First American Financial Corporation
$64.58
-0.34%First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Specialty Insurance segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, mortgage subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in 49 states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, South Korea, and internationally. The Specialty Insurance segment provides property and casualty insurance comprising coverage to residential homeowners and renters for liability losses and typical hazards, such as fire, theft, vandalism, and other types of property damage. It also offers residential service contracts that cover residential systems, such as heating and air conditioning systems, and appliances against failures that occur as the result of normal usage during the coverage period. First American Financial Corporation was founded in 1889 and is headquartered in Santa Ana, California.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is compressed (P/E 10.7).
Valuation inputs: P/E 10.7, earnings yield +9.3%, momentum -0.3%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is acceptable (ROE +11.3%, ROIC +18.4%).
Profitability stack: net margin +8.3%, ROE +11.3%, ROIC +18.4%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +66.1%, momentum -0.3%, net margin +8.3%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
First American Financial Corporation Market vs Earnings Trajectory
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First American Financial Corporation Fair Value Envelope
First American Financial Corporation Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Moderate profitability with room for improvement. Monitor interest expenses and tax efficiency.
Effective Tax Rate
Moderate tax rate typical for most corporations. Represents standard tax burden on profits.
Profitability Insight
High margin compression: Large gap between gross and net margins suggests operational inefficiencies or heavy debt burden. Focus on expense management and deleveraging.
First American Financial Corporation Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Steady FCF growth indicates consistent cash generation improvement. On a positive trajectory.
Working Capital Impact
Moderate working capital outflow. Typical for growing businesses, but ensure it's supporting revenue growth, not inefficiency.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
First American Financial Corporation Funding & Solvency Profile
Financial Health Analysis
Debt-to-Equity Ratio
High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
First American Financial Corporation Street Expectations Map
Wall Street analysts project that FAF stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 83.00, with estimates ranging from a low of 80.00 to a high of 85.00.
The consensus 1-year price target stands at 83.00, with estimates ranging from a low of 80.00 to a high of 85.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Analyst Conviction
Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.
Market Sentiment Insight
Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.
First American Financial Corporation Insider Positioning
During the last 12 months, insiders have purchased $2.04M and sold $1.60M worth of FAF shares, resulting in $439K of net buying activity.
3 Months
0
0.00
12.5K
867.62K
-868K
-$868K
3-6 Months
30.0K
2.04M
0
0.00
+2.0M
+$2.04M
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
11.2K
731.00K
-731K
-$731K
Top Buyers
Kennedy Parker S
Director
$2.04M
Top Sellers
Mccarthy Margaret M
Director
$698K
Doti James L
Director
$501K
Cornehl Lisa W
Officer: Svp, Chief Legal Officer
$400K
Insider Activity Analysis
Net Insider Sentiment
Moderately bullish with $439K net buying. Insiders show cautious optimism through measured share purchases.
Buy/Sell Ratio
Positive buy/sell ratio. Buying exceeds or matches selling, indicating net positive insider sentiment.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
3 insider sellers vs. 1 buyers. Widespread selling across multiple insiders may signal concerns.
faf Dividend History
Learning Layer
Related Guides
Build conviction on FAF by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.