Contrasting First American Financial (NYSE:FAF) & Roadzen (NASDAQ:RDZN)

Roadzen (NASDAQ:RDZN) and First American Financial (NYSE:FAF) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Earnings and Valuation

This table compares Roadzen and First American Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Roadzen	$48.04 million	3.92	-$72.87 million	($0.12)	-19.83
First American Financial	$6.13 billion	1.03	$131.10 million	$4.65	13.38

First American Financial has higher revenue and earnings than Roadzen. Roadzen is trading at a lower price-to-earnings ratio than First American Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Roadzen has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, First American Financial has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Roadzen and First American Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Roadzen	1	0	0	0	1.00
First American Financial	1	1	3	0	2.40

First American Financial has a consensus price target of $76.50, suggesting a potential upside of 22.99%. Given First American Financial’s stronger consensus rating and higher probable upside, analysts plainly believe First American Financial is more favorable than Roadzen.

Insider and Institutional Ownership

24.7% of Roadzen shares are owned by institutional investors. Comparatively, 89.1% of First American Financial shares are owned by institutional investors. 26.8% of Roadzen shares are owned by company insiders. Comparatively, 3.7% of First American Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Roadzen and First American Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Roadzen	-18.25%	N/A	-25.39%
First American Financial	6.80%	11.01%	3.50%

Summary

First American Financial beats Roadzen on 12 of the 14 factors compared between the two stocks.

About Roadzen

Roadzen, Inc., an insurtech company, provides various insurance products in the United States and internationally. It offers insurance as a service platform, including Via, which enables fleets, carmakers, and insurers to inspect a vehicle using computer vision; Global Distribution Network that enables the configuration, customer quote, payment, and administration of any insurance policy with any insurance carrier as the underwriter; xClaim, which enables digital, touchless, and real-time resolution of claims; StrandD, a digital, real-time dispatch, and tracking for roadside assistance and first notice of loss during accident claims; Good Driving that enables insurers and fleets to recognize drivers, train drivers, and build usage based insurance programs; and Drivebuddy AI, which provides driver-assistance capabilities. The company also provides insurance distribution platform that enables product creation and underwriting, re-insurer backing, and API exchange; and distribution, pre-inspection assistance, telematics, and roadside assistance. In addition, it offers insurance broker services. Roadzen, Inc. was founded in 2015 and is based in Burlingame, California.

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally. This segment also provides closing and/or escrow services; products, services, and solutions to mitigate risk or otherwise facilitate real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, document generation services, mortgage loans subservicing, and related products and services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant data and records. This segment offers its products through a network of direct operations and agents in various states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, New Zealand, South Korea, and internationally. The Home Warranty segment provides home warranty products, including residential service contracts that cover residential systems, such as heating and air conditioning systems, and various appliances against failures that occur as the result of normal usage during the coverage period. This segment operates in various states and the District of Columbia. The company was founded in 1889 and is headquartered in Santa Ana, California.