Start here if you're new
what it is
First Advantage sells background checks and identity verification so employers can hire people without guessing.
how it gets paid
Last year First Advantage made $1.6B in revenue. Criminal background checks was the main engine at $0.56B, or 35% of sales.
why it's growing
Revenue grew 83.0% last year. EDGAR shows revenue rose 182% vs. prior year to $1.2 billion in the latest quarter.
what just happened
Revenue hit $1.2B, but EPS was still negative at -$0.22.
At a glance
B balance sheet — gets the job done, barely
1.4% return on capital — nothing to write home about
-$0.20 fy2025 eps est
$2B fy2026 rev est
8.4% operating margin
xvary composite: 41/100 — below average
What they do
First Advantage sells background checks and identity verification so employers can hire people without guessing.
This business wins because hiring is a compliance problem, not a shopping problem. First Advantage has 80,000 customers globally and 10,000 employees, which means your HR team can run checks, drug screens, and identity verification in one place. That scale matters when employers want speed and fewer hiring mistakes.
How they make money
$1.6B
annual revenue · their business grew +83.0% last year
Criminal background checks
$0.56B
Identity and verification
$0.32B
Drug, health, and healthcare screening
$0.24B
Education, work history, and driver compliance
$0.28B
Post-onboarding monitoring and other
$0.20B
The products that matter
core hiring workflow
Background Screening
~$1.2B mapped revenue
This is the center of gravity. If employers are adding staff, FA gets paid to check history, credentials, and compliance requirements before day one.
core volume driver
faster-growing identity checks
Identity & Verification
~$400M mapped revenue
This business grew 17% in the source set on this page. It matters because fraud prevention and digital onboarding are less cyclical than pure hiring checks, which gives FA a better mix if management can keep scaling it.
faster growth
cost discipline after acquisitions
Integration Execution
$40M–$50M targeted cost savings
This is not a product you can buy. It is still one of the biggest drivers of the stock. If management captures the promised savings from Sterling, margins improve. If not, you are left with the debt and the slide deck.
margin test
Key numbers
$2.1B
long-term debt
Debt this large matters because it is bigger than one full year of revenue growth and equals 52% of capital, per.
8.4%
operating margin
Operating margin → profit left after running the business → so what: there is not much cushion if costs rise.
1.4%
return on capital
Return on capital → profit generated from money invested → so what: this is a weak payoff for a company carrying $2.1 billion of debt.
$1.6B
ttm revenue
That revenue base shows the company has real scale now, but scale without earnings is just a larger math problem.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- long-term debt $2.1B (52% of capital)
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for FA right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Revenue hit $1.2B, but EPS was still negative at -$0.22.
EDGAR shows revenue rose 182% vs. prior year to $1.2 billion in the latest quarter, while EPS fell to -$0.22. More sales helped the top line, but profit did not follow.
$1.2B
revenue
$0.22
eps
8.4%
operating margin
the number that mattered
The number that matters is -$0.22 in quarterly EPS, because a business doing $1.2 billion in quarterly revenue should not look this fragile.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
FA is tied to hiring, acquisitions, and compliance. That means the risks are specific, not theoretical: fewer background checks, missed cost savings, tighter data rules, or a balance sheet that leaves less room for error.
med
Hiring slows and screening volume follows it down
Background screening is not optional for many employers, but volume still tracks hiring. If companies stop adding staff, FA processes fewer checks. This is the most direct way the story breaks.
Stated impact on this page: 20–30% of annual revenue at risk, or about $320M–$480M.
med
Sterling integration misses the promised cost savings
Management has pointed to $40M–$50M of acquisition-related cost savings. If those savings arrive late or smaller than promised, margin improvement stalls and the acquisition math looks much less attractive.
The page source ties those savings to about 50 basis points of EBITDA margin expansion in 2026.
med
Data privacy rules get stricter and more expensive
Screening businesses live inside sensitive personal data. New privacy rules or narrower data access would raise compliance costs and slow workflows. That hurts both margins and throughput.
The impact estimate in the source set is 100–200 basis points of annual margin pressure.
med
Debt turns a slow patch into a patience test
$2.1B of long-term debt equals 52% of capital. That is manageable when execution is clean. It matters a lot more if hiring softens and acquisition benefits take longer to show up.
This is why the balance sheet is a B, not a free pass.
What would change our mind: revenue tracking below the $1.625B low end of guidance, or the promised Sterling cost savings failing to appear while debt stays elevated. That would turn a cheap-looking stock into a value trap wearing a tie.
source: institutional data · regulatory filings · risk analysis
Pay attention to
the number that mattered
Guide versus reality
Management set FY2026 revenue at $1.625B–$1.7B and EPS at $1.15–$1.25. If you own FA, this is the scoreboard. Beating the low end is the minimum. Beating the midpoint is how the rerating case gets real.
calendar
Quarterly hiring volume
You are looking for signs that employer screening demand is holding up across the year, not just in one quarter. FA is tied to recruiting activity whether management says it softly or not.
trend
Buyback pace
A $100M authorization is meaningful against a roughly $2B market cap. The street sees the announcement. You should watch whether the share count actually starts shrinking.
risk
Sterling cost savings and debt
The quiet part: acquisition math only works if the savings show up quickly enough to offset the extra complexity. If cost savings disappoint while debt stays at $2.1B, equity holders carry the discomfort.
Analyst rankings
risk profile
average
risk rank 3 — typical risk profile — neither especially safe nor risky.
chart momentum
bottom 5%
momentum rank 5 — the lowest rating — significant underperformance expected.
source: institutional data
Institutional activity
institutional ownership data for FA is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$12
current price
n/a
target midpoint · n/a from current
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive