A Business at a Glance
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First American Financial Corp
FAF
$7.8B
Mkt Cap
$75.13
+8.95%
First American Financial Corp (FAF) has a current P/E ratio of 12.5, compared to its historical median P/E of 9.6. The stock is currently considered Fair based on its historical valuation range.
First American Financial Corp (FAF) has a 5-year average return on invested capital (ROIC) of 8.9%. This is below average and may indicate limited pricing power.
First American Financial Corp (FAF) has a market capitalization of $7.7B. It is classified as a mid-cap stock.
Yes, First American Financial Corp (FAF) pays a dividend with a trailing twelve-month yield of 2.91%. The company also returns capital through share buybacks, with a buyback yield of 1.66%.
Based on historical P/E analysis, First American Financial Corp (FAF) appears fair. The current P/E of 12.5 is 30% above its historical median of 9.6. The estimated fair value CAGR (P/E method) is -17.2%.
First American Financial Corp (FAF) operates in the Title Insurance industry, within the Financials sector.
First American Financial Corporation, founded in 1889 and listed on the NYSE under ticker FAF, operates through two primary segments: title insurance and services, and home warranty. The title insurance and services segment, which generated 93.6% of consolidated revenues in 2025, issues title insurance policies on residential and commercial property in the United States and internationally, while providing closing and escrow services, title plant data and records management, appraisals, lien release services, document generation, warehouse lending, mortgage loan subservicing, and banking, trust, and wealth management services. The company's business model is transaction-dependent, with revenues derived primarily from title insurance premiums, escrow fees, and ancillary services tied to real estate transaction activity and mortgage lending volumes. First American differentiates itself through proprietary real property-related databases and data capabilities, which support both its core title business and complementary services; the company is investing in digital transformation, automation of manual processes, and artificial intelligence technologies such as Endpoint and Sequoia platforms to improve operational efficiency, reduce risk, and enhance customer experience. The company serves mortgage lenders, real estate purchasers, and commercial clients across the United States and select international markets, with a strategic focus on acquiring companies that expand market share, enhance data capabilities, or provide technological advantages.
【Cycle recovery with technology leverage】 Management expects growth across commercial, purchase, and refinance revenue drivers in 2026, with commercial anticipated to reach record levels exceeding the prior 2022 peak despite ongoing uncertainty. The company is rolling out Endpoint nationally over the next two years and plans to expand Sequoia AI capabilities across California and Florida by year-end 2026 with a broader national rollout in 2027, which management believes will drive productivity gains, reduce risk, and improve operating leverage as market conditions improve. Investment income for full year 2026 is expected to remain roughly flat with 2025 levels for the title segment, with growth in transaction volumes and deposit balances potentially offsetting headwinds from expected interest rate cuts. The company remains opportunistic on capital deployment, including share repurchases and dividend increases, while targeting a long-term debt-to-capital ratio of 20%.
| Metric | Target | Period |
|---|---|---|
| Commercial revenue | Record level, exceeding 2022 peak | FY2026 |
| Investment income (title segment) | Roughly flat with 2025 | FY2026 |
| Endpoint deployment | Approximately 80%-85% of local branch network | End of 2026 |
| Sequoia AI expansion | Across California and Florida by year-end, followed by broader national rollout in 2027 | 2026-2027 |
Commercial revenue (FY2026): “On the commercial side, we expect a record revenue year, exceeding our prior peak in 2022.”
Investment income (title segment) (FY2026): “where we sit today, the way we're thinking about investment income for full year 2026, is that it's gonna come in roughly flat with what we saw in 2025 for the title segment.”
Endpoint deployment (End of 2026): “We expect approximately 80%-85% of our local branch network to be on Endpoint by the end of next year.”
Sequoia AI expansion (2026-2027): “By the end of this year, we plan to expand Sequoia across California and Florida with a national rollout plan for 2027.”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 7.7B | 7.5B | 6.1B | 6.0B | 7.6B | 9.2B |
| Net Income | 673M | 622M | 131M | 217M | 263M | 1.2B |
| EPS | $6.59 | $6.00 | $1.26 | $2.07 | $2.45 | $11.14 |
| Free Cash Flow | 824M | 763M | 679M | 91M | 518M | 1.1B |
| ROIC | 0.0% | 11.5% | 2.6% | 4.6% | 4.8% | 21.1% |
| Gross Margin | - | 46.4% | 42.1% | 43.0% | 38.5% | 45.8% |
| Debt/Equity | 0.28 | 0.28 | 0.32 | 0.29 | 0.35 | 0.11 |
| Dividends/Share | $2.19 | $2.18 | $2.14 | $2.10 | $2.06 | $1.94 |
| Operating Income | 0 | 826M | 165M | 274M | 326M | 1.6B |
| Operating Margin | 0.0% | 11.1% | 2.7% | 4.6% | 4.3% | 17.8% |
| ROE | 12.3% | 11.9% | 2.7% | 4.6% | 5.0% | 23.2% |
| Shares Outstanding | 102M | 104M | 104M | 105M | 107M | 111M |
First American Financial Corp passes 3 of 9 quality checks, indicating weak fundamentals.
First American Financial Corp trades at 12.5x trailing earnings, compared to its 15-year median P/E of 9.6x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 10.0x vs a median of 8.5x. The company's 5-year average ROIC is 8.9% with a gross margin of 43.2%. Total shareholder yield (dividends + buybacks) is 4.6%. At current prices, the estimated annualized return to fair value is -10.1%.
First American Financial Corp (FAF) reported annual revenue of $7.5 billion in its most recent fiscal year, based on SEC EDGAR filings.
First American Financial Corp (FAF) has a net profit margin of 8.3%. This is a modest margin.
First American Financial Corp (FAF) generated $763 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
First American Financial Corp (FAF) has a debt-to-equity ratio of 0.28. This indicates a conservatively financed balance sheet.
First American Financial Corp (FAF) reported earnings per share (EPS) of $6.00 in its most recent fiscal year.
First American Financial Corp (FAF) has a return on equity (ROE) of 11.9%. This indicates moderate shareholder returns.
First American Financial Corp (FAF) has a 5-year average gross margin of 43.2%. This indicates decent pricing power.
The Ledger Terminal provides 16 years of financial data for First American Financial Corp (FAF), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
First American Financial Corp (FAF) has a book value per share of $53.07, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects growth across commercial, purchase, and refinance revenue drivers in 2026, with commercial anticipated to reach record levels exceeding the prior 2022 peak despite ongoing uncertainty. The company is rolling out Endpoint nationally over the next two years and plans to expand Sequoia AI capabilities across California and Florida by year-end 2026 with a broader national rollout in 2027, which management believes will drive productivity gains, reduce risk, and improve operating leverage as market conditions improve. Investment income for full year 2026 is expected to remain roughly flat with 2025 levels for the title segment, with growth in transaction volumes and deposit balances potentially offsetting headwinds from expected interest rate cuts. The company remains opportunistic on capital deployment, including share repurchases and dividend increases, while targeting a long-term debt-to-capital ratio of 20%.
Based on recent SEC filings and earnings calls, First American Financial Corp (FAF) has provided the following forward guidance: Commercial revenue: Record level, exceeding 2022 peak (FY2026); Investment income (title segment): Roughly flat with 2025 (FY2026); Endpoint deployment: Approximately 80%-85% of local branch network (End of 2026); Sequoia AI expansion: Across California and Florida by year-end, followed by broader national rollout in 2027 (2026-2027).
No recent press releases.