First Acceptance (FACO) AI Stock Analysis

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First Acceptance

(OTC:FACO)

74Outperform

First Acceptance's strong financial performance, highlighted by robust revenue growth and effective cash management, drives the overall score. The stock's technical indicators show upward momentum, though caution is warranted due to overbought signals. The low P/E ratio suggests the stock is undervalued, providing potential upside opportunities.

First Acceptance (FACO) vs. S&P 500 (SPY)

Market Cap

$135.82M

Dividend YieldN/A

Average Volume (3M)9.15K

Price to Earnings (P/E)5.3

Beta (1Y)0.20

Revenue Growth14.76%

EPS Growth-64.33%

CountryUS

Employees633

SectorFinancial

Sector Strength80

IndustryInsurance - Specialty

Share Statistics

EPS (TTM)0.67

Shares Outstanding38,150,906

10 Day Avg. Volume5,179

30 Day Avg. Volume9,155

Financial Highlights & Ratios

PEG Ratio0.00214

Price to Book (P/B)N/A

Price to Sales (P/S)0.01

Price to Cash Flow (P/CF)0.10

P/FCF Ratio0.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

First Acceptance Business Overview & Revenue Model

Company DescriptionFirst Acceptance Corporation (FACO) is a leading provider of personal automobile insurance and other related products. The company primarily operates within the non-standard auto insurance sector, offering products that cater to individuals who may be considered higher-risk drivers due to factors such as driving history, lack of prior insurance, or credit issues. First Acceptance aims to provide affordable and accessible insurance solutions that meet the needs of this specific market segment.

How the Company Makes MoneyFirst Acceptance makes money through the sale of insurance policies, primarily focusing on non-standard auto insurance. The company generates revenue by collecting premiums from policyholders, which are set based on the level of risk associated with the insured individual and the coverage provided. Key revenue streams include policy premiums, policy fees, and commissions. Additionally, First Acceptance partners with a network of agents and brokers to distribute its products, expanding its reach to a broader customer base. Investment income from the reserves held to pay future claims also contributes to the company's earnings.

First Acceptance Financial Statement Overview

Summary

First Acceptance shows a robust financial recovery and sound cash management, with strong revenue growth and improved profitability. The balance sheet remains stable, though with some fluctuations in equity. The company demonstrates effective cash flow management, positioning it well for future growth. However, challenges remain in operational efficiency, as highlighted by the 0% EBIT margin.

Income Statement

Positive

First Acceptance has demonstrated a strong recovery in its income statement metrics. The revenue growth rate from 2023 to 2024 was approximately 14.7%, showing a consistent upward trajectory. The net profit margin improved significantly from 2022's negative figure to 4.7% in 2024. However, the EBIT margin was 0% in 2024, indicating some challenges in operational efficiency. EBITDA margin was 6.9%, showing reasonable profitability before interest, taxes, depreciation, and amortization.

Balance Sheet

Positive

The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.27, indicating a manageable level of debt. The equity ratio was 24.9%, suggesting a reasonable proportion of equity financing. Return on Equity (ROE) was 15.5% in 2024, reflecting good profitability relative to shareholder equity. However, the company's equity position has been fluctuating, which could pose potential risks.

Cash Flow

Positive

The cash flow statements show strong management of cash resources. Free cash flow grew significantly by approximately 527.7% from 2022 to 2023, and further increased in 2024. The operating cash flow to net income ratio was 1.98 in 2024, indicating good cash generation relative to net income. The free cash flow to net income ratio was 1.97, further demonstrating effective cash flow management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
559.43M	487.54M	302.30M	285.25M	269.58M
	Gross Profit
559.43M	487.54M	302.30M	285.25M	269.58M
	EBIT
0.00	2.38M	-22.03M	-2.58M	13.64M
	EBITDA
38.61M	105.40M	-16.32M	999.00K	15.86M
	Net Income Common Stockholders
26.29M	73.91M	-17.49M	-1.23M	10.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
173.08M	302.67M	162.40M	180.49M	195.19M
	Total Assets
680.39M	570.37M	355.94M	322.65M	340.95M
	Total Debt
45.40M	46.02M	55.30M	51.97M	52.92M
	Net Debt
-31.12M	-63.76M	6.23M	-8.86M	4.67M
	Total Liabilities
510.83M	428.52M	55.30M	51.97M	52.92M
	Stockholders Equity
169.56M	141.85M	65.52M	92.90M	111.69M
Cash Flow		Free Cash Flow
51.79M	83.82M	-8.10M	-10.46M	-1.59M
	Operating Cash Flow
52.12M	85.16M	-3.89M	-6.60M	497.00K
	Investing Cash Flow
-75.53M	-24.53M	-7.22M	34.48M	-18.52M
	Financing Cash Flow
-446.00K	83.00K	-642.00K	-15.30M	-7.03M

First Acceptance Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price3.56

Price Trends

50DMA

3.38

Positive

100DMA

3.29

Positive

200DMA

3.45

Positive

Market Momentum

MACD

0.14

Negative

RSI

71.60

Negative

STOCH

63.40

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FACO, the sentiment is Neutral. The current price of 3.56 is below the 20-day moving average (MA) of 3.67, above the 50-day MA of 3.38, and above the 200-day MA of 3.45, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 71.60 is Negative, neither overbought nor oversold. The STOCH value of 63.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FACO.

First Acceptance Risk Analysis

First Acceptance disclosed 20 risk factors in its most recent earnings report. First Acceptance reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

First Acceptance Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FACO	74 Outperform	$135.82M	5.28	16.89%	―	14.76%	-64.33%
SBFG	71 Outperform	$124.62M	11.14	9.08%	2.99%	6.80%	-2.85%
RMBI	71 Outperform	$127.63M	13.26	7.00%	4.69%	18.48%	2.14%
UNB	65 Neutral	$127.22M	14.57	13.25%	5.14%	14.75%	-22.44%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%
CFBK	61 Neutral	$125.39M	9.49	8.05%	1.33%	10.13%	-21.30%
CZWI	55 Neutral	$133.56M	9.98	7.80%	2.69%	5.41%	7.23%

* Financial Sector Average

Performance Comparison

FACO

First Acceptance

3.56

0.79

28.52%

CFBK

CF Bankshares

19.60

0.87

4.64%

CZWI

Citizens Community Bancorp

13.37

1.90

16.56%

SBFG

SB Financial Group

19.07

5.73

42.95%

UNB

Union Bankshares

28.03

-0.57

-1.99%

RMBI

Richmond Mutual Bancorporation

12.16

0.96

8.57%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.