First Advantage (FA) Valuation Check After a 31% Share Price Slide Over the Past Year

First Advantage (FA) has quietly slipped about 31% over the past year even as revenue and net income have grown, a combination that can catch value focused investors’ attention.

See our latest analysis for First Advantage.

That slide in First Advantage’s 1 year share price return, down about 26% year to date and 31.7% on a 1 year total shareholder return basis, suggests sentiment has cooled even as fundamentals improve. This could set up a later rerating if growth holds.

If this kind of disconnect between performance and expectations interests you, it might be worth exploring fast growing stocks with high insider ownership as a way to spot other potential mispriced stories.

With shares still trading at a steep discount to both analyst targets and some intrinsic value estimates despite solid top line growth, the key question now is whether this weakness is a buying opportunity or if markets are already pricing in future growth.

Most Popular Narrative: 21.6% Undervalued

With First Advantage last closing at $13.66, the most widely followed narrative sees fair value nearer $17.43, implying meaningful upside if its roadmap plays out.

Successful execution of synergy capture, cost management, and accelerated deleveraging following the Sterling acquisition is freeing up capital for further investment, margin expansion, and potential future strategic M&A, directly supporting stronger free cash flow and net margin improvement.

Read the complete narrative.

Curious how modest revenue growth assumptions, a sharp swing to profitability and a premium future earnings multiple all combine into that outcome? The full narrative unpacks the playbook.

Result: Fair Value of $17.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubborn hiring headwinds and fiercer price competition could easily undercut those optimistic margin and growth assumptions, which could delay any meaningful rerating.

Find out about the key risks to this First Advantage narrative.

Another Angle on Valuation

On simple sales based yardsticks, First Advantage does not look like a bargain. Its price to sales ratio of 1.6 times sits above both the US Professional Services average and its peer average of 1.4 times. This hints at less downside protection if growth stumbles.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own First Advantage Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized view in just minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding First Advantage.

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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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