FAF

First American Financial Corporation

Fundamental data last updated:October 6, 2026

We may earn a commission from partner links. This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate.

company profile

SECTOR

Financial Services

industry

Insurance - Specialty

Exchange

NYSE

County of HQ

US

Next Earnings Date

Pending Announcement

Business Summary

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.

 


VALUATION

P/E

10.14

Market Cap ($M USD)

$6.75B

Forward P/E

8.84

PEG

0.60

PRICE TO SALES

1.12

PRICE TO BOOK

1.24

EV / EBITDA

4.76

5-Year Average P/E

Free Cash Flow Yield

12.21%

DCF Value

$52.26

Graham Number

$88.50

Price to FCF

8.19

EV to FCF

7.36

Earnings Yield

9.86%

FCF Yield

12.21%

DIVIDEND

Yield

3.31%

Annual Payout

$2.19

Payout Ratio

33.22%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$6.53

Next Year EPS Growth Estimate

$7.49

Next Year Revenue Growth Estimate

$8.69B

Return on Equity (ROE)

12.56%

FREE CASH FLOW

Operating Margin

14.82%

Debt-to-Equity

0.35

Piotroski F-Score

6

Altman Z-Score

1.36

Return on Invested Capital (ROIC)

4.97%

Current Ratio

0.00

Quick Ratio

0.00

Net Debt to EBITDA

-0.54

Interest Coverage

5.45

Gross Profit margin

74.26%

FCF PER SHARE

$8.00

REVENUE PER SHARE

$58.38

Gainseekers Quantitative Analysis

Summary

The market seems to be mispricing First American Financial Corporation. Despite a DCF value significantly lower than recent pricing, the stock’s Forward P/E of 9.48 suggests it’s trading at a discount relative to future earnings potential. The Earnings Yield of 9.19% indicates robust income generation, yet the Altman Z-score of 1.39 raises red flags about financial distress. While the Graham Number suggests a higher intrinsic value, the stock’s valuation metrics hint at both opportunity and caution. Investors must weigh these factors carefully.

AI Exposure / Tech Reliance

In the insurance industry, First American Financial is well-positioned to leverage AI and tech advancements. As a specialty insurer, integrating AI can enhance risk assessment and streamline operations. This adaptability is crucial for maintaining a competitive edge in a rapidly evolving market.

The Bull Case

For value or GARP investors, First American Financial offers compelling reasons to buy. The ROIC of 4.97% and a healthy FCF Yield of 11.39% underscore efficient capital use and cash generation. With a Piotroski F-Score of 6, the company demonstrates solid financial health, while an operating margin of 14.82% highlights strong pricing power. These metrics suggest a business capable of sustaining growth and rewarding shareholders.

The Bear Case

Despite its strengths, First American Financial faces structural risks. The Altman Z-score indicates potential financial distress, and the stock is technically overextended, trading close to its 52-week high. High valuation multiples, such as Price/Book at 1.33 and Price/Sales at 1.20, suggest limited upside. Investors should be wary of these risks, especially given the low current ratio and quick ratio, which point to liquidity concerns.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$83.00

Institutional Ownership %

1-Year Beta

1.30

Insider Buying % (6 Mo)

Distance to 52-Week High

7.91%

Distance to 52-Week Low

19.84%

EARNINGS SURPRISE %

25.47%

50-DAY SMA

$65.19

200-DAY SMA

$64.44

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.