First American Financial Corporation FAF
Composite 67/100; the shares have moved about 32% annualised. Names that move more contribute more risk for the same amount invested, and our composite reflects how strong the evidence for this one is right now.
Its least supportive area is Quality at 55 — still above average.
Growth ranks 83/100 — a strong point in its favour. Valuation ranks 82/100 — a strong point in its favour. Income ranks 72/100 — a moderate point in its favour.
Its least supportive area is Quality at 55 — still above average.
What the company does First American Financial Corporation (FAF) is a specialty financial services firm focused on title insurance, escrow, and related real estate transaction services globally. Its Title Insurance and Services segment dominates revenue, offering policies, risk mitigation, valuations, and data solutions across the U.S. and select international markets. The Home Warranty segment provides additional coverage for residential properties. The company operates through direct and agent networks, leveraging proprietary title plant data.
Key financials FAF reports strong profitability metrics: ROE 12.8%, ROA 4.0%, and net margins of 9.3%. Revenue and EPS growth stand at 15.0% and 50.4%, respectively, with gross margins at 64.0%. The balance sheet shows moderate leverage (Debt/Equity 0.49) and strong liquidity (Current ratio 0.40). Cash flow yield is robust at 30.3%, supporting a 3.2% dividend yield with a 30.5% payout ratio.
Stock health Momentum remains positive over multiple timeframes: 3m 11.78%, 6m 22.76%, and 12m 33.36%. The stock is 2.13% below its 52-week high, with RSI(14) at 68.00, indicating near-term strength. Strength and Growth pillar scores (54.2 and 73.1) suggest operational resilience, though Quality (51.9) lags. Income (86.7) and Valuation (83.3) scores highlight attractiveness.
Price vs fair value FAF trades at a **discount** of 11.00% to our fair-value estimate of 86.79 and a **discount** of 12.15% to the 12-month target of 87.67. - Analysts highlight FAF’s acquisition strategy as a potential growth driver (Simply Wall St). - Recent coverage emphasizes its cash-heavy balance sheet and strong fundamentals (StockStory). - Comparable firms like Aon beat earnings, underscoring sector resilience (Zacks). - Growth stock scrutiny persists amid broader market volatility (StockStory).
Looking forward Forward P/E (9.38) and PEG (0.85) suggest undervaluation relative to growth. High FCF yield (30.3%) and dividend sustainability (payout 30.5%) support income appeal. Execution risks include integration of acquisitions and maintaining margin discipline. Analyst targets imply ~12-15% upside to current levels.
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Data as of 2026-09-03, compiled from third-party sources; errors and delays are possible and figures are not warranted. Investing puts your capital at risk; past performance does not predict future results. We publish our full track record, including the calls that lost, and our conflicts of interest.