First Advantage (NYSE:FA) Shares Gap Up Following Strong Earnings

First Advantage Co. (NYSE:FA) shares gapped up prior to trading on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $9.52, but opened at $11.58. First Advantage shares last traded at $10.58, with a volume of 735,718 shares changing hands.

The company reported $0.30 earnings per share for the quarter, beating the consensus estimate of $0.26 by $0.04. First Advantage had a net margin of 0.65% and a return on equity of 13.16%. During the same period last year, the company earned $0.18 EPS. First Advantage’s revenue for the quarter was up 36.8% on a year-over-year basis. First Advantage has set its FY 2026 guidance at 1.150-1.250 EPS.

Key Headlines Impacting First Advantage

Here are the key news stories impacting First Advantage this week:

• Positive Sentiment: Q4 earnings beat — First Advantage reported $0.30 EPS vs. consensus $0.26 and revenue grew ~36.8% year-over-year, signaling strong topline momentum and margin improvement. Read More.
• Positive Sentiment: $100M buyback and raised revenue ambition — Management outlined a $1.625B–$1.7B 2026 revenue target and authorized a $100M share buyback, which can support EPS and investor sentiment amid the company’s digital-identity growth narrative. Read More.
• Neutral Sentiment: FY2026 EPS guidance roughly in line — First Advantage set FY26 EPS of $1.150–$1.250 versus a consensus near $1.170; revenue guidance roughly meets or slightly exceeds Street expectations, so guidance is not a major surprise. Read More.
• Neutral Sentiment: Full earnings materials available — Management commentary, the earnings presentation and transcript are posted (useful for investors wanting color on digital-identity growth, margin levers and buyback timing). Read More. Read More.
• Negative Sentiment: Barclays trims price target — Barclays cut its target from $18 to $14 and assigned an “equal weight” rating; while the new $14 target still implies upside vs. current levels, the cut signals more cautious near-term analyst sentiment. Read More.

Analysts Set New Price Targets

A number of equities research analysts recently commented on FA shares. Barclays dropped their price objective on First Advantage from $18.00 to $14.00 and set an “equal weight” rating for the company in a report on Friday. Zacks Research lowered First Advantage from a “strong-buy” rating to a “hold” rating in a research report on Monday, January 5th. Finally, JPMorgan Chase & Co. cut their price target on shares of First Advantage from $21.00 to $17.00 and set an “overweight” rating on the stock in a research report on Friday, November 7th. Two investment analysts have rated the stock with a Buy rating and four have given a Hold rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average target price of $18.25.

Institutional Investors Weigh In On First Advantage

Hedge funds have recently modified their holdings of the business. Price T Rowe Associates Inc. MD raised its holdings in First Advantage by 4.3% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 13,954,320 shares of the company’s stock worth $202,757,000 after buying an additional 572,580 shares during the period. Capital World Investors increased its position in shares of First Advantage by 9.4% during the fourth quarter. Capital World Investors now owns 9,098,714 shares of the company’s stock worth $132,204,000 after acquiring an additional 780,200 shares in the last quarter. Vanguard Group Inc. increased its position in shares of First Advantage by 2.8% during the third quarter. Vanguard Group Inc. now owns 7,613,968 shares of the company’s stock worth $117,179,000 after acquiring an additional 210,187 shares in the last quarter. Alliancebernstein L.P. raised its holdings in shares of First Advantage by 18.4% during the third quarter. Alliancebernstein L.P. now owns 6,225,825 shares of the company’s stock worth $95,815,000 after acquiring an additional 969,314 shares during the period. Finally, Cat Rock Capital Management LP lifted its position in First Advantage by 8.9% in the 4th quarter. Cat Rock Capital Management LP now owns 3,342,818 shares of the company’s stock valued at $48,571,000 after acquiring an additional 274,449 shares in the last quarter. Institutional investors and hedge funds own 94.91% of the company’s stock.

First Advantage Stock Down 1.5%

The firm has a market capitalization of $2.00 billion, a P/E ratio of 383.67 and a beta of 1.17. The company has a debt-to-equity ratio of 0.61, a quick ratio of 3.85 and a current ratio of 3.85. The firm’s 50-day moving average is $13.16 and its 200 day moving average is $14.19.

First Advantage Company Profile

First Advantage is a global provider of background screening, identity verification and workforce risk management solutions. The company delivers a comprehensive suite of services that help employers verify candidate credentials, manage regulatory compliance and mitigate risk throughout the employee lifecycle. Its platform is built to integrate with leading human capital management and applicant tracking systems, enabling a seamless and scalable experience for organizations of all sizes.

The company’s core offerings include pre-employment and continuous background screening, digital identity verification, drug and health testing, and ongoing employee monitoring.