First American Financial (FAF) saw its stock surge 6.58% in after-hours trading on Wednesday, following the release of its impressive second-quarter 2025 earnings report and the announcement of a new $300 million share repurchase authorization. The title insurance and settlement services provider delivered results that significantly exceeded analyst expectations, demonstrating robust growth across its key business segments.

The company reported adjusted earnings per share of $1.53 for the quarter ended June 30, surpassing the mean expectation of $1.36 from five analysts surveyed by LSEG. This performance marks a substantial improvement from the $1.27 per share reported in the same quarter last year. Revenue also impressed, rising 14.2% to $1.84 billion, comfortably beating the analyst consensus of $1.75 billion.

First American's strong performance was driven by several factors. The Title Insurance and Services segment saw a 13% increase in revenues, attributed to higher average revenue per order and an uptick in closed orders. Notably, commercial revenues surged by 33%, primarily due to increased average revenue per order. Additionally, investment income grew by 17%, benefiting from higher interest income from the company's investment portfolio. The company's net income for the quarter stood at $146.1 million, translating to a reported EPS of $1.41.

Looking ahead, First American expects to see productivity improvements from its investments in data, technology, and AI. The company's management expressed confidence in its ability to outperform in the next real estate cycle, particularly highlighting the strong growth in its commercial business. Wall Street appears to share this optimism, with the current average analyst rating on First American shares being "buy". The median 12-month price target stands at $75.00, representing a potential upside of approximately 23% from the stock's last closing price before the earnings announcement.