First Advantage Corporation Common Stock (FA)

FairStock Score: 57/100 — STEADY

Key Financials

Strengths

• Generates $200 million in annual free cash flow (9.1% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Revenue growth of 36.8% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($3) with negative 332% margin of safety—limited downside protection
• Altman Z-Score of 0.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

First Advantage Corporation Common Stock is a small-cap industrials company valued at $2.2 billion. The business generates $1.6 billion in annual revenue with a 0.2% net margin and $200 million in free cash flow. From a quality standpoint, First shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.7 warrants caution. On valuation, the stock is commanding a steep 319.2x multiple, with trades far above its Graham Number ($3) with no margin of safety. Growth dynamics show revenue growing at 36.8% and profit growth of 103.5%. Our composite FairStock Score of 57/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

First's 37% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $200 million in annual free cash flow (9.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 319x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer