First Advantage Corp. (FADV) - Bear Of The Day

We maintain our Sell rating on shares of First Advantage Corporation (FADV) following the release of Q4 results. Although the company posted revenue gains in its Data Services business, we do not believe that the current level of revenue generation within the segment will be sustainable in the long-term.

Additionally, revenues, operating income and margins all continued to deteriorate for the company as a whole during the quarter. We believe that, given the present earnings growth outlook and the current level of economic uncertainty, the current valuation is unwarranted.

Our $9.50 six-month target price for FADV is based on a P/E multiple of 11.5x estimated 2009 EPS.

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