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Kinsale (KNSL) Gains 51% YTD: Will the Bull Run Continue?
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Kinsale Capital (KNSL - Free Report) shares have gained 51.1% year to date, outperforming the industry’s growth of 13.8%. The Finance sector and the Zacks S&P 500 index have grown 2.5% and 6.8% in the said time frame, respectively. With a market capitalization of $11.7 billion, the average volume of shares traded in the last three months was 0.2 million.
Focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
The insurer’s earnings have increased 45.7% in the past five years, better than the industry average of 13.3%. KNSL has a solid surprise history, beating earnings estimates in the last 13 reported quarters.
Kinsale’s return on equity (ROE) for the trailing 12 months is 31.5%, comparing favorably with the industry’s 7.3%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. ROIC for the trailing 12 months is 25.6%, comparing favorably with the industry average of 5.6%.
Image Source: Zacks Investment Research
Can It Retain the Momentum?
The Zacks Consensus Estimate for Kinsale’s 2024 earnings is pegged at $15.21 per share, indicating a 21.7% year over year increase on 28% higher revenues of $1.6 billion . The consensus estimate for 2025 earnings is pegged at $18.47, indicating a 21.4% year over year increase on 21.1% higher revenues of $1.9 billion . We expect 2026 bottom line to witness a three-year CAGR of 20.6%.
It has a Growth Score of B. This style score analyzes growth prospects of a company. Back-tested results have shown that stocks with a Growth Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offers better returns.
A strong presence across E&S market in the United States and high retention rates stemming from contract renewals should help KNSL to continue generating improved premiums. We expect 2025 net written premiums to witness a three-year CAGR of 29.2%. Management noted that E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
The investment result should continue to benefit from an improved rate environment as well as investment of the excess operating funds at higher rates.
Kinsale enjoys the best combination of high growth and low combined ratio among its peers. KNSL targets a combined ratio in the mid-80s range over the long term.
A proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business, should help KNSL generate an improved expense ratio.
Banking on operational excellence that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year CAGR (2017-2024) of 12%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Axis Capital delivered a trailing four-quarter average earnings surprise of 102.57%. The stock has gained 9.8% year to date. The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings indicates an increase of 3.1% and 10.1% year over year, respectively.
Progressive beat on earnings in two of the last four quarters while missing on the other two occasions. The stock has gained 17.9 % year to date. The Zacks Consensus Estimate for PGR’s 2024 and 2025 earnings indicates an increase of 49.4% and 14.8% year over year, respectively.
Mercury General delivered a trailing four-quarter average earnings surprise of 3414.48%. The stock has gained 29.8% year to date. The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings indicates an increase of 866.7% and 34.5% year over year, respectively.
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Kinsale (KNSL) Gains 51% YTD: Will the Bull Run Continue?
Kinsale Capital (KNSL - Free Report) shares have gained 51.1% year to date, outperforming the industry’s growth of 13.8%. The Finance sector and the Zacks S&P 500 index have grown 2.5% and 6.8% in the said time frame, respectively. With a market capitalization of $11.7 billion, the average volume of shares traded in the last three months was 0.2 million.
Focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
The insurer’s earnings have increased 45.7% in the past five years, better than the industry average of 13.3%. KNSL has a solid surprise history, beating earnings estimates in the last 13 reported quarters.
Kinsale’s return on equity (ROE) for the trailing 12 months is 31.5%, comparing favorably with the industry’s 7.3%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. ROIC for the trailing 12 months is 25.6%, comparing favorably with the industry average of 5.6%.
Image Source: Zacks Investment Research
Can It Retain the Momentum?
The Zacks Consensus Estimate for Kinsale’s 2024 earnings is pegged at $15.21 per share, indicating a 21.7% year over year increase on 28% higher revenues of $1.6 billion . The consensus estimate for 2025 earnings is pegged at $18.47, indicating a 21.4% year over year increase on 21.1% higher revenues of $1.9 billion . We expect 2026 bottom line to witness a three-year CAGR of 20.6%.
It has a Growth Score of B. This style score analyzes growth prospects of a company. Back-tested results have shown that stocks with a Growth Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offers better returns.
A strong presence across E&S market in the United States and high retention rates stemming from contract renewals should help KNSL to continue generating improved premiums. We expect 2025 net written premiums to witness a three-year CAGR of 29.2%. Management noted that E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
The investment result should continue to benefit from an improved rate environment as well as investment of the excess operating funds at higher rates.
Kinsale enjoys the best combination of high growth and low combined ratio among its peers. KNSL targets a combined ratio in the mid-80s range over the long term.
A proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business, should help KNSL generate an improved expense ratio.
Banking on operational excellence that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year CAGR (2017-2024) of 12%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Axis Capital Holdings (AXS - Free Report) , The Progressive Corporation (PGR - Free Report) and Mercury General (MCY - Free Report) , each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital delivered a trailing four-quarter average earnings surprise of 102.57%. The stock has gained 9.8% year to date. The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings indicates an increase of 3.1% and 10.1% year over year, respectively.
Progressive beat on earnings in two of the last four quarters while missing on the other two occasions. The stock has gained 17.9 % year to date. The Zacks Consensus Estimate for PGR’s 2024 and 2025 earnings indicates an increase of 49.4% and 14.8% year over year, respectively.
Mercury General delivered a trailing four-quarter average earnings surprise of 3414.48%. The stock has gained 29.8% year to date. The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings indicates an increase of 866.7% and 34.5% year over year, respectively.