GET DAILY SIGNALSFirst Advantage (FA) Reports +13.8% Revenue Growth in Strong Q3 2026
Key Takeaways
- First Advantage reported third quarter 2026 revenue of $465.8 million, up 13.8% year over year and above analyst consensus estimates of roughly $437.7 million.
- Adjusted EBITDA rose 15.2% to $136.5 million, with an adjusted EBITDA margin of 29.3%.
- Adjusted diluted earnings per share climbed 26.7% to $0.38, exceeding consensus estimates of about $0.34.
- On a GAAP basis, net income reached $20.5 million, or $0.12 per diluted share, up from $2.6 million a year earlier.
- Management raised full-year 2026 guidance across every metric and announced a roughly $125 million acquisition of Data Diver Technologies.
Earnings Context and Why It Matters
First Advantage, a global provider of background screening, identity verification, and risk-management services, serves as a useful indicator of hiring trends. Its performance offers insight into labor demand in sectors including retail, transportation, healthcare, and the gig economy. The third quarter marked the two-year anniversary of the Sterling acquisition, giving investors a clear look at whether the combination is delivering ongoing synergies, revenue growth, and margin improvement. With results continuing to exceed broader labor-market signals, this quarter's numbers and updated outlook help clarify whether that strength can carry forward into 2027.
Breaking Down the Reported Results
First Advantage posted revenue of $465.8 million for the third quarter of 2026, a 13.8% increase from $409.2 million in the prior-year period and ahead of the consensus estimate of approximately $437.7 million. Net income rose to $20.5 million, or $0.12 per diluted share, compared with $2.6 million, or $0.01 per share, a year earlier.
Adjusted EBITDA reached $136.5 million, up 15.2% year over year, representing a margin of 29.3%. Adjusted net income grew 28.6% to $67.3 million, while adjusted diluted EPS increased 26.7% to $0.38, topping the consensus estimate of about $0.34. Cash flows from operations totaled $63.8 million.
The quarter benefited from broad volume gains in the Americas, an earlier start to peak holiday hiring, and contributions from customer initiatives launched in the second quarter. Base growth reached 5%, retention held at 96%, and combined upsell, cross-sell, and new logo revenue grew 12.5%. International revenue, roughly 11% of the total, declined 4% year over year due to disruptions in Asia-Pacific markets. I also checked this using Tickeron's AI Screener to see how the stock compares to others in the industry.
Market Reaction and Investor Sentiment
Shares moved modestly higher following the release, reflecting a measured but positive response to the beat-and-raise outcome. The updated guidance, with the low end of the new full-year ranges now exceeding the prior high ends across all metrics, supported confidence in execution. At the same time, some caution remained visible: enterprise bookings fell to 14 from 20 in the prior quarter, retention eased slightly, and international revenue contracted after nine straight quarters of growth. These softer indicators tempered the overall enthusiasm even as the headline figures stood out.
Forward Outlook and Key Factors to Monitor
First Advantage raised its full-year 2026 guidance to revenue of $1.720 billion to $1.745 billion, adjusted EBITDA of $488 million to $498 million, adjusted net income of $227 million to $232 million, and adjusted diluted EPS of $1.30 to $1.33. At the midpoint, this points to roughly 10% revenue growth for the year.
Investors will be watching whether fourth-quarter momentum holds against tougher year-over-year comparisons and a margin outlook that could settle around the mid-28% range. Integration of the newly acquired Data Diver Technologies platform is another area of focus; the deal brings proprietary criminal and court records, an estimated $20 million in annual revenue, and potential synergies, though it will be partly funded through borrowing.
Broader labor-market conditions remain the main external factor, given the company's exposure to customer hiring volumes. Any slowdown in onboarding activity across transportation, retail, or the gig economy could weigh on growth, while sustained enterprise demand and AI-enabled fraud-detection offerings could support longer-term expansion into 2027. From what I see, these trends will be worth monitoring closely in the quarters ahead.
Using AI Tools for Deeper Analysis
In my research process, I often turn to Tickeron's AI-powered tools to cross-check patterns and compare performance across similar companies. The AI Screener helps filter for technical and fundamental signals efficiently, which proved useful when reviewing First Advantage's results alongside industry peers. It offers a practical way to scan for opportunities without manual effort, and I find it integrates well into a broader workflow for names like this one.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Momentum Indicator for FA turns positive, indicating new upward trend
FA saw its Momentum Indicator move above the 0 level on October 12, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 98 similar instances where the indicator turned positive. In 73 of the 98 cases, the stock moved higher in the following days. The odds of a move higher are at 74%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for FA just turned positive on October 12, 2026. Looking at past instances where FA's MACD turned positive, the stock continued to rise in 34 of 49 cases over the following month. The odds of a continued upward trend are 69%.
FA moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for FA crossed bullishly above the 50-day moving average on October 27, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 11 of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 65%.
Following a +5.20% 3-day Advance, the price is estimated to grow further. Considering data from situations where FA advanced for three days, in 211 of 298 cases, the price rose further within the following month. The odds of a continued upward trend are 71%.
The Aroon Indicator entered an Uptrend today. In 164 of 235 cases where FA Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 70%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FA declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 72%.
FA broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 36 (best 1 - 100 worst), indicating steady price growth. FA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 77 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 83, placing this stock better than average.
The Tickeron SMR rating for this company is 88 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 91 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.070) is normal, around the industry mean (6.110). FA has a moderately high P/E Ratio (154.200) as compared to the industry average of (34.427). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.946). FA's Dividend Yield (0.259) is considerably higher than the industry average of (0.025). P/S Ratio (2.252) is also within normal values, averaging (9.907).
The Tickeron PE Growth Rating for this company is 91 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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Industry OfficeEquipmentSupplies
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