First Advantage (NYSE:FA) Trading Down 5.5% - Time to Sell?

Key Points

• First Advantage shares fell 5.5% to about $20.39, with trading volume roughly 85% below average.
• Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $23.33; recent targets range from $18 to $30.
• The company beat quarterly earnings expectations, reporting $0.35 per share versus $0.29 forecast, while revenue increased 14.9% year over year. However, its extremely high P/E ratio of 674.87 highlights a demanding valuation.

Shares of First Advantage Co. (NYSE:FA - Get Free Report) dropped 5.5% during trading on Monday . The company traded as low as $20.60 and last traded at $20.3920. Approximately 227,588 shares changed hands during trading, a decline of 85% from the average session volume of 1,508,891 shares. The stock had previously closed at $21.58.

Analysts Set New Price Targets

Several equities analysts have weighed in on the company. JPMorgan Chase & Co. raised their price objective on First Advantage from $15.00 to $18.00 and gave the company an "overweight" rating in a research note on Friday, May 8th. Royal Bank Of Canada upped their price objective on shares of First Advantage from $21.00 to $24.00 and gave the company a "sector perform" rating in a report on Friday, August 7th. Stifel Nicolaus set a $18.00 price objective on First Advantage in a report on Friday, May 8th. Barclays raised their price target on shares of First Advantage from $20.00 to $30.00 and gave the company an "overweight" rating in a report on Friday, August 7th. Finally, Needham & Company LLC upgraded First Advantage from a "hold" rating to a "buy" rating and set a $28.00 price objective on the stock in a research report on Thursday, August 6th. Three investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $23.33.

First Advantage Trading Down 6.2%

The company has a debt-to-equity ratio of 0.61, a current ratio of 3.85 and a quick ratio of 3.85. The firm has a market cap of $3.48 billion, a P/E ratio of 674.87 and a beta of 1.16. The stock has a 50 day moving average of $19.43 and a 200 day moving average of $14.95.

First Advantage (NYSE:FA - Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported $0.35 earnings per share for the quarter, topping analysts' consensus estimates of $0.29 by $0.06. First Advantage had a net margin of 0.65% and a return on equity of 13.16%. During the same period last year, the business posted $0.27 earnings per share. The company's revenue for the quarter was up 14.9% on a year-over-year basis. First Advantage has set its FY 2026 guidance at 1.23-1.290 EPS. As a group, equities research analysts predict that First Advantage Co. will post 0.74 EPS for the current year.

Insider Transactions at First Advantage

In related news, Director James Lindsey Clark sold 4,921 shares of the firm's stock in a transaction that occurred on Monday, June 8th. The stock was sold at an average price of $15.69, for a total transaction of $77,210.49. Following the transaction, the director directly owned 56,844 shares in the company, valued at $891,882.36. This trade represents a 7.97% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 4.40% of the stock is currently owned by insiders.

Hedge Funds Weigh In On First Advantage

Several hedge funds and other institutional investors have recently modified their holdings of the company. KBC Group NV purchased a new stake in First Advantage in the 1st quarter worth approximately $35,000. Versant Capital Management Inc lifted its holdings in shares of First Advantage by 47.1% during the second quarter. Versant Capital Management Inc now owns 2,445 shares of the company's stock valued at $44,000 after purchasing an additional 783 shares during the last quarter. Fifth Third Bancorp purchased a new stake in shares of First Advantage in the first quarter worth $45,000. Clearstead Advisors LLC increased its stake in First Advantage by 192.8% during the 4th quarter. Clearstead Advisors LLC now owns 4,333 shares of the company's stock valued at $63,000 after purchasing an additional 2,853 shares in the last quarter. Finally, State of Wyoming purchased a new position in First Advantage in the 2nd quarter worth approximately $81,000. 94.91% of the stock is owned by institutional investors.

First Advantage Company Profile

First Advantage is a global provider of background screening, identity verification and workforce risk management solutions. The company delivers a comprehensive suite of services that help employers verify candidate credentials, manage regulatory compliance and mitigate risk throughout the employee lifecycle. Its platform is built to integrate with leading human capital management and applicant tracking systems, enabling a seamless and scalable experience for organizations of all sizes.

The company's core offerings include pre-employment and continuous background screening, digital identity verification, drug and health testing, and ongoing employee monitoring.

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