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FAF vs STEP

FAF
First American Financial Corporation
BULLISH
Price
$70.87
Market Cap
$7.25B
Sector
Financial Services
AI Confidence
85%
STEP
StepStone Group Inc.
NEUTRAL
Price
$54.97
Market Cap
$6.87B
Sector
Financial Services
AI Confidence
85%

Valuation

P/E Ratio
FAF
10.9
STEP
--
Forward P/E
FAF
9.74
STEP
21.89
P/B Ratio
FAF
1.32
STEP
-11.63
P/S Ratio
FAF
0.94
STEP
3.85
EV/EBITDA
FAF
5.93
STEP
-5.51

Profitability

Gross Margin
FAF
63.87%
STEP
-46.38%
Operating Margin
FAF
11.08%
STEP
-37.71%
Profit Margin
FAF
8.73%
STEP
-30.66%
ROE
FAF
12.8%
STEP
-65.12%
ROA
FAF
3.94%
STEP
-13.15%

Growth

Revenue Growth
FAF
16.2%
STEP
73.0%
Earnings Growth
FAF
70.4%
STEP
--

Financial Health

Debt/Equity
FAF
0.51
STEP
0.73
Current Ratio
FAF
0.41
STEP
0.67
Quick Ratio
FAF
0.41
STEP
0.66

Dividends

Dividend Yield
FAF
3.09%
STEP
2.69%
Payout Ratio
FAF
33.69%
STEP
167.21%

AI Verdict

FAF BULLISH

FAF presents a compelling value opportunity, trading significantly below its Graham Number ($88.68) and Intrinsic Value ($191.75). While the Piotroski F-Score of 4/9 indicates stable rather than strong financial health, this is offset by explosive earnings growth of 70.4% YoY and a very attractive P/E ratio of 10.90. Despite a contradictory technical scorecard, recent price action is strongly bullish, trending toward 52-week highs. The company maintains a sustainable dividend profile with a low payout ratio of 33.69%.

Strengths
Significant undervaluation relative to Graham Number ($88.68) and Intrinsic Value ($191.75)
Exceptional earnings growth (70.4% YoY) and strong Q/Q revenue growth (21.74%)
Low P/E ratio (10.90) compared to the broader financial services sector average
Risks
High PEG ratio (2.98) suggests that current growth may be difficult to sustain or is already priced in
Low current ratio (0.41) indicates potential short-term liquidity tightness
Piotroski F-Score of 4/9 suggests mediocre operational efficiency improvements
STEP NEUTRAL

StepStone Group presents a stark contrast between explosive growth and deteriorating fundamental health, evidenced by a weak Piotroski F-Score of 3/9. While revenue growth is exceptional at 73% YoY and analysts maintain a strong buy rating, the company suffers from negative profit margins, negative ROE, and a current ratio below 1.0. The dividend is currently unsustainable with a payout ratio of 167.21%, and heavy insider selling by the CEO and COO suggests a lack of confidence at current valuation levels. The stock is essentially a high-growth play with significant balance sheet risks.

Strengths
Exceptional revenue growth of 73% YoY
Strong EPS growth trajectory (+47.7% YoY)
Consistent history of beating quarterly earnings estimates
Risks
Weak financial health indicated by Piotroski F-Score of 3/9
Unsustainable dividend payout ratio of 167.21%
Negative shareholders' equity (Price/Book of -11.63)

Compare Another Pair

FAF vs STEP: Head-to-Head Comparison

This page compares First American Financial Corporation (FAF) and StepStone Group Inc. (STEP) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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