Bull Rankings model

First American Financial Corporation (FAF) stock analysis

Insurance - Specialty. Scored on the same transparent model behind the daily rankings.

★
FAF
First American Financial Corporation · Insurance - Specialty
75.5Financial strength
$61.20Oct 9 close$6.2B
1Y Target$86.33Analyst consensus · 6 analysts
5Y Target$126.40Compound horizon
10Y Target$187.51Long-dated conviction
Rev+21.6%
A-
Revenue +21.6% — strong growth, well above S&P median (~7%)
P/E8.5x
A-
P/E 8.5 — cheaper than most Financial Services peers (≈25th pctile)
ROE13.8%
B
ROE 13.8% — acceptable capital return
P/B1.11
B+
P/B 1.11 — reasonable for a quality bank
Yield3.9%
B+
Yield 3.9% — healthy income

Targets: 1-year is analyst consensus where covered, 5- and 10-year are model estimates; the DCF is a cross-check, not a target. Methodology

Financial strength · 75.5 / 100
Profitability70.4
Value (P/B)80.6
Income78.8

A peer-relative read for financials on profitability (ROE), valuation, and covered income — the quality-growth (FCF/ROIC) screen doesn't apply to balance-sheet businesses. Not comparable to the 0–100 quality-growth score shown on other stocks.

Entry · Margin of safety
52-week rangeNear 52-week low
23% off the 12-month high

Model-generatedFrom reported fundamentals, checked against the figures above · Editorial standards

Why now
Insurance - Specialty · market cap $6.2b. Down 23% from 52-week high of $79.87 — deep drawdown territory. Revenue growing +22%, comfortably above the S&P median. 6 sell-side analysts rate this a Strong Buy with a mean 1-yr target of $86.33 (implying +41% upside).
Moat
ROE 14% meets the long-run market sustainable threshold — solid but not differentiated; the durability comes from elsewhere. Financial moat — scale of deposit base / underwriting franchise plus regulatory capital advantages. The largest players compound book value through cycles that erase smaller competitors.
Risk
Balance-sheet financial — book value, net interest margin, and credit loss provisions are the lever points; a rates regime change or a deterioration in the loan book moves the stock more than EPS does.
Horizon
1-3 yr $86.33 (6-analyst consensus) — fundamentals + valuation re-rating. 5 yr $126.40 at ~16% CAGR — compounding case rests on the competitive position widening. 10 yr $187.51 if current growth sustains into durable earnings power.

Not enough history yet — the model records FAF's score after each daily run, and the chart appears once a few days have accumulated.

FAF at a glance

FINANCIAL STRENGTH · BANKPROFITABILITY70VALUE81COVERED INCOME7975.5/100 on our peer scale — not the quality-growth score.
PRICE IN ITS 52-WEEK RANGE$61.2LOW $56.2HIGH $79.9Trading at the 21st percentile of its 52-week range ($56.2–$79.9).
ONE-YEAR MOVE VS ITS BETAFLATThis stock+6%Trailing one-year price change. Price history is not an inputto the Bull Rankings score.

Same audited fundamentals as the score, unless a card says otherwise.

Analyst estimate revisions

30-day change-1.7%
90-day change+0.4%
Forward EPS estimate$7.26

Over the last 90 days, what analysts expect FAF to earn is essentially unchanged. The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

Estimates move both ways and are not part of the Bull Rankings score. Biggest movers →

Shares to buy
32
Position size
$1,958
3.9% of portfolio
Stop price
$45.90
25% below $61.20
$ at risk if stopped
$489.60
budget $500.00 · 1% of portfolio

Math only: excludes commissions, slippage and gap risk. Inputs stay in your browser.

First American Financial Corporation (FAF): score, valuation & FAQ

First American Financial Corporation (FAF) is an Insurance - Specialty company. As a bank, insurer or REIT it runs on a different financial model from the rest of the market, so Bull Rankings grades it on a sector-appropriate card — price-to-book, dividend yield, payout ratio and cash-flow coverage — rather than the 0–100 quality-growth score used elsewhere. The read below is a transparent screen, not a buy recommendation.

Its strongest graded signals are Rev (A-), P/E (A-) and P/B (B+).

Is FAF a good stock to buy?

Bull Rankings grades FAF on a sector-appropriate card — price-to-book, dividend yield, payout and cash-flow coverage — rather than a single quality-growth score. That is driven by Rev (A-), P/E (A-) and P/B (B+). A score is a quantitative screen of First American Financial Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

How does Bull Rankings grade FAF?

As a bank, insurer or REIT, FAF isn't given a quality-growth score — signals like free cash flow, debt-to-equity and P/E don't translate cleanly to a balance-sheet business. Instead it's graded on a sector-appropriate card: price-to-book, dividend yield, payout ratio and operating-cash-flow coverage, where it rates strongest on Rev (A-), P/E (A-) and P/B (B+).

Is FAF overvalued or undervalued?

We don't publish a discounted-cash-flow value for FAF, and not because the business is unprofitable. For a lender, insurer or property trust, "free cash flow" measures balance-sheet growth rather than owner earnings — loan originations and repayments run through operating cash flow — so discounting it would produce a confident-looking number with nothing behind it. FAF is judged on book value, return on equity and income cover instead, which is what the financial-strength card shows.

What are the main risks of investing in FAF?

Balance-sheet financial — book value, net interest margin, and credit loss provisions are the lever points; a rates regime change or a deterioration in the loan book moves the stock more than EPS does.

New to these metrics? See the guides and the methodology.

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