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First Advantage
(NASDAQ:FA)
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Rating:65Neutral
Price Target:
$22.50
▲(12.44% Upside)
Action:Reiterated
Date:08/07/26
Overall score reflects strong cash flow and improving operating performance, supported by a constructive technical trend and a positive earnings update with raised guidance. The score is held back mainly by very expensive headline valuation (P/E ~403) and balance-sheet risk from elevated leverage despite ongoing deleveraging.
Positive Factors
Customer Retention and Growth
Strong retention and expanding enterprise bookings support recurring screening volumes and customer lifetime value. Upsell and cross-sell momentum also indicate that First Advantage is increasing wallet share through broader, integrated workforce-compliance offerings.
Negative Factors
Elevated Leverage
Leverage remains a meaningful constraint despite debt repayments. Higher debt can absorb future cash flow through interest and mandatory payments, limit strategic flexibility and increase execution risk if integration benefits or operating growth fall short.
Read all positive and negative factors
Positive Factors
Negative Factors
Customer Retention and Growth
Strong retention and expanding enterprise bookings support recurring screening volumes and customer lifetime value. Upsell and cross-sell momentum also indicate that First Advantage is increasing wallet share through broader, integrated workforce-compliance offerings.
Read all positive factors
First Advantage (FA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.49B
Dividend YieldN/A
Average Volume (3M)1.50M
Price to Earnings (P/E)137.7
Beta (1Y)1.31
Revenue Growth32.89%
EPS GrowthN/A
CountryUS
Employees9,500
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding171,753,700
10 Day Avg. Volume1,126,547
30 Day Avg. Volume1,496,164
Financial Highlights & Ratios
PEG Ratio1.00
Price to Book (P/B)1.92
Price to Sales (P/S)1.60
P/FCF Ratio17.86
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.50Price Target Upside32.43% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1.28
Revenue Forecast (FY)$1.70B
First Advantage Business Overview & Revenue Model
Company Description
First Advantage Corporation (FA) is a global technology firm that delivers solutions centered on human capital, specializing in verification, screening, safety protocols, and regulatory adherence. The company provides an extensive array of service...
How the Company Makes Money
First Advantage primarily makes money by charging fees for background screening and verification services delivered to employer customers, typically on a per-report, per-candidate, or per-transaction basis (often bundled into screening packages de...
First Advantage Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operating and financial performance: strong Q2 results across revenue (+15% YoY), adjusted EBITDA (+13% YoY) and adjusted EPS (+30% YoY), robust operating cash flow (+97% YoY), raised full-year guidance, continued deleveraging and active capital return via buybacks. Product innovation (AI and Digital Identity) and go-to-market execution drove bookings, upsell/cross-sell and improved package density. Offsetting factors include moderating growth expectations in the back half as the company laps an especially strong 2025, implementation scheduling pushing some revenue into 2027, modest international weakness (notably India), and net leverage that remains above the <3x target. Overall, positives materially outweigh the negatives.Positive Updates
Revenue Growth
Second quarter revenue of $449 million, representing 15% year-over-year growth and marking the fifth consecutive quarter of positive YoY revenue growth.
Negative Updates
International and Market Softness in India
International revenue grew only 2.4% year-over-year in Q2, with softer volumes in India attributed to prolonged geopolitical conflict (Middle East/Iran), higher fuel prices and regional macro disruption; India represents a relatively small portion (~~3% of revenues when international is ~12%).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Second quarter revenue of $449 million, representing 15% year-over-year growth and marking the fifth consecutive quarter of positive YoY revenue growth.
