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FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis

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

62.831  +3.13 (+5.24%)

Fundamental Rating

4

Overall FAF gets a fundamental rating of 4 out of 10. We evaluated FAF against 143 industry peers in the Insurance industry. Both the profitability and financial health of FAF have multiple concerns. 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

In the past year FAF was profitable.
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

FAF's Return On Assets of 0.88% is on the low side compared to the rest of the industry. FAF is outperformed by 63.64% of its industry peers.
The Return On Equity of FAF (2.67%) is worse than 81.12% of its industry peers.
FAF has a Return On Invested Capital (2.04%) 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 4.47%.
Industry RankSector Rank
ROA 0.88%
ROE 2.67%
ROIC 2.04%
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

Looking at the Profit Margin, with a value of 2.14%, FAF is doing worse than 77.62% of the companies in the same industry.
FAF's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 5.76%, FAF is not doing good in the industry: 72.03% of the companies in the same industry are doing better.
FAF's Operating Margin has declined in the last couple of years.
Industry RankSector Rank
OM 5.76%
PM (TTM) 2.14%
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

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.
The debt/assets ratio for FAF is higher compared to a year ago.
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 3.22. 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 40.56% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that FAF is not too dependend on debt financing.
FAF has a Debt to Equity ratio of 0.45. This is in the lower half of the industry: FAF underperforms 61.54% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 3.22
Altman-Z N/A
ROIC/WACC0.25
WACC8.23%
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

The Earnings Per Share has grown by an impressive 29.38% over the past year.
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.
The Revenue has been growing slightly by 2.08% in the past year.
Measured over the past years, FAF shows a decrease in Revenue. The Revenue has been decreasing by -0.24% on average per year.
EPS 1Y (TTM)29.38%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%86.67%
Revenue 1Y (TTM)2.08%
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 15.48% on average over the next years. This is quite good.
FAF is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.87% yearly.
EPS Next Y15.92%
EPS Next 2Y18.87%
EPS Next 3Y15.48%
EPS Next 5YN/A
Revenue Next Year17.04%
Revenue Next 2Y13.56%
Revenue Next 3Y9.87%
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.
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

A Price/Earnings ratio of 13.09 indicates a correct valuation of FAF.
The rest of the industry has a similar Price/Earnings ratio as FAF.
FAF is valuated cheaply when we compare the Price/Earnings ratio to 28.64, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 10.08, the valuation of FAF can be described as reasonable.
Based on the Price/Forward Earnings ratio, FAF is valued a bit cheaper than the industry average as 62.94% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.44, FAF is valued rather cheaply.
Industry RankSector Rank
PE 13.09
Fwd PE 10.08
FAF Price Earnings VS Forward Price EarningsFAF Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

FAF's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as FAF.
Industry RankSector Rank
P/FCF 9.54
EV/EBITDA 11.83
FAF Per share dataFAF EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

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.
A more expensive valuation may be justified as FAF's earnings are expected to grow with 15.48% in the coming years.
PEG (NY)0.82
PEG (5Y)N/A
EPS Next 2Y18.87%
EPS Next 3Y15.48%

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6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 3.70%, FAF has a reasonable but not impressive dividend return.
FAF's Dividend Yield is a higher than the industry average which is at 3.28.
FAF's Dividend Yield is a higher than the S&P500 average which is at 2.52.
Industry RankSector Rank
Dividend Yield 3.7%

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

168.34% of the earnings are spent on dividend by FAF. This is not a sustainable payout ratio.
The dividend of FAF is growing, but earnings are growing more, so the dividend growth is sustainable.
DP168.34%
EPS Next 2Y18.87%
EPS Next 3Y15.48%
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 (4/24/2025, 3:24:08 PM)

62.831

+3.13 (+5.24%)

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 Owners90.37%
Inst Owner Change0.45%
Ins Owners1.19%
Ins Owner Change-3.62%
Market Cap6.48B
Analysts76
Price Target77.72 (23.7%)
Short Float %1.08%
Short Ratio1.81
Dividend
Industry RankSector Rank
Dividend Yield 3.7%
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP168.34%
Div Incr Years14
Div Non Decr Years14
Ex-Date03-10 2025-03-10 (0.54)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)19.23%
Min EPS beat(2)16.55%
Max EPS beat(2)21.9%
EPS beat(4)3
Avg EPS beat(4)5.52%
Min EPS beat(4)-24.48%
Max EPS beat(4)21.9%
EPS beat(8)5
Avg EPS beat(8)1.81%
EPS beat(12)8
Avg EPS beat(12)3.03%
EPS beat(16)12
Avg EPS beat(16)7.84%
Revenue beat(2)1
Avg Revenue beat(2)-0.94%
Min Revenue beat(2)-5.45%
Max Revenue beat(2)3.57%
Revenue beat(4)1
Avg Revenue beat(4)-1.24%
Min Revenue beat(4)-5.45%
Max Revenue beat(4)3.57%
Revenue beat(8)3
Avg Revenue beat(8)-0.44%
Revenue beat(12)4
Avg Revenue beat(12)-0.7%
Revenue beat(16)8
Avg Revenue beat(16)3.65%
PT rev (1m)0%
PT rev (3m)-0.26%
EPS NQ rev (1m)-2.15%
EPS NQ rev (3m)-25.74%
EPS NY rev (1m)-1.11%
EPS NY rev (3m)-10.17%
Revenue NQ rev (1m)0.78%
Revenue NQ rev (3m)-5.62%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.35%
Valuation
Industry RankSector Rank
PE 13.09
Fwd PE 10.08
P/S 1.06
P/FCF 9.54
P/OCF 7.22
P/B 1.32
P/tB 2.17
EV/EBITDA 11.83
EPS(TTM)4.8
EY7.64%
EPS(NY)6.23
Fwd EY9.92%
FCF(TTM)6.59
FCFY10.49%
OCF(TTM)8.71
OCFY13.86%
SpS59.46
BVpS47.61
TBVpS28.9
PEG (NY)0.82
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.88%
ROE 2.67%
ROCE 2.57%
ROIC 2.04%
ROICexc 2.33%
ROICexgc 3.12%
OM 5.76%
PM (TTM) 2.14%
GM N/A
FCFM 11.08%
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
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-Score6
Asset Turnover0.41
Health
Industry RankSector Rank
Debt/Equity 0.45
Debt/FCF 3.22
Debt/EBITDA 3.91
Cap/Depr 105.26%
Cap/Sales 3.56%
Interest Coverage 2.34
Cash Conversion 160.21%
Profit Quality 518.08%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score6
WACC8.23%
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 Y15.92%
EPS Next 2Y18.87%
EPS Next 3Y15.48%
EPS Next 5YN/A
Revenue 1Y (TTM)2.08%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%11.07%
Revenue Next Year17.04%
Revenue Next 2Y13.56%
Revenue Next 3Y9.87%
Revenue Next 5YN/A
EBIT growth 1Y-37.21%
EBIT growth 3Y-39.83%
EBIT growth 5Y-18.36%
EBIT Next Year199.67%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y647.2%
FCF growth 3Y-13.76%
FCF growth 5Y-3.37%
OCF growth 1Y153.32%
OCF growth 3Y-9.73%
OCF growth 5Y-0.34%