First Advantage combines dominant enterprise screening scale, ahead-of-schedule Sterling synergies, and Digital Identity growth with a credible five-year path to $39.21.
Overview
First Advantage is a global human-capital risk management software and data provider offering background screening, identity verification, credential validation, drug and health testing, and continuous monitoring. Its transaction-based revenue model is embedded in customer HR workflows, with enterprise clients representing the strategic core. The company processes more than 200 million screens annually across over 200 countries and territories, serves approximately two-thirds of the Fortune 100 and more than half of the Fortune 500, and maintains a proprietary database of more than one billion records. **The Sterling Check acquisition created a scaled enterprise leader with substantial synergy and deleveraging potential.** Q1 2026 revenue rose 8.6% year over year to $385.2 million, while Adjusted EBITDA increased 14.3% to $105.3 million and margin expanded 130 basis points to 27.3%. Management reaffirmed FY2026 revenue guidance of $1,625 million–$1,700 million and Adjusted EPS guidance of $1.15–$1.25. At $22.31, the stock traded at 18.6x midpoint adjusted EPS guidance, despite a misleading 392.6x trailing GAAP P/E caused by acquisition amortization. Near-term catalysts include Q2 results on August 6, 2026, further Sterling synergies, debt paydown, Digital Identity growth, and S&P SmallCap 600 index inclusion.