FA
First Advantage Corporation
$15.42
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 34.8% below fair value
You pay
$15.42
Bear
$15.94
Fair
$23.65
Bull
$32.06
Bear
$15.94
+3.3%
8% stage 1 growth, 11% discount
Fair
$23.65
+53.4%
14% stage 1 growth, 11% discount
Bull
$32.06
+107.9%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
17.1x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $16.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $23.65 per share.
Warnings
Wall Street's average price target is $16.50 (from 12 analysts). Our estimate is 54% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions