Latest Ratios: P/E Ratio 11.3x · EV/EBITDA 7.2x · ROE 11.9%. (2007–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $7.0B | $6.4B | $6.5B | $6.7B | $5.6B | $8.7B | $5.8B | $6.6B | $5.1B | $6.3B | $4.1B |
| Enterprise Value | $7.5B | $6.9B | $7.1B | $5.3B | $6.6B | $9.9B | $6.3B | $6.4B | $4.4B | $5.6B | $3.8B |
| P/E Ratio → | 11.35 | 10.24 | 49.56 | 31.13 | 21.36 | 7.02 | 8.38 | 9.38 | 10.65 | 14.90 | 11.85 |
| P/S Ratio | 0.93 | 0.86 | 1.06 | 1.12 | 0.74 | 0.95 | 0.82 | 1.07 | 0.88 | 1.09 | 0.73 |
| P/B Ratio | 1.28 | 1.16 | 1.32 | 1.39 | 1.20 | 1.51 | 1.19 | 1.50 | 1.35 | 1.81 | 1.35 |
| P/FCF | 9.12 | 8.36 | 9.59 | 74.15 | 10.80 | 8.23 | 6.01 | 8.22 | 7.49 | 12.65 | 11.40 |
| P/OCF | 7.31 | 6.70 | 7.26 | 19.02 | 7.20 | 7.14 | 5.38 | 7.26 | 6.38 | 9.97 | 8.32 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.93 | 1.16 | 0.88 | 0.87 | 1.07 | 0.90 | 1.04 | 0.76 | 0.97 | 0.68 |
| EV / EBITDA | 7.17 | 6.61 | 19.12 | 11.39 | 13.40 | 5.49 | 5.91 | 6.22 | 5.93 | 9.78 | 6.56 |
| EV / EBIT | 9.04 | 7.01 | 22.63 | 12.96 | 15.79 | 5.77 | 6.47 | 6.74 | 6.71 | 11.65 | 7.42 |
| EV / FCF | — | 9.04 | 10.50 | 58.01 | 12.71 | 9.33 | 6.53 | 7.97 | 6.46 | 11.26 | 10.59 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 95.6% | 95.6% | 61.4% | 61.8% | 56.3% | 61.2% | 61.0% | 62.6% | 60.8% | 59.9% | 58.9% |
| Operating Margin | 11.1% | 11.1% | 2.7% | 4.6% | 4.3% | 17.8% | 13.0% | 14.6% | 10.6% | 7.7% | 8.6% |
| Net Profit Margin | 8.4% | 8.4% | 2.1% | 3.6% | 3.5% | 13.5% | 9.8% | 11.4% | 8.3% | 7.3% | 6.2% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 11.9% | 11.9% | 2.7% | 4.5% | 5.0% | 23.2% | 14.9% | 17.3% | 13.1% | 13.0% | 11.9% |
| ROA | 4.0% | 4.0% | 0.8% | 1.4% | 1.7% | 8.5% | 5.7% | 5.5% | 3.5% | 3.4% | 3.0% |
| ROIC | 10.7% | 10.7% | 2.8% | 4.5% | 3.9% | 19.9% | 14.4% | 18.7% | 15.7% | 12.1% | 14.3% |
| ROCE | 5.3% | 5.3% | 2.2% | 3.7% | 4.0% | 22.9% | 7.6% | 7.0% | 4.5% | 3.7% | 4.3% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.35 | 0.35 | 0.49 | 0.45 | 0.49 | 0.43 | 0.37 | 0.30 | 0.22 | 0.21 | 0.24 |
| Debt / EBITDA | 1.83 | 1.83 | 6.49 | 4.74 | 4.63 | 1.37 | 1.70 | 1.29 | 1.10 | 1.28 | 1.28 |
| Net Debt / Equity | — | 0.09 | 0.13 | -0.30 | 0.21 | 0.20 | 0.10 | -0.05 | -0.19 | -0.20 | -0.10 |
| Net Debt / EBITDA | 0.50 | 0.50 | 1.65 | -3.17 | 2.02 | 0.65 | 0.47 | -0.19 | -0.94 | -1.21 | -0.50 |
| Debt / FCF | — | 0.68 | 0.91 | -16.14 | 1.91 | 1.11 | 0.52 | -0.25 | -1.03 | -1.40 | -0.81 |
| Interest Coverage | 6.26 | 6.26 | 2.11 | 3.07 | 4.50 | 23.67 | 17.19 | 19.85 | 15.87 | 13.37 | 15.83 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | — | — | 0.32 | 0.46 | 0.22 | 0.23 | — | — | 6.76 | 5.41 | 4.37 |
| Quick Ratio | — | — | 0.32 | 0.46 | 0.22 | 0.23 | — | — | 14.19 | 11.72 | 9.82 |
| Cash Ratio | — | — | 0.26 | 0.39 | 0.17 | 0.17 | — | — | 5.30 | 4.55 | 3.44 |
| Asset Turnover | — | 0.46 | 0.41 | 0.36 | 0.51 | 0.56 | 0.55 | 0.54 | 0.40 | 0.44 | 0.47 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | — | — | — | — | — | — | — | — | — | — |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 3.2% | 3.5% | 3.4% | 3.2% | 3.9% | 2.4% | 3.4% | 2.8% | 3.5% | 2.5% | 3.2% |
| Payout Ratio | 35.9% | 35.9% | 168.3% | 99.9% | 82.5% | 17.2% | 28.5% | 26.7% | 37.6% | 37.7% | 38.4% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 8.8% | 9.8% | 2.0% | 3.2% | 4.7% | 14.2% | 11.9% | 10.7% | 9.4% | 6.7% | 8.4% |
| FCF Yield | 11.0% | 12.0% | 10.4% | 1.3% | 9.3% | 12.2% | 16.6% | 12.2% | 13.3% | 7.9% | 8.8% |
| Buyback Yield | 1.8% | 1.9% | 1.1% | 1.1% | 7.8% | 1.1% | 2.4% | 0.0% | 0.4% | 0.0% | 0.0% |
| Total Shareholder Yield | 4.9% | 5.4% | 4.4% | 4.3% | 11.7% | 3.6% | 5.8% | 2.9% | 3.9% | 2.5% | 3.2% |
| Shares Outstanding | — | $104M | $104M | $105M | $107M | $111M | $113M | $114M | $113M | $112M | $111M |
Includes 30+ ratios · 19 years · Updated daily
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Quick answers to the most common questions about buying FAF stock.
