First Advantage (FA) Is Up 6.5% After Raising 2025 Guidance Post-Sterling Integration - Has The Bull Case Changed?

• First Advantage reported third quarter 2025 results that exceeded analyst expectations, with revenues of US$409.15 million and a return to profitability, and also raised its full-year 2025 revenue guidance to between US$1.54 billion and US$1.57 billion, citing benefits from acquired synergies.
• The company attributed its improved outlook to sustained growth in key verticals and continued international revenue expansion, following the successful integration of Sterling Check Corp.
• We’ll explore how First Advantage’s raised full-year guidance after its Sterling integration may influence the company’s investment narrative.

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First Advantage Investment Narrative Recap

To be a shareholder in First Advantage, you need to believe in its ability to capture demand for background screening and digital identity solutions, drive international revenue growth, and realize sustained benefits from acquisitions like Sterling. The recent third-quarter results and raised full-year guidance may ease some immediate concerns about integration risks and give fresh visibility on profitability, but the biggest near-term catalyst remains ongoing synergy capture, while competition and pressures on base hiring volumes are still key risks. The impact of this news event appears to be encouraging, as it affirms solid execution, but it does not fundamentally change the balance between the main growth drivers and risks facing the business right now.

Among recent announcements, the company's participation in major investor conferences this quarter stands out. These events are especially relevant as management will likely use the platform to discuss its updated guidance and integration progress, reinforcing the narrative of operational improvement and synergy delivery, a key element tied to both current catalysts and ongoing investor confidence.

By contrast, what remains crucial for investors to be aware of is how any persistent hiring weakness or margin pressure could...

Read the full narrative on First Advantage (it's free!)

First Advantage's outlook anticipates $1.9 billion in revenue and $143.4 million in earnings by 2028. This scenario assumes a 14.8% annual revenue growth rate and an earnings increase of $293.5 million from the current earnings of -$150.1 million.

Uncover how First Advantage's forecasts yield a $19.14 fair value, a 39% upside to its current price.

Exploring Other Perspectives

Only one private investor in the Simply Wall St Community valued First Advantage at US$19.14 per share, closely clustered around the current price target consensus. While the recent guidance increase reflects progress in synergy capture, the risk of revenue stagnation if hiring volumes soften continues to weigh on company prospects. Explore a range of community views to see how different investors interpret these developments for future performance.

Explore another fair value estimate on First Advantage - why the stock might be worth as much as 39% more than the current price!

Build Your Own First Advantage Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your First Advantage research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free First Advantage research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate First Advantage's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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