What Happened?
Shares of background screening provider First Advantage (NASDAQ: FA) jumped 3.9% in the morning session after the background-screening provider reported second-quarter 2026 results that beat expectations and raised its full-year financial guidance.
Revenue grew 14.9% year over year to $448.8 million, while adjusted EPS increased 30% to $0.35. Management attributed the strong performance to improving hiring trends across several verticals, particularly in high-volume hiring, as well as the realization of synergies. Buoyed by the first-half results, First Advantage raised its full-year 2026 outlook, now expecting revenue of $1.67 billion to $1.71 billion and adjusted EPS of $1.23 to $1.29.
The company also highlighted its focus on deleveraging, having made $70 million in voluntary debt prepayments between May and early August.
After the initial pop, the shares cooled down to $21.55, up 2.7% from the previous close.
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What Is The Market Telling Us
First Advantage’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 18.8% on the news that the company reported strong fourth-quarter 2025 results that beat analyst expectations on both revenue and profit and issued an optimistic full-year outlook. The background screening provider posted revenue of $420 million, a 36.8% increase from the same period in the previous year and well ahead of Wall Street's forecasts.
Adjusted earnings per share came in at $0.30, also surpassing expectations. Looking ahead, the company's full-year revenue guidance of $1.66 billion at the midpoint was higher than analysts had estimated, while its adjusted earnings forecast of $1.20 per share was also above consensus.
First Advantage is up 51.2% since the beginning of the year, but at $21.55 per share, it is still trading 10.7% below its 52-week high of $24.12 from August 2026. Despite the year-to-date gain, investors who bought $1,000 worth of First Advantage’s shares 5 years ago would now be looking at only $900.54.
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