FA First Advantage Corp

First Advantage Co. (NYSE:FA) has received a "Moderate Buy" consensus rating from seven analysts, with an average 12-month price target of $19.25. The company recently reported strong Q3 earnings, beating EPS estimates and showing significant revenue growth, while setting optimistic FY2025 guidance. Despite high institutional ownership and a strong performance, the stock trades at a high P/E ratio, suggesting a stretched valuation.

First Advantage Corporation's share price surged 25% recently, demonstrating strong revenue growth that positions its price-to-sales (P/S) ratio above the industry average. Analysts forecast continued superior revenue growth, supporting investor confidence despite the higher P/S. This indicates that the market expects First Advantage's strong performance to persist, justifying its current valuation.

First Advantage Corporation (NASDAQ:FA) recently experienced a 25% share price surge, though it remains 18% down over the last year. Despite a higher-than-average price-to-sales ratio of 1.8x compared to the sector average of 1.3x, analysts predict continued strong revenue growth of 9.7%, surpassing the industry's 6.5% forecast. This positive outlook on future revenues is seen as justified by the market, supporting the elevated P/S ratio.

First Advantage Corporation's P/S ratio of 1.7x is similar to the Professional Services industry median of 1.4x, which might lead some investors to feel indifferent. However, the company has shown superior revenue growth, including an impressive 93% last year and an 80% overall rise in the last three years. Analysts forecast 9.7% revenue growth for First Advantage in the next year, compared to the industry's 6.4%, suggesting its P/S ratio might be undervalued given its positive outlook.

First Advantage (FA) has seen its share price fall 31% over the past year despite growth in revenue and net income. This disconnect suggests sentiment has cooled, potentially creating a buying opportunity, as analysts widely see the stock as undervalued with a fair value of $17.43 compared to its current price of $13.66. While fundamentals are strong and the company is executing well post-acquisition, risks include hiring headwinds and increased price competition that could impact future growth and margin assumptions.

Sunriver Management LLC significantly reduced its stake in First Advantage Co. (NYSE:FA) by 53.0% in Q2, selling over 1.8 million shares and retaining 1.6 million worth about $26.7 million. While institutional ownership is high at 94.91%, insiders, including President Joelle M. Smith, have also trimmed their positions. Analyst ratings are mixed but lean positive, with a "Moderate Buy" consensus and an average target price of $19.25, after the company exceeded Q2 earnings expectations and provided strong FY2025 guidance.