FAF Logs Fourth Beat as Squarepoint Exits 128K Shares
First American Financial (FAF) has beaten EPS estimates in each of its last four quarters, yet the stock at $71.78 has not recovered to the $74.99 level at which the Chief Accounting Officer sold open
FAF Logs Fourth Beat as Squarepoint Exits 128K Shares
NEW YORK, September 12 —
First American Financial Corporation (FAF) has beaten EPS estimates in each of its last four reported quarters, yet the stock at $71.78 sits below the $74.99 at which the Chief Accounting Officer sold shares open-market two days after Q2 results. Squarepoint Ops added 128,057 shares to the exit column this week.
- Four-quarter EPS beat streak: Q2 delivered $2.08 actual vs $1.84 estimate, a 13.1% positive surprise.
- $2.34B trailing FCF; 9.7x forward P/E; $87.67 analyst consensus vs $71.78 current; $15.89 implied gap.
- CAO Steven Adams sold 3,252 shares at $74.99 on July 24; the stock has not recovered to that exit level.
The Beat That Keeps Compressing
Four consecutive positive EPS surprises is a strong operational record for a company operating in two inherently cyclical segments: title insurance on residential and commercial property transactions (closing, escrow, and appraisal services included) and residential home warranty contracts covering HVAC systems and appliances. The beat streak has been narrowing, from a peak of 39.1% in one quarter to 26.6%, then 13.1% in the most recent print. That trajectory, across four quarters in which trailing revenue grew 15% to $7.98 billion, raises the question of whether the outperformance cycle has already peaked.
Two Sellers Above the Market
Steven A. Adams, FAF's VP and Chief Accounting Officer, sold 3,252 shares open-market at $74.99 on July 24, per his Form 4 filing, two days after the Q2 earnings 8-K; the stock has not recovered to that level since. Squarepoint Ops, per a MarketBeat report published September 11, then disclosed selling 128,057 shares. Together, these two disposals sit above where the stock currently trades, a visible tension against the $87.67 analyst consensus target.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| FAF | $7.3B | 9.7x | +7.6% |
| FNF | $11.8B | 7.6x | -23.8% |
| STC | $2.0B | 9.1x | -11.0% |
| ORI | $9.9B | 12.4x | +2.7% |
| AFG | $11.8B | 11.7x | +1.9% |
| THG | $7.9B | 11.6x | +27.9% |
What Closes the Gap
The arithmetic is hard to ignore: $2.34 billion in trailing free cash flow against a $7.33 billion market cap and a 9.7x forward P/E that prices in very little growth. Run the numbers through the DCF calculator and the value case comes together fast. The real test is whether the EPS beat magnitude in the next reported quarter holds near 13.1% or compresses into single digits; if the latter, those two sellers will look prescient rather than merely impatient. Run the free First American Financial Corporation deep-dive →
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
First American Financial (FAF) has beaten EPS estimates in each of its last four quarters, yet the stock at $71.78 has not recovered to the $74.99 level at which the Chief Accounting Officer sold open-market two days after Q2 results. This week, institutional holder Squarepoint Ops reported selling 128,057 shares — adding a new data point to a pattern in which the most-informed sellers have consistently exited above where the stock trades today.