First Acceptance (FACO) AI Stock Analysis

• Market Cap: $126.09M
• Dividend Yield: N/A
• Average Volume (3M): 1.88K
• Price to Earnings (P/E): 5.2
• Beta (1Y): 0.47
• Revenue Growth: -9.93%
• EPS Growth: -69.94%
• Country: US
• Employees: 633
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Specialty
• EPS (TTM): 0.21
• Shares Outstanding: 38,150,906
• 10 Day Avg. Volume: 2,334
• 30 Day Avg. Volume: 1,877
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 0.32
• Enterprise Value/Gross Profit: 1.09
• Enterprise Value/Ebitda: 4.79
• 1Y Price Target: $3.50
• Price Target Upside: 6.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: $3.50 ▲(6.06% Upside)

First Acceptance's overall stock score is driven primarily by its mixed financial performance and undervalued valuation. The company's strong balance sheet and low P/E ratio are significant positives. However, challenges in revenue and cash flow growth, along with neutral technical indicators, temper the overall outlook. Improving cash flow and revenue growth could enhance the stock's attractiveness.

First Acceptance Business Overview & Revenue Model

Company Description

First Acceptance Corporation, together with its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and related products in the United States. It issues non-standard automobile insurance policies to individuals based on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment preference, failure to maintain continuous insurance coverage, or driving record. The company also underwrites auto and motorcycle insurance products; and renters, homeowners, commercial, pet, life, travel, outdoor vehicle, and hospital indemnity insurance products. In addition, it provides TeleMed, a subscription service that offers access to doctor for consulting, diagnosing, and prescribing medication for non-emergency illness. The company primarily distributes its products through its retail locations, as well as through call center and internet. As of December 31, 2021, it leased and operated 338 retail locations, and a call center. First Acceptance Corporation was founded in 1969 and is headquartered in Nashville, Tennessee.

How the Company Makes Money

First Acceptance generates revenue primarily through the sale of non-standard auto insurance policies. The company earns premiums from policyholders, which can vary based on individual risk profiles, coverage options, and state regulations. Additionally, FACO may receive income from investment activities, including the management of reserves set aside for future claims. Key revenue streams include direct premiums written, policy renewals, and ancillary services such as installment payment plans. Strategic partnerships with agents and brokers also facilitate sales and distribution, enhancing the company's reach in the competitive insurance market.

First Acceptance Financial Statement Overview

Summary

First Acceptance shows a robust financial recovery and sound cash management, with strong revenue growth and improved profitability. The balance sheet remains stable, though with some fluctuations in equity. The company demonstrates effective cash flow management, positioning it well for future growth. However, challenges remain in operational efficiency, as highlighted by the 0% EBIT margin.

Income Statement

First Acceptance has demonstrated a strong recovery in its income statement metrics. The revenue growth rate from 2023 to 2024 was approximately 14.7%, showing a consistent upward trajectory. The net profit margin improved significantly from 2022's negative figure to 4.7% in 2024. However, the EBIT margin was 0% in 2024, indicating some challenges in operational efficiency. EBITDA margin was 6.9%, showing reasonable profitability before interest, taxes, depreciation, and amortization.

Balance Sheet

The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.27, indicating a manageable level of debt. The equity ratio was 24.9%, suggesting a reasonable proportion of equity financing. Return on Equity (ROE) was 15.5% in 2024, reflecting good profitability relative to shareholder equity. However, the company's equity position has been fluctuating, which could pose potential risks.

Cash Flow

The cash flow statements show strong management of cash resources. Free cash flow grew significantly by approximately 527.7% from 2022 to 2023, and further increased in 2024. The operating cash flow to net income ratio was 1.98 in 2024, indicating good cash generation relative to net income. The free cash flow to net income ratio was 1.97, further demonstrating effective cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	522.23M	559.43M	487.54M	302.30M	285.25M	269.58M
Gross Profit	153.09M	559.43M	487.54M	302.30M	285.25M	269.58M
EBITDA	34.88M	38.61M	105.40M	-16.32M	999.00K	15.86M
Net Income	24.35M	26.29M	73.91M	-17.49M	-1.23M	10.42M
Balance Sheet
Total Assets	773.35M	680.39M	570.37M	355.94M	322.65M	340.95M
Cash, Cash Equivalents and Short-Term Investments	401.42M	173.08M	302.67M	162.40M	180.49M	195.19M
Total Debt	45.16M	45.40M	46.02M	55.30M	51.97M	52.92M
Total Liabilities	595.55M	510.83M	428.52M	55.30M	51.97M	52.92M
Stockholders Equity	177.79M	169.56M	141.85M	65.52M	92.90M	111.69M
Cash Flow
Free Cash Flow	33.50M	51.79M	83.82M	-8.10M	-10.46M	-1.59M
Operating Cash Flow	34.06M	52.12M	85.16M	-3.89M	-6.60M	497.00K
Investing Cash Flow	-42.76M	-75.53M	-24.53M	-7.22M	34.48M	-18.52M
Financing Cash Flow	-6.32M	-446.00K	83.00K	-642.00K	-15.30M	-7.03M

First Acceptance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FACO, the sentiment is Negative. The current price of 3.3 is below the 20-day moving average (MA) of 3.52, below the 50-day MA of 3.46, and below the 200-day MA of 3.35, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 38.94 is Neutral, neither overbought nor oversold. The STOCH value of 33.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FACO.

First Acceptance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EIG	72 Outperform	$997.83M	10.33	9.60%	2.97%	2.32%	-11.91%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FACO	64 Neutral	$126.09M	5.23	14.73%	―	-9.93%	-69.94%
MBI	56 Neutral	$363.01M	―	26.69%	―	―	66.83%
HIPO	55 Neutral	$917.28M	―	-3.27%	―	43.15%	94.09%
JRVR	53 Neutral	$251.66M	―	-13.01%	0.75%	-20.88%	1.34%
AMBC	47 Neutral	$400.91M	64.08	-4.09%	―	-17.06%	-118.90%