Bank of America on Tuesday downgraded First Advantage (NASDAQ:FA) to Neutral from Buy due to limited multiple expansion near-term as sales growth slows amid weakening hiring trends due to the Federal Reserve's actions.
"We still think FA has an attractive long-term growth story given secular trends, its focus on high-growth customer verticals, and the potential for further industry consolidation," said analyst Heather Balsky.
BofA set a price target of $14.50 on First Advantage (FA), implying 8% potential upside to its last close, representing 0.5x premium to its current multiple.
"We think a premium to peers is warranted given FA's higher margins and stronger balance sheet," Balsky noted.