What's Going On With First Advantage Shares Thursday?

First Advantage Corporation FA shares are trading lower on Thursday. Wolfe Research downgraded the company to a Peer Perform rating from an Outperform rating. In addition, Wolfe withdrew its $20 price target and believes the screening business’s stock is fairly valued, setting a fair value range of $20 to $23.

What To Know: Wolfe Research, in a note, said it remains optimistic in regards to the “structural strength” of First Advantage’s business and believes the company is well-positioned to benefit from long-term trends in vendor consolidation.

Trends in vendor consolidation refer to the increasing tendency of companies to use fewer vendors for services such as screening. On the other hand, Wolfe Research is concerned about the impact of declining employee separation and quit rates on First Advantage’s growth. Wolfe considers these factors more important than job openings or payroll growth.

Lastly, Wolfe views the acquisition of STER, a background check and identity verification company, as beneficial for First Advantage. Some potential benefits Wolfe sees include, “vertical/end market diversification, increased global presence and stronger identity assets.” Wolfe did note concerns that the current price of STER shares may not represent the best value.

Is First Advantage A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like First Advantage‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. First Advantage FA does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on First Advantage will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

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FA Price Action: At the time of publication, First Advantage stock is trading 2.15% lower at $19.36 per data from Benzinga Pro.

Image: 2846221 from Pixabay.