First Advantage (NYSE:FA) vs. Advantage Solutions (NASDAQ:ADV) Financial Survey

First Advantage (NYSE:FA) and Advantage Solutions (NASDAQ:ADV) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, risk, profitability and earnings.

Volatility and Risk

First Advantage has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for First Advantage and Advantage Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Advantage	0	1	4	0	2.80
Advantage Solutions	0	2	2	0	2.50

First Advantage currently has a consensus price target of $18.00, indicating a potential upside of 10.91%. Advantage Solutions has a consensus price target of $3.43, indicating a potential downside of 19.41%. Given First Advantage’s stronger consensus rating and higher possible upside, equities analysts plainly believe First Advantage is more favorable than Advantage Solutions.

Institutional & Insider Ownership

94.9% of First Advantage shares are owned by institutional investors. Comparatively, 49.8% of Advantage Solutions shares are owned by institutional investors. 4.7% of First Advantage shares are owned by company insiders. Comparatively, 6.2% of Advantage Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares First Advantage and Advantage Solutions’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Advantage	$763.76 million	3.09	$37.29 million	$0.25	64.92
Advantage Solutions	$4.22 billion	0.32	-$63.26 million	($0.20)	-21.30

First Advantage has higher earnings, but lower revenue than Advantage Solutions. Advantage Solutions is trading at a lower price-to-earnings ratio than First Advantage, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Advantage and Advantage Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Advantage	4.88%	13.84%	7.96%
Advantage Solutions	-1.35%	-4.51%	-1.31%

Summary

First Advantage beats Advantage Solutions on 11 of the 14 factors compared between the two stocks.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.

About Advantage Solutions

Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.