(8)4
Avg Revenue beat(8)-0.14%
Revenue beat(12)5
Avg Revenue beat(12)-0.74%
Revenue beat(16)8
Avg Revenue beat(16)2.17%
PT rev (1m)0%
PT rev (3m)-0.26%
EPS NQ rev (1m)3.08%
EPS NQ rev (3m)-1.47%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.92%
Revenue NQ rev (1m)0.8%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)0.99%
Revenue NY rev (3m)1.14%
Valuation
Industry RankSector Rank
PE 12.76
Fwd PE 10.53
P/S 1.01
P/FCF 9.86
P/OCF 7.55
P/B 1.28
P/tB 2.06
EV/EBITDA 11.31
EPS(TTM)5.06
EY7.84%
EPS(NY)6.13
Fwd EY9.49%
FCF(TTM)6.55
FCFY10.14%
OCF(TTM)8.55
OCFY13.24%
SpS64.01
BVpS50.36
TBVpS31.41
PEG (NY)0.83
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 1.16%
ROE 3.68%
ROCE 2.71%
ROIC 2.15%
ROICexc 2.49%
ROICexgc 3.24%
OM 6.27%
PM (TTM) 2.9%
GM N/A
FCFM 10.23%
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 Turnover0.4
Health
Industry RankSector Rank
Debt/Equity 0.47
Debt/FCF 3.65
Debt/EBITDA 3.93
Cap/Depr 96.82%
Cap/Sales 3.13%
Interest Coverage 2.83
Cash Conversion 140.61%
Profit Quality 353.21%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score4
WACC8.22%
ROIC/WACC0.26
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)39.39%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%20.47%
EPS Next Y15.38%
EPS Next 2Y17.91%
EPS Next 3Y16.44%
EPS Next 5YN/A
Revenue 1Y (TTM)7.07%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%14.2%
Revenue Next Year17.53%
Revenue Next 2Y13.29%
Revenue Next 3Y9.9%
Revenue Next 5YN/A
EBIT growth 1Y-26.69%
EBIT growth 3Y-39.83%
EBIT growth 5Y-18.36%
EBIT Next Year194.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y49.37%
FCF growth 3Y-13.76%
FCF growth 5Y-3.37%
OCF growth 1Y19.62%
OCF growth 3Y-9.73%
OCF growth 5Y-0.34%