First American Financial Corporation's current P/E ratio is 11.3x. The historical average is 16.2x. This places it at the 38th percentile of its historical range.
First American Financial Corporation's current EV/EBITDA is 7.2x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 7.8x.
First American Financial Corporation's return on equity (ROE) is 11.9%. The historical average is 8.6%.
Based on historical data, First American Financial Corporation is trading at a P/E of 11.3x. This is at the 38th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
First American Financial Corporation's current dividend yield is 3.16% with a payout ratio of 35.9%.
First American Financial Corporation has 95.6% gross margin and 11.1% operating margin. Operating margin between 10-20% is typical for established companies.
First American Financial Corporation's Debt/EBITDA ratio is 1.8x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
Residential volume lock-in
Metrics are mathematically derived from official filings.
Combined Ratio Volatility Masks Core Strength
FAF's combined ratio swung from 110.3% in 2024Q3 to 14.2% in 2026Q2, driven by a loss ratio collapse to 6.3%, per recent SEC filings, suggesting reserve releases and mix shift are masking underlying underwriting volatility.
The dramatic improvement in the combined ratio appears largely attributable to favorable reserve development and a shift toward lower-risk commercial business, as the loss ratio fell to 6.3% in Q2 2026 from 45.4% in Q4 2024. However, the expense ratio has been erratic, swinging from 81.9% in Q4 2025 to -67.2% in Q1 2026, indicating that the reported combined ratio is not a reliable indicator of core underwriting profitability. Investors should monitor the loss ratio trajectory excluding reserve releases to assess the sustainability of underwriting margins.
ROE Recovery Hinges on Non-Operating Gains
ROE improved to 3.9% in Q2 2026 from -2.1% in Q4 2024, but net income of $218.5M was achieved despite negative operating income, as reported in financial statements, suggesting earnings quality is heavily reliant on reserve releases and investment gains.
The decomposition of ROE reveals that underwriting profits are minimal, with the underwriting margin at -13.2% in Q2 2026, while investment income on float likely provides the bulk of earnings. The sharp improvement in ROE from 1.4% in Q4 2024 to 3.9% in Q2 2026 appears driven by non-operating items, as operating income was negative. This suggests that the reported ROE may overstate the company's core profitability, and investors should adjust for reserve releases to gauge sustainable returns.
Underwriting Leverage Appears Conservative
With a debt-to-equity ratio of 0.31% and equity growing to $5.6B in Q2 2026, FAF's underwriting leverage appears conservative, according to recent SEC filings, providing ample capacity to absorb cyclical downturns in title volumes.
The premium-to-surplus ratio is not directly provided, but the minimal debt and strong equity base suggest that FAF is operating with significant financial flexibility. The low D/E of 0.31% in Q2 2026, down from 0.58% in Q4 2024, indicates a fortress-like balance sheet that can support underwriting through the housing cycle. However, the high fixed costs of maintaining title plants mean that leverage could rise if premiums decline sharply, so investors should monitor the ratio of net premiums written to surplus as volumes fluctuate.
Valuation Discount Reflects Cyclicality
FAF trades at a P/B of 1.41 versus FNF's 1.56 and STC's 1.19, with a P/E of 12.5 versus FNF's 23.3, as per peer data, suggesting the market prices FAF at a discount due to its higher sensitivity to residential volumes.
The P/B discount to FNF appears justified given FAF's smaller scale and lower ROE (3.9% vs. 8.5% for FNF), but the P/E discount is more pronounced, likely reflecting the market's skepticism about earnings quality given the reliance on non-operating gains. FAF's forward P/E of 10.77 implies the market expects earnings to normalize, but the sustainability of commercial strength and reserve releases remains uncertain. The discount to FNF may narrow if FAF's digital investments (Endpoint) begin to drive structural cost savings, but this is not yet evident in the expense ratio.
Combined Ratio Misleads Without Reserve Adjustments
The combined ratio is the most misapplied metric for FAF, as reserve releases and investment gains can mask underlying underwriting losses, per financial statements, so investors should use the combined ratio excluding reserve development and focus on core loss ratios.
In Q2 2026, the combined ratio of 14.2% is artificially low due to a loss ratio of 6.3%, which is far below historical norms and likely reflects favorable prior-year reserve development. This obscures the fact that the underlying loss ratio for current accident year may be closer to 35-40%, as seen in prior quarters. Similarly, the negative expense ratio in Q1 2026 suggests accounting anomalies that distort the metric. Investors should adjust the combined ratio for reserve releases and use a normalized loss ratio to assess true underwriting profitability, especially given the cyclicality of title insurance.