First Acceptance (FACO) AI Stock Analysis

First Acceptance

(Other OTC:FACO)

Select Model

Rating:65Neutral

Price Target:$6.50▲(6.91% Upside)

Action:reiterated

Date:08/07/26

FACO scores a 65, reflecting a company with a compelling valuation (P/E of 5.6) and a strengthened balance sheet following a successful turnaround, offset by meaningful concerns around declining revenue, compressing margins, and deteriorating cash flows from 2023 peak levels. Technical indicators confirm a positive price trend with the stock trading above all major moving averages, though overbought RSI readings suggest limited near-term upside. The very low beta provides defensive characteristics. The key risk is whether the normalization in financial performance stabilizes or continues to deteriorate, which will determine if the current low valuation represents genuine value or a value trap.

Positive Factors

Conservative LeverageLow debt-to-equity (~0.22) and a conservatively levered balance sheet provide durable financial flexibility for an insurer. This permits absorbing underwriting volatility, funding reserve increases or catastrophe events, supports rate filings and reinsurance purchase options, and lowers financing risk over months.

Negative Factors

Revenue DeclineA multi-period revenue decline limits scale benefits and pricing leverage for a non-standard auto insurer. Shrinking premiums restrict ability to spread fixed distribution and admin costs, reduce investment float growth, and constrain capital available for product expansion or cost absorption over several months.

First Acceptance (FACO) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $224.35M
Dividend Yield: ―
Average Volume (3M): 12.87K
Price to Earnings (P/E): 6.0
Beta (1Y): 0.30
Revenue Growth: -7.70%
EPS Growth: 58.56%
Country: US
Employees: 629
Sector: Financial
Sector Strength: 68
Industry: Insurance - Property & Casualty

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 polic...

How the Company Makes Money

FACO’s primary source of revenue is insurance operations. It makes money by (1) collecting insurance premiums from policyholders for personal auto insurance coverage and recognizing those premiums as earned over the policy term; and (2) investing the...

First Acceptance Financial Statement Overview

Summary

First Acceptance completed a strong turnaround from losses in 2021-2022 to profitability, with a standout 2023. However, revenue is now declining (~9.5% in 2025), margins are compressing (net margin from 15.2% peak to ~6-7%), and operating/free cash flows have dropped over 60% from peak levels. The balance sheet is a bright spot with low leverage (D/E of 0.22) and tripled equity, but cash flow deterioration and revenue headwinds temper the outlook. Blending the income statement (58), balance sheet (68), and cash flow (52) scores reflects a company that is financially healthy but clearly normalizing from exceptional results.

Income Statement

58Neutral

Balance Sheet

68Positive

Cash Flow

52Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	482.11M	506.34M	559.43M	487.54M	302.30M	285.25M
Gross Profit	203.70M	200.89M	40.53M	33.48M	-15.11M	2.05M
EBITDA	52.04M	43.11M	38.61M	105.40M	-16.32M	999.00K
Net Income	37.71M	30.23M	26.29M	73.91M	-17.49M	-1.23M
Balance Sheet
Total Assets	748.24M	725.62M	680.39M	570.37M	355.94M	322.65M
Cash, Cash Equivalents and Short-Term Investments	54.63M	181.07M	173.08M	302.67M	162.40M	180.49M
Total Debt	45.13M	45.53M	45.40M	46.02M	55.30M	51.97M
Total Liabilities	533.81M	525.74M	510.83M	428.52M	55.30M	51.97M
Stockholders Equity	214.43M	199.88M	169.56M	141.85M	65.52M	92.90M
Cash Flow
Free Cash Flow	31.58M	46.57M	51.79M	83.82M	-8.10M	-10.46M
Operating Cash Flow	31.98M	47.14M	52.12M	85.16M	-3.89M	-6.60M
Investing Cash Flow	-39.23M	-48.48M	-75.53M	-24.53M	-7.22M	34.48M
Financing Cash Flow	-61.00K	-6.28M	-446.00K	83.00K	-642.00K	-15.30M

First Acceptance Technical Analysis

Technical Analysis SentimentPositive

Last Price6.08

Price Trends

50DMA6.06Positive

100DMA5.81Positive

200DMA5.23Positive

Market Momentum

MACD-0.00Negative

RSI51.66Neutral

STOCH13.40Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FACO, the sentiment is Positive. The current price of 6.08 is above the 20-day moving average (MA) of 6.05, above the 50-day MA of 6.06, and above the 200-day MA of 5.23, indicating a bullish trend. The MACD of -0.00 indicates Negative momentum. The RSI at 51.66 is Neutral, neither overbought nor oversold. The STOCH value of 13.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FACO.

First Acceptance Risk Analysis

First Acceptance disclosed 20 risk factors in its most recent earnings report. First Acceptance 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 Acceptance Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

FACO against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KINS	83Outperform	$291.98M	8.13	0.11%	1.04%	34.04%	15.59%
DGICA	78Outperform	$729.84M	9.80	10.57%	4.01%	-3.37%	-22.70%
SAFT	77Outperform	$1.53B	22.20	7.79%	3.54%	7.04%	-18.57%
MCY	69Neutral	$5.67B	6.05	37.19%	1.24%	9.95%	140.12%
Sector *	68Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FACO	65Neutral	$224.70M	5.96	18.63%	―	-7.70%	58.56%
ROOT	63Neutral	$801.61M	13.95	15.91%	―	14.86%	-30.59%

* Financial Sector Average

Performance Comparison

FACO and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
FACO	First Acceptance Corp	6.08	2.83	87.31%
DGICA	Donegal	18.72	0.79	4.38%
KINS	Kingstone	20.17	5.45	37.02%
MCY	Mercury General	102.42	27.21	36.17%
SAFT	Safety Insurance	103.90	38.75	59.48%
ROOT	Root, Inc.	51.76	-29.03	-35.93%

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.

Date of analysis: Aug 07, 2026

First Acceptance AI Stock Analysis