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First American FinancialFAF +8.95%73 Interest Coverage is 7.21 as of Jun. 2026, which is 51% below its 10-year median of 14.60. GuruFocus rates FAF with a GF Score™ of 73/100 and a GF Value™ of $70.67 (Fairly Valued). The stock has 7 warning signs investors should review. Among 352 Insurance companies, First American Financial ranks worse than 69.89% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
EBIT
by its Interest Expense. First American Financial's
EBIT
for the
three
months ended in Jun. 2026 was $330 Mil. First American Financial's Interest Expense for the
three
months ended in Jun. 2026 was $-46 Mil.
First American Financial's interest coverage for the quarter that ended in Jun. 2026 was 7.21.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for First American Financial's Interest Coverage or its related term are showing as below:
FAF'
s Interest Coverage Range Over the Past 10 Years
Min: 2.11 Med: 14.6 Max: 23.67
Current: 6.72
FAF's Interest Coverage is ranked worse than 69.89% of 352
companies
in the Insurance industry
Industry Median: 16.145
vs FAF: 6.72
First American Financial (NYSE:FAF) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
First American Financial Interest Coverage Related Terms
First American Financial Interest Coverage Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
FAF vs ACT, ESNT, MTG: Interest Coverage Comparison
For the Insurance - Specialty subindustry, First American Financial's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
First American Financial Interest Coverage vs Insurance Industry
For the Insurance industry and Financial Services sector, First American Financial's Interest Coverage distribution charts can be found below:
* The bar in red indicates where First American Financial's Interest Coverage falls into.
First American Financial Interest Coverage Calculation
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
First American Financial (FAF) has a Interest Coverage of 7.21 as of Jun. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on First American Financial and its competitors. This is 51% below median its historical median of 14.60. Over the past decade, First American Financial's Interest Coverage has ranged from 2.11 to 23.67. According to the industry distribution chart, First American Financial ranks #246 out of 352 companies in the Insurance industry, placing it in the top 69.9%.
Is First American Financial's Interest Coverage too high?
First American Financial's current Interest Coverage of 7.21 is 51% below median its 10-year median of 14.60. Over the past 10 years, this metric has ranged from a low of 2.11 to a high of 23.67. The Insurance industry median Interest Coverage is 16.15. First American Financial's value of 7.21 is 55.3% below this industry median. Based on the distribution chart, First American Financial ranks #246 out of 352 companies in the Insurance industry, which is below the industry midpoint. Overall, First American Financial has a GF Score™ of 73/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does First American Financial's Interest Coverage compare to ACT and ESNT?
According to the Insurance industry distribution chart, First American Financial ranks #246 out of 352 companies for Interest Coverage. This places First American Financial in the lower half of its industry. The industry median Interest Coverage is 16.15. First American Financial's value of 7.21 is 55.3% below this benchmark. Historically, First American Financial's own Interest Coverage has ranged from 2.11 to 23.67 over the past decade. While the company's 10-year median is 14.60 vs. the industry median of 16.15, First American Financial has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for an Insurance company?
The median Interest Coverage among Insurance companies is 16.15, based on 352 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. First American Financial's current Interest Coverage of 7.21 is 55.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on First American Financial and its competitors. For the Insurance industry, the median Interest Coverage is 16.15 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. First American Financial's current Interest Coverage is 7.21, which is 51% below median its own 10-year median of 14.60. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is First American Financial stock overvalued right now?
Based on GuruFocus' analysis, First American Financial (FAF) is currently considered Fairly Valued. The stock's GF Value™ is $70.67, compared to a current price of $75.13 — trading 6.3% above its estimated fair value. The current Interest Coverage is 7.21, which is 51% below median its 10-year median of 14.60 and 55.3% below the Insurance industry median of 16.15. First American Financial's overall GF Score™ is 73/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For First American Financial (FAF), the current Interest Coverage is 7.21 as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is First American Financial (FAF) Overvalued in 2026?
Based on GuruFocus' analysis, First American Financial stock appears to be overvalued.
The current stock price of $75.13 is trading 6.3% above its estimated GF Value™ of $70.67.
GuruFocus considers First American Financial to be Fairly Valued.
Key valuation signals for FAF:
Interest Coverage: 7.21 (51% below median its 10-year median of 14.60)
GF Value™: $70.67 vs. price of $75.13 (6.3% above fair value)
Industry Position: 55.3% below the Insurance median (#246 of 352)
No single metric tells the full story. See the FAF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
First American Financial Corp is engaged in the business of providing title insurance, settlement services, and other financial services and risk solutions. The group's reportable segments are: Title insurance and services, Home warranty, and Corporate. Maximum revenue is generated from the Title insurance and services segment, which provides title insurance, closing, escrow, and related services domestically and internationally in connection with residential and commercial real estate transactions. This segment also provides solutions to mitigate risk and facilitate real estate transactions, along with offering banking, trust, warehouse lending, mortgage subservicing and wealth management services. The majority of the group's revenue is generated from escrow fees and insurance premiums.
73GF Score
Get the complete analysis for FAF
Interest Coverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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