Shares of First American Financial (FAF) soared 5.87% in pre-market trading on Thursday, following the company's impressive second-quarter earnings report released after market close on Wednesday. The title insurance and settlement services provider significantly outperformed analyst expectations, demonstrating robust growth across its key business segments.

First American reported adjusted earnings per share of $1.53 for Q2 2025, handily beating the analyst estimate of $1.35 and marking a 20.5% increase from the same period last year. The company's revenue surged 14% year-over-year to $1.84 billion, surpassing the expected $1.75 billion. This strong performance was primarily driven by exceptional results in the commercial and home warranty businesses.

The company's commercial revenue jumped 33% to $234 million, with the average revenue per U.S. commercial order increasing from $11,700 to $15,300. The Home Warranty segment also delivered impressive results, with its adjusted pretax margin improving to 20.7% from 15.2% a year ago. Additionally, First American's operating cash flow grew 33.5% to $355 million compared to Q2 2024, supporting continued share repurchases and a steady dividend.

Following the earnings release, KBW analyst Bose George maintained a Buy rating on First American Financial with a price target of $77.00, further boosting investor confidence. The company's strong performance, coupled with its ongoing technology investments and active capital return to shareholders, positions it well to capitalize on an expected upcycle in the real estate market. As First American continues to navigate the evolving real estate landscape, investors appear optimistic about its future prospects, as reflected in the significant pre-market stock surge.