Fundamentals snapshot
FAF · NYQ · Financial Services · Insurance - Specialty
Current price
$64.02
52-week range
$56.20 - $79.87
Market cap
$6.54B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net debt $714.60M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
First American Financial Corporation helps people buy homes by providing title insurance (a type of insurance that protects against problems with the property's ownership history) and home warranty services. Their main money comes from title insurance, which is important because it gives buyers and lenders peace of mind about a property's ownership.
First American Financial Corporation's story begins in 1889, when Orange County, California, was newly formed and needed services to manage land ownership. Two companies started to handle these "title matters." In 1894, a local businessman merged them into the Orange County Title Company, the direct ancestor of today's First American. The company began issuing title insurance policies in 1924 and expanded its operations across the nation. It became a holding company in 1968, and over the years, it has evolved and diversified its offerings beyond just title insurance. In 2010, First American strategically separated its real estate information businesses to create two focused companies: First American Financial Corporation for title and financial services, and CoreLogic for real estate information. This move aimed to strengthen each company's competitive position.
First American Financial Corporation is a financial services company that primarily helps people navigate the complexities of real estate transactions. Think of them as a crucial behind-the-scenes player that ensures everything is in order when someone buys, sells, or refinances a property. They provide services that protect buyers and lenders from potential problems with a property's ownership history. Beyond this core function, they also offer other related services that support homeowners and the real estate industry.
This is the main engine of First American's business, generating the vast majority of its revenue. When you buy a house, this segment provides "title insurance," which is like a safety net for both you and the mortgage lender. It protects against financial loss if there's a problem with the property's title (the legal right to own it) that wasn't discovered when you bought it. This segment also handles "escrow" and "closing" services, which are the administrative and legal steps needed to finalize a real estate sale. Essentially, they make sure all the paperwork is correct and that money and ownership transfer smoothly. They also offer these services internationally.
This part of First American offers "home warranty" products. These are service contracts that protect homeowners against unexpected repair or replacement costs for major home systems and appliances that break down due to normal use during the coverage period. It's like an insurance policy for things like your heating and air conditioning, or major kitchen appliances, offering peace of mind for homeowners. This segment operates in various states across the U.S.
First American's leadership is focused on leveraging its deep expertise and vast data assets to lead the digital transformation of the real estate transaction industry. They are investing in innovative technologies, including artificial intelligence (AI), to enhance their services and improve customer experiences. The company aims to grow its core title insurance and settlement services business while also expanding its data and analytics offerings. This strategy seeks to create more value from their property data and provide workflow tools for lenders and real estate professionals, potentially leading to more consistent revenue streams.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net debt $714.6M. Interest coverage 6.3x.
First American Financial Corporation's profit covers its interest bill about 6.3 times over. which is weaker than most peers shown here.
Total debt $2.55B Interest coverage 6.26x This is the baseline the peer rows are being compared against.
Total debt $4.78B Interest coverage 6.77x +8% vs FAF Has roughly the same debt cushion as FAF.
Total debt $1.75B Interest coverage 17.84x +185% vs FAF Carries about 2.8x more debt cushion than FAF.
Total debt $788.33M Interest coverage 9.10x +45% vs FAF Carries about 1.5x more debt cushion than FAF.
Total debt $745.23M Interest coverage 18.19x +191% vs FAF Carries about 2.9x more debt cushion than FAF.
Total debt $1.34B Interest coverage 12.67x +102% vs FAF Carries about 2.0x more debt cushion than FAF.
What you should know
The numbers
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Valuation
Profitability
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What you should know