Abstract

First American Financial Corporation will report quarterly results on February 11, 2026 Post Market, with consensus pointing to revenue, margin, and EPS expansion alongside improved operating leverage; our preview synthesizes the latest company forecasts and institutional commentary within the January 01, 2026 to February 04, 2026 window.

Market Forecast

Market-wide expectations, anchored by the company’s latest guidance snapshot, indicate this quarter’s revenue at $1.82 billion, with adjusted EPS at $1.43 and EBIT at $227.00 million; year over year, revenue is projected to grow by 12.58% and EPS by 30.78%, implying margin uplift around the portfolio. Gross profit margin and net profit margin guidance were not explicitly updated by the company; the outlook implies a continuation of last quarter’s efficiency gains, with YoY momentum expected in adjusted EPS and EBIT. The main business highlights emphasize a steady recovery in core title and related services, supported by stabilizing housing turnover and a healthier pipeline; the outlook section underscores improved mix and operating leverage as drivers of this quarter’s earnings quality. The segment with the most promising trajectory centers on information and other fee-based revenue at $0.28 billion last quarter, where scalable data solutions and ancillary services are positioned for above-average YoY growth as activity normalizes.

Last Quarter Review

In the previous reported quarter, First American delivered revenue of $1.98 billion, a gross profit margin of 63.07%, GAAP net profit attributable to shareholders of $0.19 billion, a net profit margin of 9.58%, and adjusted EPS of $1.70, achieving quarter-on-quarter net profit growth of 29.77% and meaningful YoY expansion across key metrics. One notable highlight was a broad-based margin recovery, with EBIT of $286.90 million exceeding the prior estimate and demonstrating improved cost discipline and operational throughput. Main business contributions were led by agency premiums at $0.80 billion and direct premiums and escrow fees at $0.71 billion, while information and other services added $0.28 billion and investment income contributed $0.16 billion, reflecting balanced growth and better earnings mix.

Current Quarter Outlook (with major analytical insights)

Core Title and Settlement Operations

The company’s core title and settlement operations remain the central earnings engine for the quarter, with revenue leverage tied to transaction volumes and fee rates. The projected revenue of $1.82 billion and EPS of $1.43 assume stable to improving residential resale activity and selectively firm commercial pipelines, consistent with the company’s preannounced yardsticks. Operating leverage is expected to improve as fixed and semi-fixed costs are absorbed across a modestly higher throughput, while discipline around agency splits and direct channel efficiency supports gross margin resilience. A key determinant is the pace of order openings converting to closings late in the quarter; if cycle times tighten, the translation to revenue and EPS could overshoot the midpoint of expectations. Conversely, elongated cycle times or mix shifts toward lower-fee transactions would temper the revenue-to-earnings conversion. Net interest income derived from escrow balances and investment income sensitivity to short-term rates serve as supportive tailwinds to segment profitability, albeit with smaller magnitude than volume drivers.

Information and Data-Driven Services

Information and other services at $0.28 billion last quarter have provided a diversifying revenue base with favorable incremental margins due to their relatively low capital intensity and scalable delivery. For the current quarter, management’s forecast framework implies above-company average growth for these services as origination and closing activity normalization lifts demand for property data, analytics, and ancillary closing solutions. The economics of these products typically deliver attractive margin contribution, and the YoY EPS guidance of 30.78% is consistent with improved mix from fee-based ancillary lines. We expect this unit to benefit from enterprise customer renewals and cross-sell into both agency and direct channels. The pace of adoption for premium data sets and workflow integrations will influence the magnitude of margin accretion this quarter. Any slowdown in transaction volumes could soften usage-based fees, but subscription and contractual components should provide a partial cushion.

Key Stock Price Drivers This Quarter

The stock’s reaction will likely hinge on volume momentum into late January and early February closings, as well as the spread between realized fee revenue and the implied run-rate in the company’s $1.82 billion revenue estimate. A second driver is margin quality—investors will parse gross profit margin sustainability relative to last quarter’s 63.07% benchmark and corresponding net profit margin sensitivity around the mid-to-high single-digit range. The third driver is earnings mix: incremental contributions from information services and investment income can lift EPS without equivalent top-line expansion, which could improve valuation optics if EBIT arrives near the $227.00 million marker. Any commentary on expense normalization, technology investments, or agency commission dynamics could shift sentiment. Additionally, clarity on pipeline conversion rates for both residential and commercial transactions will be pivotal for near-term revisions.

Analyst Opinions

Across institutional commentary compiled in the recent period, the balance of opinions leans constructive, with a majority expressing a favorable stance on the company’s near-term setup given improving revenue trajectory and strong EPS elasticity to volumes. Analysts highlighting the projected 12.58% revenue growth and 30.78% EPS expansion emphasize that operational leverage and cost discipline are beginning to reassert margin power after several mixed quarters, and that fee-based ancillary businesses provide a buffer against volume variability. One prevalent view from well-followed sell-side research is that the company’s EBIT estimate of $227.00 million is attainable if closing activity continues to stabilize and the favorable pricing and mix dynamics seen last quarter persist, while cautioning that any slowdown in late-quarter closings could cap upside. The constructive camp underscores that last quarter’s performance—with revenue of $1.98 billion, gross margin at 63.07%, and net profit of $0.19 billion—demonstrated a tangible step-up in execution, supporting the case for ongoing EPS improvement in the upcoming print. In sum, the majority outlook anticipates a modest beat on EPS if volumes track the company’s internal pacing, whereas revenue is expected to land near the company’s projection, with quality of earnings and mix likely to be the focus of post-release discussions.