First Advantage (NYSE:FA) Shares Gap Down - Should You Sell?

Key Points

• First Advantage shares fell sharply at the open, dropping from a previous close of $23.52 to $21.22; they were last trading near $21.14.
• Analysts have a consensus “Hold” rating and an average price target of $24.57, with three Buy ratings and four Hold ratings.
• The company’s latest quarterly results beat expectations: EPS was $0.38 versus the $0.34 consensus, while revenue grew 13.8% year over year.

First Advantage Co. (NYSE:FA - Get Free Report) shares gapped down prior to trading on Tuesday. The stock had previously closed at $23.52, but opened at $21.22. First Advantage shares last traded at $21.1380, with a volume of 2,763,160 shares traded.

Analysts Set New Price Targets

FA has been the topic of a number of recent research reports. Jefferies Financial Group reissued a "hold" rating and set a $26.00 price target on shares of First Advantage in a research note on Friday. Citigroup boosted their price objective on shares of First Advantage from $18.00 to $22.00 and gave the stock a "neutral" rating in a report on Monday, August 17th. Zacks Research cut shares of First Advantage from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, October 6th. Royal Bank Of Canada increased their target price 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. Finally, Needham & Company LLC increased their target price on shares of First Advantage from $28.00 to $30.00 and gave the company a "buy" rating in a report on Friday. Three equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to MarketBeat, First Advantage has an average rating of "Hold" and a consensus target price of $24.57.

First Advantage Stock Performance

The company has a 50-day simple moving average of $20.34 and a two-hundred day simple moving average of $16.59. The company has a debt-to-equity ratio of 0.61, a quick ratio of 3.85 and a current ratio of 3.85. The firm has a market capitalization of $3.62 billion, a P/E ratio of 704.43 and a beta of 1.12.

First Advantage (NYSE:FA - Get Free Report) last announced its earnings results on Thursday, November 5th. The company reported $0.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.34 by $0.04. First Advantage had a return on equity of 13.16% and a net margin of 0.65%. During the same period last year, the company posted $0.30 earnings per share. First Advantage's quarterly revenue was up 13.8% compared to the same quarter last year. As a group, equities analysts forecast that First Advantage Co. will post 0.74 EPS for the current year.

Hedge Funds Weigh In On First Advantage

Several institutional investors and hedge funds have recently added to or reduced their stakes in FA. Sei Investments Co. increased its holdings in shares of First Advantage by 33.6% during the first quarter. Sei Investments Co. now owns 181,210 shares of the company's stock valued at $2,131,000 after acquiring an additional 45,608 shares in the last quarter. Jupiter Topco LLC purchased a new position in shares of First Advantage in the 2nd quarter worth about $3,275,000. Sunriver Management LLC boosted its stake in First Advantage by 14.0% in the 1st quarter. Sunriver Management LLC now owns 3,032,711 shares of the company's stock worth $35,665,000 after purchasing an additional 371,425 shares in the last quarter. Renaissance Technologies LLC bought a new position in First Advantage in the 1st quarter worth about $1,288,000. Finally, Quantinno Capital Management LP boosted its stake in First Advantage by 581.4% in the 1st quarter. Quantinno Capital Management LP now owns 214,882 shares of the company's stock worth $2,527,000 after purchasing an additional 183,345 shares in the last quarter. Hedge funds and other institutional investors own 94.91% of the company's stock.

About First Advantage

First Advantage provides technology-enabled background screening and verification services to employers and other organizations. Its offerings include criminal-record searches, employment and education verification, identity checks, drug and health screening, and related compliance services used in hiring and workforce management.

The company serves customers across North America and international markets, including businesses that need screening processes across multiple locations. Its services are designed to help organizations assess candidates and manage workplace-related risks.

First Advantage became a publicly traded company in 2021.

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