First Advantage (NYSE:FA) Shares Gap Down - Time to Sell?

Key Points

• First Advantage shares opened lower, falling from a prior close of $20.93 to $20.31 before last trading at $21.10. The stock has a market capitalization of $3.68 billion and trades well above its 200-day moving average.
• Analysts remain broadly positive, with a consensus rating of “Moderate Buy” and an average price target of $23.33. Recent targets range from $18 to $30, including upgrades from Zacks Research, JPMorgan, RBC and Barclays.
• The company exceeded quarterly earnings expectations, reporting $0.35 per share versus a $0.29 consensus estimate, while revenue rose 14.9% year over year. Institutional investors own 94.91% of the stock, though a director recently sold shares under a pre-arranged trading plan.

First Advantage Co. (NYSE:FA - Get Free Report) gapped down before the market opened on Friday . The stock had previously closed at $20.93, but opened at $20.31. First Advantage shares last traded at $21.10, with a volume of 50,724 shares trading hands.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on FA. Zacks Research upgraded shares of First Advantage from a "hold" rating to a "strong-buy" rating in a report on Monday, August 17th. 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. JPMorgan Chase & Co. lifted their target price on shares of First Advantage from $15.00 to $18.00 and gave the stock an "overweight" rating in a research report on Friday, May 8th. Barclays boosted their price target on shares of First Advantage from $20.00 to $30.00 and gave the stock an "overweight" rating in a research note on Friday, August 7th. Finally, Stifel Nicolaus set a $18.00 price target on shares of First Advantage in a research report on Friday, May 8th. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and two have given a Hold rating to the company. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus target price of $23.33.

First Advantage Stock Up 2.3%

The company has a current ratio of 3.85, a quick ratio of 3.85 and a debt-to-equity ratio of 0.61. The stock has a 50 day simple moving average of $20.27 and a 200 day simple moving average of $15.45. The firm has a market capitalization of $3.68 billion, a PE ratio of 713.67 and a beta of 1.16.

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, beating the consensus estimate of $0.29 by $0.06. First Advantage had a return on equity of 13.16% and a net margin of 0.65%.During the same period in the prior year, the company earned $0.27 earnings per share. The firm's quarterly revenue 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, sell-side analysts forecast that First Advantage Co. will post 0.74 earnings per share for the current year.

Insider Buying and Selling

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

Institutional Investors Weigh In On First Advantage

A number of large investors have recently added to or reduced their stakes in the company. Corient Private Wealth LP grew its stake in shares of First Advantage by 37.1% in the second quarter. Corient Private Wealth LP now owns 145,206 shares of the company's stock worth $2,621,000 after purchasing an additional 39,297 shares during the last quarter. California State Teachers Retirement System raised its position in First Advantage by 1,656.8% during the 2nd quarter. California State Teachers Retirement System now owns 1,635,619 shares of the company's stock valued at $29,523,000 after purchasing an additional 1,542,518 shares during the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its holdings in First Advantage by 2.9% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 208,339 shares of the company's stock worth $3,761,000 after buying an additional 5,949 shares during the period. North Star Asset Management Inc. purchased a new stake in First Advantage in the 2nd quarter worth approximately $3,503,000. Finally, Bamco Inc. NY purchased a new stake in First Advantage in the 2nd quarter worth approximately $63,214,000. Institutional investors own 94.91% of the company's stock.

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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