First Advantage (FA) Upgraded to Buy: Here's Why

Core Viewpoint - First Advantage (FA) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to stock price fluctuations [4]. Business Improvement Indicators - The upgrade in Zacks Rank for First Advantage suggests an improvement in the company's underlying business, which is expected to drive the stock price higher [5][10]. - Over the past three months, the Zacks Consensus Estimate for First Advantage has increased by 3.3%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - First Advantage's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].