William Blair Lowers Earnings Estimates for First Advantage

First Advantage Co. (NYSE:FA - Free Report) has seen a revision in its earnings forecast by investment analysts at William Blair. In a research report released on December 11th, the firm adjusted its fiscal year 2024 earnings per share (EPS) estimates downward. Analyst A. Nicholas now predicts that First Advantage will achieve earnings of $0.74 per share, a reduction from the previous estimate of $0.77.

Despite this change, William Blair maintains an "Outperform" rating on the stock. Currently, the consensus forecast for First Advantage's full-year earnings is $0.75 per share. In addition to the overall annual forecast, William Blair also provided estimates for specific upcoming quarters: they expect earnings of $0.19 EPS for Q4 2024, $0.12 EPS for Q1 2025, $0.27 EPS for Q4 2025, and $1.65 EPS for FY2027.

Recent Financial Performance

First Advantage last reported its quarterly earnings on November 12th. For that quarter, the company posted earnings of $0.26 per share, slightly surpassing analysts' expectations, which estimated earnings of $0.25 per share. The company achieved a return on equity of 13.16% and had a net margin of 0.65%. Revenue for the quarter totaled $199.10 million, which fell short of the anticipated $204.39 million. Compared to the previous year, revenue for the same quarter decreased by 0.6% from the $0.25 earnings per share reported last year.

Analysts Ratings and Price Targets

Further, several equity analysts have shared their insights on First Advantage recently. BMO Capital Markets initiated coverage with an "outperform" rating and set a price target of $20.00. Similarly, Needham & Company LLC reaffirmed a "hold" rating on November 13th. On November 15th, the Royal Bank of Canada also began its coverage with an "outperform" rating and a $22.00 price target. Conversely, Wolfe Research downgraded First Advantage from an "outperform" to a "peer perform" rating in October.

As for Barclays, they reiterated an "overweight" rating and maintained a target price of $22.00. Overall, the consensus among analysts includes three hold ratings, while seven analysts consider the stock a buy. According to data from MarketBeat.com, First Advantage currently has an average rating of "Moderate Buy" and an average target price of $53.29.

Stock Performance Update

As of the most recent trading session on Friday, shares of First Advantage (NYSE:FA) opened at $19.53. The company has a debt-to-equity ratio of 0.61 and a current ratio of 3.85. Its 50-day moving average stands at $18.97, and the 200-day moving average price is $18.00. First Advantage's market capitalization is approximately $3.37 billion. The stock exhibits a P/E ratio of 24.76, and over the past year, it has fluctuated between a low of $14.01 and a high of $20.79.

Institutional Investors and Shareholder Activity

A number of large investors have made notable adjustments to their positions in First Advantage recently. For example, Dimensional Fund Advisors LP increased its stake by 8.8% in the second quarter, acquiring an additional 254,219 shares and now holding 3,131,188 shares worth approximately $50.3 million. Additionally, Allspring Global Investments Holdings LLC acquired a new position valued at around $676,000 during the third quarter.

Sei Investments Co. raised its stake by 27.5% and now owns 126,159 shares, valued at $2.02 million after acquiring an extra 27,237 shares. FMR LLC also enhanced its stake by 50.8%, bringing its total to 5,600,026 shares valued at $111.16 million after purchasing 1,886,716 shares more in the last quarter. Furthermore, Oppenheimer Asset Management Inc. increased its holdings by 27.1%. Currently, institutional investors hold about 94.91% of First Advantage’s stock.

About First Advantage

First Advantage Corporation specializes in providing comprehensive employment background screening, identity verification, and related solutions globally. Its offerings include a vast range of pre-onboarding products and services, such as criminal background checks, health screening, and educational verifications, among others.

Conclusion

With the recent adjustments made by William Blair and other analysts, investors may want to closely monitor First Advantage as it navigates its financial performance in upcoming quarters. Those considering investment should evaluate these expert opinions and overall market conditions.

First, Advantage, Earnings