It has been about a month since the last earnings report for Amerisafe (AMSF Quick QuoteAMSF - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.

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

AMERISAFE's Q1 Earnings Beat on Lower Costs

AMERISAFE reported first-quarter 2022 earnings per share of 82 cents, which outpaced the Zacks Consensus Estimate by 34.4%. The bottom line improved nearly 8% year over year. The company's results were driven by reduced expenses and better underwriting profits. However, the upside was partly offset by a year-over-year decline in revenues coupled with a lower fee and other income.

Q1 Update

Operating revenues of AMERISAFE were $74 million, which slipped 5.1% year over year due to a 4.5% and 7.1% decline in net premiums earned and net investment income, respectively. However, the top line beat the consensus mark by 2.5%.

Net premiums earned declined 4.5% year over year to $67.6 in the first quarter. Meanwhile, net investment income of $6.1 million tumbled 7.1% year over year due to reduced investment yields on fixed-income securities. Fee and other income plunged 41.1% year over year.

AMERISAFE reported a pre-tax underwriting profit of $13.5 million in the first quarter, which climbed 23.8% year over year.

Total expenses decreased 9.4% year over year to $54.1 million on account of lower loss and loss adjustment expenses incurred coupled with reduced underwriting and other operating costs.

Net combined ratio of 80.1% improved 450 basis points (bps) year over year in the quarter under review.

Financial Update (as of Mar 31, 2022)

Cash and cash equivalents of AMERISAFE amounted to $30.7 million, which plunged 56.5% from the figure at the 2021-end.

Total assets of $1.4 billion dipped 0.8% from the 2021-end level.

Shareholders' equity slipped 1% from the 2021-end figure to $395.3 million.

Net cash provided by operating activities totaled $7.1 million, down 57.1% year over year.

Book value per share of $20.46 declined 11.7% year over year. Return on average equity came in at 17.4% for the first quarter.

Share Repurchases and Dividend Update

AMERISAFE bought back shares worth $2.1 million in the first quarter. As of Apr 25, 2022, it had $22.9 million left under the authorized share buyback program.

On Apr 26, 2022, its board of directors approved a quarterly cash dividend of 31 cents per share. The dividend will be paid on Jun 24, 2022, to shareholders of record as of Jun 17.

Net Investment Income Outlook Unveiled

Management disclosed its view of net investment income, which witnessed a plunge in the first quarter of 2022 but fared little higher than the third and fourth quarters of 2021. The metric is likely to continue to suffer in the second quarter of 2022. Ushering in hope, management anticipates improvement in net investment income growth during the third and fourth quarter of 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

At this time, Amerisafe has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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 this revision indicates a downward shift. Notably, Amerisafe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.