Traders Purchase Large Volume of First Advantage Call Options (NYSE:FA)

Key Points

• Unusual options activity: Traders bought 6,131 First Advantage call options on Monday, a massive surge of about 47,062% above the average daily volume of 13 contracts.
• Stock and earnings momentum: FA shares rose to $20.62, near their 52-week high of $20.97, after the company reported Q1 EPS of $0.26, beating estimates and posting 8.6% year-over-year revenue growth.
• Mixed signals from analysts and insiders: Analysts have a consensus Hold rating with an $18.50 target price, while recent insider sales by the president and a director may signal some caution despite raised price targets from several firms.

First Advantage Co. (NYSE:FA - Get Free Report) saw unusually large options trading on Monday. Traders bought 6,131 call options on the company. This is an increase of approximately 47,062% compared to the average daily volume of 13 call options.

First Advantage Stock Performance

Shares of First Advantage stock traded up $1.08 during trading hours on Monday, hitting $20.62. 889,968 shares of the company's stock traded hands, compared to its average volume of 1,303,767. The stock has a market capitalization of $3.54 billion, a price-to-earnings ratio of 687.50 and a beta of 1.17. First Advantage has a 12-month low of $8.82 and a 12-month high of $20.97. 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 company has a fifty day simple moving average of $16.44 and a 200-day simple moving average of $13.84.

First Advantage (NYSE:FA - Get Free Report) last posted its quarterly earnings data on Thursday, May 7th. The company reported $0.26 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.21 by $0.05. First Advantage had a net margin of 0.65% and a return on equity of 13.16%. First Advantage's quarterly revenue was up 8.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.17 earnings per share. First Advantage has set its FY 2026 guidance at 1.150-1.250 EPS. Equities research analysts anticipate that First Advantage will post 0.74 EPS for the current fiscal year.

Analyst Ratings Changes

A number of research analysts have weighed in on FA shares. JPMorgan Chase & Co. raised their price objective on shares of First Advantage from $15.00 to $18.00 and gave the company an "overweight" rating in a research note on Friday, May 8th. Stifel Nicolaus set a $18.00 price target on shares of First Advantage in a research report on Friday, May 8th. Citigroup boosted their price objective on First Advantage from $15.00 to $18.00 and gave the stock a "neutral" rating in a report on Monday, May 11th. Finally, Barclays upped their price objective on shares of First Advantage from $15.00 to $20.00 and gave the stock an "overweight" rating in a research report on Friday, May 8th. Two investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company's stock. According to MarketBeat, First Advantage presently has a consensus rating of "Hold" and a consensus target price of $18.50.

Insider Buying and Selling at First Advantage

In other news, Director James Lindsey Clark sold 4,921 shares of the stock in a transaction on Monday, June 8th. The stock was sold at an average price of $15.69, for a total value of $77,210.49. Following the completion of the transaction, the director directly owned 56,844 shares in the company, valued at approximately $891,882.36. This represents a 7.97% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, President Joelle M. Smith sold 23,334 shares of the firm's stock in a transaction on Thursday, May 7th. The shares were sold at an average price of $15.00, for a total value of $350,010.00. Following the sale, the president directly owned 19,393 shares in the company, valued at approximately $290,895. This trade represents a 54.61% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 4.40% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On First Advantage

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

About First Advantage

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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