Yahoo Finance Results: First Advantage Corporation Delivered A Surprise Loss And Now Analysts Have New Forecasts
First Advantage Corporation (NASDAQ:FA) shareholders are probably feeling a little disappointed, since its shares fell 4.8% to US$15.99 in the week after its latest first-quarter results. Revenues came in at US$169m, in line with estimates, while First Advantage reported a statutory loss of US$0.02 per share, well short of prior analyst forecasts for a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for First Advantage
After the latest results, the nine analysts covering First Advantage are now predicting revenues of US$782.7m in 2024. If met, this would reflect a modest 3.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 46% to US$0.33. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$782.5m and earnings per share (EPS) of US$0.30 in 2024. So the consensus seems to have become somewhat more optimistic on First Advantage's earnings potential following these results.
There's been no major changes to the consensus price target of US$18.08, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on First Advantage, with the most bullish analyst valuing it at US$21.00 and the most bearish at US$15.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await First Advantage shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that First Advantage's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 8.7% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than First Advantage.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around First Advantage's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that First Advantage's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$18.08, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple First Advantage analysts - going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for First Advantage that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
