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UNIVERSAL INSURANCE HOLDINGS INC (UVE) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Universal Insurance Holdings (UVE - Free Report) ? Shares have been on the move with the stock up 8.4% over the past month. The stock hit a new 52-week high of $19.82 in the previous session. Universal Insurance Holdings has gained 86.9% since the start of the year compared to the 1.3% move for the Zacks Finance sector and the 3% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 23, 2023, Universal Insurance reported EPS of $0.72 versus consensus estimate of $-0.28.
For the current fiscal year, Universal Insurance is expected to post earnings of $1.65 per share on $1.33 billion in revenues. This represents a 502.44% change in EPS on a 9% change in revenues. For the next fiscal year, the company is expected to earn $2.40 per share on $1.44 billion in revenues. This represents a year-over-year change of 45.45% and 8.22%, respectively.
Valuation Metrics
Universal Insurance may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Universal Insurance has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.7X. On a trailing cash flow basis, the stock currently trades at 172.2X versus its peer group's average of 16.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Universal Insurance currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Universal Insurance passes the test. Thus, it seems as though Universal Insurance shares could have potential in the weeks and months to come.
How Does UVE Stack Up to the Competition?
Shares of UVE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Markel Corporation (MKL - Free Report) . MKL has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. Markel Corporation beat our consensus estimate by 41.58%, and for the current fiscal year, MKL is expected to post earnings of $82.37 per share on revenue of $14.74 billion.
Shares of Markel Corporation have gained 9.4% over the past month, and currently trade at a forward P/E of 16.14X and a P/CF of 12.23X.
The Insurance - Property and Casualty industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UVE and MKL, even beyond their own solid fundamental situation.
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UNIVERSAL INSURANCE HOLDINGS INC (UVE) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Universal Insurance Holdings (UVE - Free Report) ? Shares have been on the move with the stock up 8.4% over the past month. The stock hit a new 52-week high of $19.82 in the previous session. Universal Insurance Holdings has gained 86.9% since the start of the year compared to the 1.3% move for the Zacks Finance sector and the 3% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 23, 2023, Universal Insurance reported EPS of $0.72 versus consensus estimate of $-0.28.
For the current fiscal year, Universal Insurance is expected to post earnings of $1.65 per share on $1.33 billion in revenues. This represents a 502.44% change in EPS on a 9% change in revenues. For the next fiscal year, the company is expected to earn $2.40 per share on $1.44 billion in revenues. This represents a year-over-year change of 45.45% and 8.22%, respectively.
Valuation Metrics
Universal Insurance may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Universal Insurance has a Value Score of B. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 12X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.7X. On a trailing cash flow basis, the stock currently trades at 172.2X versus its peer group's average of 16.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Universal Insurance currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Universal Insurance passes the test. Thus, it seems as though Universal Insurance shares could have potential in the weeks and months to come.
How Does UVE Stack Up to the Competition?
Shares of UVE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Markel Corporation (MKL - Free Report) . MKL has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. Markel Corporation beat our consensus estimate by 41.58%, and for the current fiscal year, MKL is expected to post earnings of $82.37 per share on revenue of $14.74 billion.
Shares of Markel Corporation have gained 9.4% over the past month, and currently trade at a forward P/E of 16.14X and a P/CF of 12.23X.
The Insurance - Property and Casualty industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UVE and MKL, even beyond their own solid fundamental situation.