MODEL VERDICT
First American Financial Corporation (FAF)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.33 | $68.52 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.34 | $70.87 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.23 | $66.00 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.23 | $63.79 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.24 | $63.31 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 8 industry peers | $56.36 | -17.7% | 30% | A | Peer Data |
| Price / Book 8 industry peers | $63.57 | -7.2% | 25% | B | Model Driven |
| Forward P/E 8 analyst estimates | $55.69 | -18.7% | 15% | A- | Analyst Est. |
| Dividend Yield 7 industry peers | $77.31 | +12.8% | 10% | B | Supplementary |
| Earnings Yield 8 industry peers | $56.28 | -17.9% | 8% | B | Data |
| Price / Tangible Book 7 bank peers | $41.13 | -40.0% | 5% | B+ | Bank Primary |
| Price / Sales 8 industry peers | $227.33 | +231.8% | 4% | B | Model Driven |
| EV/EBITDA 8 industry peers | $72.78 | +6.2% | 3% | A- | Peer Data |
| Weighted Output Blended model output | $71.00 | +3.6% | 100% | 89 | FAIRLY VALUED |
| EPS Growth ↓ | P/E Multiple → | 7× | 9× | 11× (Current) | 13× | 15× |
|---|---|---|---|---|---|
| Bear Case (2%) | $43 | $55 | $67 | $80 | $92 |
| Conservative (5%) | $44 | $57 | $69 | $82 | $95 |
| Base Case (-0.5%) | $42 | $54 | $66 | $78 | $90 |
| Bull Case (-1%) | $42 | $54 | $66 | $77 | $89 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 19.58 | 10.24 | 7.02 | 49.56 | 15.86 |
| EV/EBIT | 10.95 | 7.01 | 5.80 | 22.63 | 6.29 |
| EV/EBITDA | 9.65 | 6.61 | 5.53 | 19.12 | 5.08 |
| P/FCF | 17.91 | 8.36 | 6.01 | 74.15 | 24.84 |
| P/FFO | 11.08 | 7.93 | 6.23 | 19.24 | 5.23 |
| P/TBV | 2.36 | 2.19 | 1.78 | 3.00 | 0.44 |
| P/AFFO | 24.08 | 9.81 | 7.03 | 54.18 | 20.46 |
| P/B Ratio | 1.32 | 1.32 | 1.16 | 1.51 | 0.15 |
| Div Yield | 0.03 | 0.03 | 0.02 | 0.04 | 0.00 |
| P/S Ratio | 0.95 | 0.95 | 0.74 | 1.12 | 0.15 |
Based on our peer multiples analysis with 23 valuation metrics, the model estimates FAF's fair value at $71.00 vs the current price of $68.52, implying +3.6% upside potential. Model verdict: Fairly Valued. Confidence: 89/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $71.00 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $58.91 (P10) to $90.46 (P90), with a median of $73.92.
FAF's current P/E of 11.4x compares to the industry median of 9.4x (8 peers in the group). This represents a +21.6% premium to the industry. The historical average P/E is 19.6x over 7 years. Signal: Premium.
15 analysts cover FAF with a consensus rating of Buy. The consensus price target is $83.00 (range: $80.00 — $85.00), implying +21.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (11), Hold (3), Sell (1), Strong Sell (0).
The model confidence score is 89/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (4), and model agreement (10). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that FAF's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.8σ, meaning margins are 0.8 standard deviations above their historical average. If margins revert to the 7-year mean (7.5%), the model estimates fair value drops by 1450.0% to approximately $78. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.