A month has gone by since the last earnings report for Allstate (ALL Quick QuoteALL - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Allstate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Allstate Q2 Earnings Beat Estimates on Revenue Growth

The company's earnings per share of $3.79 beat the Zacks Consensus Estimate by 26.8% and also surged 46.9% year over year.

Revenues grew 21.6% year over year to $12.5 billion, reflecting higher earned premiums from the acquisition of National General and increased net investment income. Increased contribution from Protection Services also led to this upside.

Better-than-expected earnings came on the back of revenue rise coupled with lower Shelter-in-Place Payback expense, partially offset by higher non-catastrophe losses.

Premium in the property-liability segment was up 12.5% to $10.3 billion, driven by the acquisition of National General.

The combined ratio of 95.7 deteriorated 590 basis points year over year due to wider non-catastrophe losses in auto and homeowners insurance.

The expense ratio of 24.7 decreased 7.1 year over year on lower coronavirus-related expenses from Shelter-in-Place Payback and bad debt. The company continuously invests in digitizing business processes to improve efficiency, which will ultimately decrease expenses.

In its Protection Services segment, revenues were up 27.1% to $581 million, driven by a solid contribution from all its sub-segments, such as Protection Plans, Dealer Services, Roadside, Arity and Identity Protection.
In the company’s Health and Benefits segment, premiums and contract charges increased 70% year over year to $447 million due to the addition of group health and individual accident and health businesses acquired with National General.

Financial Update (as of Jun 30, 2021)

The cash balance totaled $656 million, which more than doubled the 2020-end level. Total assets were $132.6 billion, up 5.3% from the level as of Dec 31, 2020.

Long-term debt during the quarter amounted to $8 billion, which increased 2.2% from the level at 2020 end.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -12.54% due to these changes.

VGM Scores

Currently, Allstate has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.