First American Financial Corporation (FAF) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-26.2%

$50.37

vs $68.22 price

Levered DCF

$56.67

After debt service

Piotroski score

7 / 9

Strong

Altman Z-score

1.56

Distress zone

Rating

A-

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	10.21×	49.56×	30.98×	21.28×	7×	8.35×	9.32×	10.6×
P/B	1.15×	1.32×	1.39×	1.2×	1.51×	1.19×	1.49×	1.34×
P/S	0.85×	1.06×	1.12×	0.74×	0.94×	0.82×	1.06×	0.88×
EV / EBITDA	5.72×	13.6×	8.82×	11.25×	5.27×	5.6×	5.91×	5.58×
Gross margin	95.6%	61.4%	61.8%	56.3%	61.2%	61.0%	62.6%	60.8%
Operating margin	11.1%	2.7%	4.6%	4.3%	17.8%	13.0%	14.6%	10.6%
Net margin	8.4%	2.1%	3.6%	3.5%	13.5%	9.8%	11.4%	8.3%
Current ratio	0×	0.32×	0.46×	0.22×	0.23×	0×	0×	6.76×
Debt / equity	0.35×	0.49×	0.45×	0.49×	0.43×	0.37×	0.3×	0.22×
Interest coverage	5.26×	1.11×	2.07×	3.5×	22.67×	16.19×	18.85×	14.87×
Dividend yield	3.5%	3.4%	3.2%	3.9%	2.5%	3.4%	2.9%	3.6%
Payout ratio	35.9%	168.3%	99.9%	82.5%	17.2%	28.5%	26.7%	37.6%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	11.3%	2.7%	4.5%	5.6%	21.5%	14.2%	16.0%	12.7%
Return on invested capital	18.5%	1.6%	2.6%	3.2%	13.1%	135.7%	161.9%	5.1%
Return on assets	3.8%	0.9%	1.3%	1.8%	7.5%	5.4%	6.1%	3.3%
Free cash flow yield	12.0%	10.5%	1.4%	9.3%	12.2%	16.7%	12.2%	13.4%
Earnings yield	9.8%	2.0%	3.2%	4.7%	14.3%	12.0%	10.7%	9.4%
Enterprise value	$6.9B	$7.1B	$5.3B	$6.6B	$9.9B	$6.3B	$6.4B	$4.3B
Net debt / EBITDA	0.43×	1.18×	-2.46×	1.7×	0.63×	0.44×	-0.19×	-0.9×
Cash conversion cycle (days)	-32	16	26	13	9	13	11	-322