<div id="readability-page-1"><div><p>First American Financial (FAF) has followed up its earnings rebound with trailing 12‑month revenue of about US$7.5 billion and basic EPS of US$6.02, alongside year‑over‑year reported earnings growth of very roughly 4x and a net profit margin of 8.3% versus 2.1% a year earlier. The company has seen quarterly revenue move from US$1,406.1 million in Q3 2024 to US$1,685.1 million in Q4 2024 and then to US$2,049.7 million in Q4 2025, with basic EPS shifting from a loss of US$1.00 in Q3 2024 to US$0.70 in Q4 2024 and then US$2.06 in Q4 2025. This sets up the Q1 2026 release against a backdrop of sharply improved profitability. For investors, the current numbers point to a business where margins have moved from being a concern to becoming a key focus of the story.</p> <p>See our full analysis for First American Financial.</p><p>With the latest earnings context in place, the next step is to see how these results line up with the most widely held narratives about First American Financial and where the data pushes back on those stories.</p> <p>See what the community is saying about First American Financial</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/66c014b3-956c-465f-9bae-278fefd7614d/chart/earnings-and-revenue-history/query-ZGF0ZT0yMDI2LTA0LTI0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/66c014b3-956c-465f-9bae-278fefd7614d/chart/earnings-and-revenue-history/query-ZGF0ZT0yMDI2LTA0LTI0"/><figcaption>NYSE:FAF Earnings &amp; Revenue History as at Apr 2026</figcaption></figure> <h2>Four straight quarters above US$1.5b revenue</h2> <ul> <li>Over the last four reported quarters, revenue ranged from US$1,582.3 million in Q1 2025 up to US$2,049.7 million in Q4 2025, keeping the run rate above US$1.5b throughout the year.</li> <li>Analysts' consensus view that diverse revenue streams can smooth out real estate cycles is partly backed by this steady revenue band, yet:     <ul> <li>Trailing twelve month revenue sits at US$7.5b compared with US$5,872.3 million a year earlier, while the narrative still flags sensitivity to home affordability and mortgage rates.</li> <li>Commercial strength is highlighted as a support for earnings stability, but the same consensus also points out that unusually high fee deals could fade, which is not directly visible in the top line figures alone.</li> </ul> </li> </ul> <h2>EPS climbs from loss to US$6.02 TTM</h2> <ul> <li>Basic EPS moved from a loss of US$1.00 in Q3 2024 to US$2.06 in Q4 2025, and on a trailing twelve month basis reached US$6.02 alongside net income of US$621.8 million.</li> <li>What stands out for the bullish narrative is that this sharp earnings swing, with reported earnings up about 4x year over year and net margin at 8.3%, aligns with claims about tech investment and automation supporting higher margins, yet:     <ul> <li>The same consensus expects profit margins to ease slightly to 8.2% over time, so current levels leave limited room for further expansion if that view proves accurate.</li> <li>Home Warranty and commercial segments are described as important margin supports, but favorable loss ratios and unusually strong commercial activity are flagged as temporary, which contrasts with the very strong recent earnings profile.</li> </ul> </li> </ul><p> On this kind of earnings swing, many bulls argue the margin story is just getting started, while others worry it rests on conditions that may not last, and that tension is front and center in the full bull case <strong>🐂 First American Financial Bull Case</strong></p><h2>P/E of 11.3x versus US$12.86 DCF value</h2> <ul> <li>With the share price at US$68.84, the stock trades on a P/E of 11.3x, slightly above the 10.1x peer average and well above the DCF fair value of US$12.86 shown in the dataset.</li> <li>Critics highlight this valuation gap as a key bearish point, arguing that the price already reflects a lot of good news, and the data here gives them material support because:     <ul> <li>The stock sits below the consensus analyst target of US$82.00, yet the large spread between the current price and the DCF fair value suggests very different views on long term cash generation.</li> <li>The 3.2% dividend yield and the 8.3% net margin can support income and profitability narratives, but do not on their own close the gap between the market price and the DCF fair value figure.</li> </ul> </li> </ul><p> If you are weighing whether the current P/E and dividend justify the premium to DCF fair value, it helps to see how skeptics frame that risk in their detailed bear case <strong>🐻 First American Financial Bear Case</strong></p><h2>Next Steps</h2> <p>To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for First American Financial on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.</p> <p>With both bullish and cautious views laid out, the real question is where you land once you have looked through the numbers yourself. If you want a quick way to see what others are optimistic about, start with the 4 key rewards</p> <h2>See What Else Is Out There</h2> <p>The key concern is that the share price of US$68.84 and P/E of 11.3x sit well above the DCF fair value of US$12.86, which raises valuation questions.</p> <p>If that kind of valuation gap makes you uneasy, you may wish to compare this setup with companies that appear more compelling on price and fundamentals by checking the 54 high quality undervalued stocks.</p> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><h3><strong>New: </strong>AI Stock Screener &amp; Alerts</h3><p>Our new AI Stock Screener scans the market every day to uncover opportunities.</p><div><p>• Dividend Powerhouses (3%+ Yield)<br/>• Undervalued Small Caps with Insider Buying<br/>• High growth Tech and AI Companies</p><p>Or build your own from over 50 metrics.</p></div><p>Explore Now for Free</p></div></div></div>

<p>First American Financial (FAF) has reported a significant earnings rebound, with trailing 12-month revenue of approximately $7.5 billion and basic EPS of $6.02, reflecting a year-over-year earnings growth of about 4x and a net profit margin increase to 8.3%. The company has consistently generated quarterly revenues above $1.5 billion, with a notable rise in EPS from a loss of $1.00 in Q3 2024 to $2.06 in Q4 2025. Despite bullish narratives surrounding profitability, concerns about sustainability and valuation gaps remain, as the stock trades at a P/E of 11.3x, above the peer average and significantly higher than its DCF fair value of $12.86.</p>

First American Financial (FAF) Margin Rebound Tests Bullish Profitability Narratives Ahead Of Q1 2026