FA
First Advantage Corporation
$21.38
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 41.8% below fair value
You pay
$21.38
Bear
$19.33
Fair
$36.72
Bull
$56.18
Bear
$19.33
-9.6%
9% stage 1 growth, 11% discount
Fair
$36.72
+71.7%
15% stage 1 growth, 11% discount
Bull
$56.18
+162.8%
20% stage 1 growth, 11% discount
Adjust Assumptions
15.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
43%
Implied Market Multiple
21.6x
Market is pricing in (growth)
10.0%
vs 15.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$25.00
Divergence from AlphaVal
47%
Summary
Using a two-stage FCF DCF with 15% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $36.72 per share.
Warnings
Wall Street's average price target is $25.00 (from 12 analysts). Our estimate is 47% 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