📊 AI Stock Rating — Summary

First American Financial Corporation reported quarterly revenue of approximately $1.98 billion for the period ending September 30, 2025, with a net income of $189.6 million, resulting in an EPS of $1.84. The company's free cash flow stood at $223.1 million. During the year, the company maintained stable year-over-year growth, positively contributing to their stable operating performance and financial position. FAF continues to exhibit strong profitability with a solid net margin and operational cash flow quality. The balance sheet showed a healthy equity position, and net debt was effectively negative, demonstrating strong liquidity. The company maintained its regular dividend payouts, totaling quarterly distributions of approximately $0.54 to $0.55 per share throughout 2025. The offering of stock repurchases further signals an ongoing commitment to shareholder returns. With analyst price targets ranging up to $76, further upside potential could be realized compared to prevailing valuations.

AI Score Breakdown

Revenue Growth — Score: 7/10

Revenue grew modestly, reflecting stable year-over-year growth mainly driven by the company's core operational areas. While no explosive growth was noted, the consistency contributes positively to the stability of earnings.

Profitability — Score: 8/10

Profit margins are robust with net income at $189.6 million, yielding a healthy EPS of $1.84. These figures suggest efficiency in operations and effective cost management.

Cash Flow Quality — Score: 8/10

Strong free cash flow generation of $223.1 million highlights quality and consistency in cash flows, supporting stable dividend payments and share repurchases, indicating a sound liquidity position.

Leverage & Balance Sheet — Score: 9/10

The balance sheet is solid with total equity at $5.33 billion and net debt being negative, which indicates excellent financial resilience and liquidity, underscored by a substantial cash position.

Shareholder Returns — Score: 7/10

With steady dividends and stock repurchases, shareholder returns were supported despite no significant price appreciation over the last year. Dividends and repurchase activities demonstrate commitment to returning value to shareholders.

Analyst Sentiment & Valuation — Score: 8/10

Valuation appears fair, with analyst price targets reaching up to $76, suggesting potential upside. The lack of extreme valuation ratios indicates the stock is neither overvalued nor undervalued, with analyst sentiment reflecting stability.

⚠ AI-generated — informational only, not financial advice.