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Why Is Palomar (PLMR) Up 12.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 12.5% 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's Q4 Earnings and Revenues Top, Rise Y/Y
Palomar reported fourth-quarter 2023 operating income of 94 cents per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line increased 14.6% year over year. Palomar witnessed improved premiums and net investment income as well as improved losses and loss adjustment expenses.
Behind the Headlines
Total revenues improved 16% year over year to $102 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 7.7%.
Gross written premiums increased 26.8% year over year to $303.2 million. Our estimate was $269.6 million. Net earned premiums increased 14% year over year to $93.7 million. Our estimate was $87.9 million. The Zacks Consensus Estimate was pegged at $90 million.
Net investment income increased 58.9% year over year to $7 million, driven by higher yields on invested assets and a higher average balance of investments. The Zacks Consensus Estimate was pegged at $6.2 million. Our estimate was $6.3 million.
Palomar witnessed an underwriting income of $24.2 million, up 20.4% year over year. Adjusted underwriting income was nearly $29.3 million, rising 24.5% year over year.
Total expenses of $71.9 million increased 13% year over year due to loss and loss adjustment expenses. Our estimate was $68.3 million.
The loss ratio was 19.1, which improved 330 basis points (bps) year over year. Our estimate was 20.3. The Zacks Consensus Estimate was pegged at 20.9.
Adjusted combined ratio, excluding catastrophe losses, improved 260 bps year over year to 68.8. The Zacks Consensus Estimate was pegged at 72.
Full-Year Highlights
Adjusted income of $3.69 per share increased 33.2% year over year.
Gross written premiums increased 29.4% year over year to $1.1 billion.
Underwriting income of $80.8 million improved 30.1% year over year. Total loss ratio was 21%, which improved 390 bps year over year. Adjusted combined ratio was 71.2, which improved 440 bps year over year.
Financial Update
Cash and cash equivalents declined 25.1% from 2022-end to $52.4 million at 2023-end. Shareholder equity increased 22.5% from 2022-end to $471.3 million at the end of 2023.
Annualized adjusted return on equity in 2023 was 21.9%, up 360 bps year over year. As of Dec 31, 2023, $43.5 million remained under authorization.
2024 View
Palomar aims to achieve adjusted net income in the range of $110 million-$115 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Palomar has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Palomar has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Palomar belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Cincinnati Financial (CINF - Free Report) , has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Cincinnati Financial reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.28 for the same period compares with $1.27 a year ago.
For the current quarter, Cincinnati Financial is expected to post earnings of $1.48 per share, indicating a change of +66.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days.
Cincinnati Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Palomar (PLMR) Up 12.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 12.5% 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's Q4 Earnings and Revenues Top, Rise Y/Y
Palomar reported fourth-quarter 2023 operating income of 94 cents per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line increased 14.6% year over year. Palomar witnessed improved premiums and net investment income as well as improved losses and loss adjustment expenses.
Behind the Headlines
Total revenues improved 16% year over year to $102 million, mainly attributable to higher premiums and net investment income. The top line beat the Zacks Consensus Estimate by 7.7%.
Gross written premiums increased 26.8% year over year to $303.2 million. Our estimate was $269.6 million. Net earned premiums increased 14% year over year to $93.7 million. Our estimate was $87.9 million. The Zacks Consensus Estimate was pegged at $90 million.
Net investment income increased 58.9% year over year to $7 million, driven by higher yields on invested assets and a higher average balance of investments. The Zacks Consensus Estimate was pegged at $6.2 million. Our estimate was $6.3 million.
Palomar witnessed an underwriting income of $24.2 million, up 20.4% year over year. Adjusted underwriting income was nearly $29.3 million, rising 24.5% year over year.
Total expenses of $71.9 million increased 13% year over year due to loss and loss adjustment expenses. Our estimate was $68.3 million.
The loss ratio was 19.1, which improved 330 basis points (bps) year over year. Our estimate was 20.3. The Zacks Consensus Estimate was pegged at 20.9.
Adjusted combined ratio, excluding catastrophe losses, improved 260 bps year over year to 68.8. The Zacks Consensus Estimate was pegged at 72.
Full-Year Highlights
Adjusted income of $3.69 per share increased 33.2% year over year.
Gross written premiums increased 29.4% year over year to $1.1 billion.
Underwriting income of $80.8 million improved 30.1% year over year. Total loss ratio was 21%, which improved 390 bps year over year. Adjusted combined ratio was 71.2, which improved 440 bps year over year.
Financial Update
Cash and cash equivalents declined 25.1% from 2022-end to $52.4 million at 2023-end. Shareholder equity increased 22.5% from 2022-end to $471.3 million at the end of 2023.
Annualized adjusted return on equity in 2023 was 21.9%, up 360 bps year over year. As of Dec 31, 2023, $43.5 million remained under authorization.
2024 View
Palomar aims to achieve adjusted net income in the range of $110 million-$115 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Palomar has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Palomar has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Palomar belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Cincinnati Financial (CINF - Free Report) , has gained 6.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Cincinnati Financial reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.28 for the same period compares with $1.27 a year ago.
For the current quarter, Cincinnati Financial is expected to post earnings of $1.48 per share, indicating a change of +66.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days.
Cincinnati Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.