Fact based stock research
First Advantage (NasdaqGS:FA)

US31846B1089

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

First Advantage stock research in summary

fadv.com

ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), First Advantage (HR- & Employment Services, USA) shares have much better financial characteristics than comparable stocks. Shares of First Advantage are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives). But they show above-average growth (Growth Rank of 84) and are safely financed (Safety Rank of 81, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on First Advantage's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company First Advantage exhibits low value (Obermatt Value Rank of 20), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 84). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 81) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	20
Growth Rank	84
Safety Rank	81
Combined Rank	76

Country	USA
Industry	HR- & Employment Services
Index	NASDAQ
Size class	Medium

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: First Advantage

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	19	22	20
GROWTH
GROWTH	n/a	69	71	84
SAFETY
SAFETY	n/a	26	76	81
SENTIMENT
SENTIMENT	n/a	38	16	^new
360° VIEW
360° VIEW	n/a	16	17	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better First Advantage is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	19	22	20
GROWTH
GROWTH	n/a	69	71	84
SAFETY
SAFETY	n/a	26	76	81
COMBINED
COMBINED	n/a	19	46	76

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of First Advantage the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), First Advantage shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for First Advantage. Price-to-Profit (also referred to as price-earnings, P/E) is 59 which means that the stock price compared with what market professionals expect for future profits is lower than for 59% of comparable companies, indicating a good value concerning First Advantage's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 64, which means that the stock price is lower as regards to invested capital than for 64% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 79% of alternatives (only 21% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on First Advantage's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	25	19	21
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	48	67	59
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	62	59	64
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	19	22	20

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of First Advantage; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 84 (better than 84% compared with alternatives) for 2024, First Advantage shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for First Advantage. Sales Growth has a rank of 70 which means that currently, professionals expect the company to grow more than 70% of its competitors. Capital Growth is also above 37% of competitors with a rank of 78, and Stock Returns with the rank of 60 is also an outperformance. Only Profit Growth is low with a rank of 37 which means that currently, professionals expect the company to grow its profits less than 63% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 84, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, First Advantage is a good growth stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	74	64	70
PROFIT GROWTH
PROFIT GROWTH	n/a	12	36	37
CAPITAL GROWTH
CAPITAL GROWTH	n/a	93	49	78
STOCK RETURNS
STOCK RETURNS	n/a	31	87	60
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	69	71	84

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of First Advantage.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 81 (better than 81% compared with alternatives) for 2024, the company First Advantage has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of First Advantage is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for First Advantage. Refinancing is at 67, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is also good at 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 35, which means the company has an above-average debt-to-equity ratio. It has more debt than 65% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 81 (better than 81% compared with alternatives), First Advantage has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and First Advantage could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with First Advantage and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	30	48	35
REFINANCING
REFINANCING	n/a	60	56	67
LIQUIDITY
LIQUIDITY	n/a	18	98	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	26	76	81

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of First Advantage and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	85	26	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	8	63	^new
MARKET PULSE
MARKET PULSE	n/a	46	25	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	38	16	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for First Advantage.
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