FAF — First American Financial Corporation

Deep-value analysis — FAF (First American Financial Corporation)

Date: 2026-09-02 · Mode: REFRESH over the 2026-07-28 thesis · Reference price: … (tracker, 09/02/2026) · Market cap: 7.51 bn. USD Primary sources: 10-K FY2025 (filed 02/18/2026), 10-Q Q2-2026 (filed 07/23/2026), 10-Q Q2-2025 (07/25/2025), 10-K FY2024 (02/21/2025), XBRL data pack 09/02/2026, research brief 09/02/2026, mc-FAF-20260902.json.

What I inherit and what I re-derive (REFRESH mode note)

The mechanical triage called for a revisit for a single reason: the falsifier “the cyclical recovery after the 2023-2024 low continues” was unverifiable — the script had YoY revenue growth for Q2-2026 (…) but was missing a second consecutive quarter. No new SEC filing appeared after 07/28/2026 (next report: 10/21/2026). The price move (…, from … to 73.28/…) is context, not cause.

Inherited without re-verification (nothing moved in the data): the business description and moat structure, ALTA’s competitive position, the segment structure, the 2023-2024 normalization history, the corporate debt maturity schedule and the absence of any acquisition. I recap them concisely, with the figures re-anchored to 10-K FY2025 / 10-Q Q2-2026.

Fully re-derived:

1. The broken falsifier. From 10-Q Q2-2026 (income statement, six months): H1-2026 revenue = 3,955.3 mn. vs. H1-2025 = 3,423.6 mn. By difference, Q1-2026 = 1,838.0 mn. vs. Q1-2025 = 1,582.3 mn. → … YoY. With Q2-2026 at … (2,117.3 vs. 1,841.3, a figure confirmed directly in the MD&A: “+276.0 mn., or 15.0%”), I have two consecutive quarters of positive revenue growth. The falsifier does NOT trigger — the cyclical recovery holds. The research brief had 1.84 bn. vs. 1.58 bn. for Q1; the filing figures (1,838.0 / 1,582.3) confirm them to rounding.

2. The FCF bridge and cash treatment. Here I found a material error in the reference thesis, corrected in the valuation chapter: the 07/28/2026 report added +… mn. USD of “net cash” to each of the 5 models. That cash isn’t the shareholder’s (proof, below, from the 10-Q). The correction is worth ~…/share, i.e. ~14% of the price, and lowers all the models.

3. The two chapters missing from the reference report — the O’Glove analysis and the Outsider profile — are written here from scratch, on figures from the filings.

4. Monte Carlo rerun with declared assumptions (the old report couldn’t run: sh, px, fx were missing from the tracker; I supplied them explicitly).