First American Financial Corporation (FAF) AI Stock Analysis

First American Financial Corporation operates primarily through its Title Insurance and Services and Specialty Insurance segments. The Title Insurance and Services segment issues title insurance policies for residential and commercial properties, while offering closing and escrow services, risk mitigation solutions, appraisals, lien release, document custodial services, and banking and wealth management services. It also facilitates tax-deferred real estate exchanges and maintains title plant records across 49 U.S. states, the District of Columbia, Canada, the United Kingdom, Australia, South Korea, and other international markets. The Specialty Insurance segment provides property and casualty coverage for homeowners and renters, as well as residential service contracts protecting household appliances and heating and air conditioning systems.

Revenue fluctuated from $9.21B in FY2021 down to $6.00B in FY2023, before rebounding to $6.12B in FY2024 and $7.45B in FY2025, representing a 21.6% increase in FY2025. Over the five-year period from FY2020 to FY2025, revenue posted a compound annual growth rate of 1.0%. Net income rose from $131.1M in FY2024 to $621.8M in FY2025, with net margin improving from 2.1% to 8.4%. Operating margin reached 11.1% in FY2025 and stood at 15.6% over the trailing twelve months. In the latest quarter ended June 30, 2026, quarterly revenue grew 15.0% year-over-year, while quarterly earnings grew 50.4%.

As of June 30, 2026, First American Financial held $2.62B in cash and short-term investments against total debt of $1.75B, leaving net cash of $871.6M. Shareholders' equity was $5.60B, yielding a debt-to-equity ratio of 0.31, alongside a current ratio of 55.46. In FY2025, the company produced $950.8M in operating cash flow and $762.5M in free cash flow. Capital expenditures totaled $188.3M, while capital returns included $223.0M in dividends paid and $122.3M in share buybacks.

At a last close of $64.92, First American Financial has a market capitalization of $6.63B and an enterprise value of $7.01B. The stock trades at a trailing price-to-earnings multiple of 9.0x and a forward P/E of 9.4x, below the median of its US-listed Financial Services peers of 12.1x trailing and 10.8x forward. Its price-to-sales ratio of 0.8x is also below the peer median of 3.2x. Over the past year, FAF returned 13.6%, trailing the S&P 500 (SPY) return of 16.8%, and its 5-year return of 5.7% lagged the S&P 500 return of 83.0%.

The company pays a forward annual dividend of $2.44 per share, translating to a dividend yield of 3.76% as of October 16, 2026. Dividends are distributed quarterly, supported by a payout ratio of 31.8%. First American Financial has paid dividends for 17 consecutive years, delivering a 5-year annualized dividend growth rate of 4.1%.

Consensus analyst coverage consists of 4 Strong Buy ratings, 2 Buy ratings, and zero Hold, Sell, or Strong Sell ratings. The mean price target is $85.00, representing a 30.9% premium over the last close of $64.92. For the fiscal year ending December 31, 2026, analysts estimate EPS of $7.08 on revenue of $8.17B. The company beat EPS estimates in each of the last 4 quarters, with its next earnings report scheduled for October 21, 2026.

This page is an AI-written research summary of First American Financial Corporation (FAF). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: FAF income statement, FAF balance sheet, FAF key metrics, FAF analyst forecast, FAF chart. See the FAF stock overview for the latest quote and news.