Read all positive updates
Company Guidance
Management raised full-year 2026 guidance to $1.67–$1.71 billion of revenue, $472–$486 million of adjusted EBITDA, $214–$225 million of adjusted net income and $1.23–$1.29 of adjusted diluted EPS (midpoint implying ≈7% revenue growth, ≈9% adjusted EBITDA growth and ≈21% adjusted diluted EPS growth y/y); this follows a strong Q2 (revenue $449M, +15% y/y; adjusted EBITDA $128.5M, 28.6% margin, +130 bps sequential; adjusted diluted EPS $0.35, +30% y/y; operating cash flow $73.6M, +97% y/y; cash $238M). For Q3 management expects mid‑to‑high single‑digit total revenue growth with base slightly positive, and for Q4 low‑to‑mid single‑digit total revenue growth with base neutral; adjusted EBITDA margins are expected to remain roughly in line with Q2 and adjusted diluted EPS is expected in the low‑to‑mid‑$0.30s in both Q3 and Q4. Capital allocation metrics noted: synergized net leverage 3.7x (target <3x), $165.5M+ cumulative debt repaid (including $25M prepayment in May and an additional $45M subsequent to quarter end), $18.7M repurchased in Q2 ($38M through July, 3.2M shares at $11.78 average, $61.8M remaining authorization), and $63M of run‑rate synergies actioned ( $51M realized) toward a $65–$80M synergy goal.First Advantage Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
54
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.66B | 1.57B | 860.21M | 763.76M | 810.02M | 712.29M |
| Gross Profit | 603.24M | 470.50M | 411.29M | 376.98M | 401.10M | 360.13M |
| EBITDA | 427.70M | 380.00M | 83.15M | 210.99M | 232.52M | 195.13M |
| Net Income | 25.14M | -34.82M | -110.27M | 37.29M | 64.60M | 16.05M |
Balance Sheet | ||||||
| Total Assets | 3.75B | 3.83B | 3.92B | 1.63B | 1.89B | 1.89B |
| Cash, Cash Equivalents and Short-Term Investments | 237.90M | 240.00M | 168.69M | 213.77M | 393.61M | 293.58M |
| Total Debt | 2.04B | 2.09B | 2.16B | 567.74M | 569.49M | 554.85M |
| Total Liabilities | 2.45B | 2.52B | 2.62B | 723.92M | 759.21M | 754.34M |
| Stockholders Equity | 1.29B | 1.31B | 1.31B | 906.73M | 1.13B | 1.13B |
Cash Flow | ||||||
| Free Cash Flow | 240.87M | 140.87M | 26.48M | 135.12M | 184.24M | 124.88M |
| Operating Cash Flow | 261.34M | 195.13M | 28.20M | 162.82M | 212.77M | 148.68M |
| Investing Cash Flow | -63.83M | -54.13M | -1.65B | -66.85M | -48.60M | -72.43M |
| Financing Cash Flow | -134.89M | -70.76M | 1.58B | -273.56M | -59.15M | 63.85M |
First Advantage Risk Analysis
First Advantage disclosed 46 risk factors in its most recent earnings report. First Advantage reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Advantage Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $931.68M | 57.02 | 10.41% | ― | 12.26% | -41.84% | |
76 Outperform | $4.98B | 43.27 | 5.32% | 0.49% | 1.41% | -22.01% | |
72 Outperform | $2.97B | 24.96 | 7.08% | ― | 14.32% | 22.61% | |
67 Neutral | $2.80B | 18.18 | 8.94% | 2.38% | 6.53% | 107.41% | |
65 Neutral | $3.49B | 137.72 | 1.93% | ― | 32.89% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
51 Neutral | $1.05B | -46.40 | 0.65% | ― | 1.45% | -716.67% |
* Industrials Sector Average
FA
First Advantage
20.95
4.52
27.51%
ABM
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47.10
0.02
0.03%
CBZ
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54.73
-9.19
-14.38%
UNF
UniFirst
286.50
112.81
64.95%
BV
BrightView Holdings
11.50
-3.14
-21.45%
LZ
LegalZoom
5.69
-5.04
-46.97%
First Advantage Corporate Events
Private Placements and FinancingRegulatory Filings and Compliance
Silver Lake trims First Advantage stake in offering
Neutral
Aug 12, 2026
On August 10, 2026, First Advantage Corporation announced that investment funds affiliated with Silver Lake Group would sell 12,500,000 shares of First Advantage common stock in an underwritten secondary offering under an effective U.S. Securities...
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
First Advantage boosts outlook and adds new director
Positive
Aug 6, 2026
First Advantage reported that in the quarter ended June 30, 2026, revenue rose 14.9% year-on-year to $448.8 million, while net income reached $16.9 million and adjusted EBITDA climbed to $128.5 million, reflecting strong demand, recent large contr...
Executive/Board ChangesShareholder Meetings
First Advantage Shareholders Endorse Board, Pay and Auditor
Positive
Jun 8, 2026
On June 5, 2026, First Advantage Corporation held its 2026 Annual Meeting of Stockholders, with approximately 94% of eligible shares represented in person or by proxy, underscoring strong shareholder engagement. At the meeting, investors elected C...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.