First American Financial (NYSE: FAF) is poised to grow, given the increased demand among millennials for first-time home purchases. The expansion of its valuation and data businesses, as well as strength in commercial business and technological upgrades, is expected. These, along with solid growth projections, make the Zacks rank #3 (Hold) stock worth retaining.
An Outperformer
Shares have gained 8.5% in the past month, outperforming the industry's growth of 7.6%, the Finance sector's decline of 1% and the Zacks S&P 500 composite's increase of 0.7%.
Image Source: Zacks Investment Research
Optimistic Growth Projection
The Zacks Consensus Estimate for 2024 earnings is pegged at $3.83, indicating an increase of 0.8% on 4.7% higher revenues of $6.3 billion. The consensus estimate for 2025 earnings is pegged at $5.12, indicating an increase of 33.8% on 10.2% higher revenues of $6.9 billion.
We expect 2026 EPS to witness a three-year CAGR of 11.3%.
Return on Equity
Return on equity (ROE) is a measure of profitability, reflecting how efficiently a company is utilizing its shareholders' funds. FAF's trailing 12-month ROE of 8.2% outperformed the industry average of 7.8%.
Growth Drivers
An increased demand for first-time home purchases among millennials continues to ...