A month has gone by since the last earnings report for Palomar (PLMR Quick QuotePLMR - Free Report) . Shares have added about 18.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Palomar 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 drivers.

Palomar Q1 Earnings Top Estimates, Revenues Up Y/Y

Palomar reported first-quarter 2022 operating income of 68 cents per share, beating the Zacks Consensus Estimate by 9.7%. The bottom line decreased 6.8% year over year.

Palomar witnessed improved premiums and net investment income, offset by higher expenses.

Behind the Headlines

Total revenues improved 58.9% year over year to $79.4 million, mainly attributable to higher premiums, net investment income, and commission and other income. The top line missed the Zacks Consensus Estimate by 0.1%.

Gross written premiums increased 65 % year over year to $170.9 million. Net earned premiums surged 61.6% year over year to $76 million.

Net investment income increased 16.2% year over year to $2.6 million, driven by a higher average balance of investments.

Palomar witnessed an underwriting income of $17.9 million, down 3.8% year over year.

Total expenses of $59 million more than doubled year over year due to higher losses and loss adjustment expenses, acquisition and underwriting expenses as well as interest expenses. Loss ratio was 19.7 against (9.4%) in the year-ago quarter.

Adjusted combined ratio, excluding catastrophe losses, deteriorated 1880 basis points (bps) year over year to 72.1.

Financial Update

Cash and cash equivalents decreased 6.8% from the 2021-end level to $46.9 million at the end of 2021.

Shareholder equity decreased 3.5% from 2021 end to $380.4 million.

Annualized adjusted return on equity was 18.1%, contracting 270 bps year over year.

PLMR bought back 0.2 million shares for $13 million in the first quarter of 0222.

2022 Guidance Reiterated

Palomar estimates adjusted net income between $80 million and $85 million in 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Palomar has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Palomar has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Palomar is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Chubb (CB Quick QuoteCB - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended March 2022 more than a month ago.

Chubb reported revenues of $9.65 billion in the last reported quarter, representing a year-over-year change of +0.8%. EPS of $3.82 for the same period compares with $2.52 a year ago.

For the current quarter, Chubb is expected to post earnings of $3.63 per share, indicating a change of +0.3% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Chubb. Also, the stock has a VGM Score of B.