First Advantage (NYSE:FA) Shares Gap Up on Better-Than-Expected Earnings

First Advantage Co. (NYSE:FA) shares gapped up prior to trading on Thursday following a better than expected earnings announcement. 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 analysts’ consensus estimates 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 quarter last year, the business posted $0.18 earnings per share. The business’s revenue for the quarter was up 36.8% compared to the same quarter last year. First Advantage has set its FY 2026 guidance at 1.150-1.250 EPS.

More First Advantage News

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

• Positive Sentiment: Q4 beat — FA reported $0.30 EPS vs. a $0.26 consensus and delivered ~36.8% year-over-year revenue growth, signaling accelerating sales momentum. Zacks: First Advantage Tops Q4 Estimates
• Positive Sentiment: Buyback and revenue target — Management set FY2026 revenue guidance of $1.625B–$1.7B and announced a $100M share buyback, which supports shareholder value and likely helped lift the stock. Seeking Alpha: Revenue Target & Buyback
• Positive Sentiment: Strategic growth driver — Management cited momentum in digital identity offerings as a growth catalyst, supporting the revenue outlook and investor optimism. Seeking Alpha: Digital Identity Momentum
• Neutral Sentiment: FY2026 EPS guidance in range — FA gave EPS guidance of $1.150–$1.250 for FY2026, roughly in line with consensus, leaving upside visibility tied to execution on the higher revenue target. GlobeNewswire: Q4 & FY2026 Guidance
• Neutral Sentiment: Earnings call details available — Management’s commentary in the Q4 earnings call provides context on margins, acquisition/investment plans and timing for digital initiatives; investors should review the transcript for execution details. Seeking Alpha: Earnings Call Transcript
• Negative Sentiment: High valuation and thin margins — FA trades at a high P/E (reflecting growth expectations) while recent net margin remains low, which leaves the stock sensitive to any execution shortfalls or guidance misses. MarketBeat: Valuation & Metrics
• Negative Sentiment: Guidance nuance — Although revenue guidance was raised, the EPS range’s lower bound sits near or slightly below some expectations, so investors will watch whether margin expansion keeps pace with revenue growth. MSN: Why FA Shares Are Soaring

Wall Street Analysts Forecast Growth

Several research firms have commented on FA. Zacks Research cut shares of First Advantage from a “strong-buy” rating to a “hold” rating in a research report on Monday, January 5th. JPMorgan Chase & Co. reduced their price target on shares of First Advantage from $21.00 to $17.00 and set an “overweight” rating for the company in a research report on Friday, November 7th. Three investment analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and a consensus target price of $19.25.

Hedge Funds Weigh In On First Advantage

A number of hedge funds and other institutional investors have recently made changes to their positions in FA. Clearstead Advisors LLC lifted its holdings in First Advantage by 192.8% during the 4th quarter. Clearstead Advisors LLC now owns 4,333 shares of the company’s stock valued at $63,000 after purchasing an additional 2,853 shares during the last quarter. Quantbot Technologies LP bought a new position in shares of First Advantage during the second quarter worth about $81,000. Parkside Financial Bank & Trust boosted its stake in shares of First Advantage by 22.8% during the 2nd quarter. Parkside Financial Bank & Trust now owns 7,164 shares of the company’s stock worth $119,000 after buying an additional 1,328 shares during the last quarter. BNP Paribas Financial Markets raised its holdings in shares of First Advantage by 105.7% in the 2nd quarter. BNP Paribas Financial Markets now owns 7,166 shares of the company’s stock valued at $119,000 after purchasing an additional 3,682 shares during the period. Finally, Tower Research Capital LLC TRC lifted its position in First Advantage by 503.2% during the second quarter. Tower Research Capital LLC TRC now owns 7,932 shares of the company’s stock worth $132,000 after acquiring an additional 6,617 shares during the last quarter. 94.91% of the stock is owned by institutional investors.

First Advantage Price Performance

The firm has a market capitalization of $2.04 billion, a price-to-earnings ratio of 389.67 and a beta of 1.17. The company’s 50 day moving average is $13.23 and its 200 day moving average is $14.21. The company has a quick ratio of 3.85, a current ratio of 3.85 and a debt-to-equity ratio of 0.61.

About First Advantage

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.