Discounted Cash Flow

First American Financial Corp.

FAF · Based on 10 years of SEC filings

Average annual growth rates

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Average annual growth is the mean year-over-year change across each period.

Endpoint CAGR (better for long term trend)

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Endpoint CAGR is the compound annual rate from the first to last year in each period.

Projections use average year-over-year growth. Change this in Settings.

Projected growth rate

Free cash flow growth
10-year: — 5-year: — 3-year: —
Averaged growth (FCF & NI)
10-year: — 5-year: — 3-year: —
Net income growth
10-year: — 5-year: — 3-year: —
Sales growth (not added to calculations)
10-year: — 5-year: — 3-year: —

Click a greyed-out slider to switch metrics. Slide between the 10-year, 5-year, and 3-year historic growth rates for FCF, net income, or their average.

%
%

Historical inputs (10 fiscal years)

YEAR Sales Net Income Free Cash Flow Net Margin EPS (diluted)
2016 $5.6b $343.0m $489.4m 6.2% $3.10
2017 $5.8b (3.5%) $423.0m (23.3%) $632.1m (29.2%) 7.3% (19.1%) $3.79 (22.3%)
2018 $5.7b (-0.4%) $474.5m (12.2%) $793.2m (25.5%) 8.3% (12.6%) $4.21 (11.1%)
2019 $6.2b (7.9%) $707.4m (49.1%) $913.1m (15.1%) 11.4% (38.2%) $6.26 (48.7%)
2020 $7.1b (14.3%) $696.4m (-1.6%) $1.1b (18.8%) 9.8% (-13.8%) $6.18 (-1.3%)
2021 $9.2b (30.1%) $1.2b (78.2%) $1.2b (12.5%) 13.5% (36.9%) $11.18 (80.9%)
2022 $7.6b (-17.5%) $263.0m (-78.8%) $517.8m (-57.6%) 3.5% (-74.3%) $2.46 (-78.0%)
2023 $6.0b (-21.1%) $216.8m (-17.6%) $90.9m (-82.4%) 3.6% (4.4%) $2.08 (-15.4%)
2024 $6.1b (2.1%) $131.1m (-39.5%) $679.2m (647.2%) 2.1% (-40.8%) $1.26 (-39.4%)
2025 $7.5b (21.6%) $621.8m (374.3%) $762.5m (12.3%) 8.3% (290.0%) $6.02 (377.8%)

Base FCF: (latest fiscal year)

Discount rate: %

Terminal growth:

Projection period: years

Alt A decline yrs:

Alt B total yrs:

Values abbreviated: b = billions, m = millions, k = thousands.

Projected cash flows

Year Projected cash flow Discount Factor Present Value

PV of projected FCF:

Terminal FCF:

Terminal value:

PV of terminal value:

Enterprise value (DCF):

DCF price per share:

Current price:

Alternative DCF Models

Model Fair Value Upside PV(FCFs) PV(Terminal) Total Years
Standard (10yr→TV) 10 + TV
Alt A (Gradual Decline)
Alt B (30yr Hard Stop) N/A

This is a simplified DCF model for illustration. It uses reported free cash flow, a single growth assumption, fixed WACC, and a Gordon Growth terminal value. It is not investment advice.

+ 10YR Financials Balance Sheet (10YR) Cash Flow (10YR) DCF Model