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Here's Why Hold Strategy Is Apt for Kinsale Capital (KNSL)
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Kinsale Capital Group, Inc. (KNSL - Free Report) has been favored by investors on the back of its focus on the excess and supply (E&S) market, prudent underwriting, growth in the investment portfolio and effective capital deployment.
Optimistic Growth Projection
The consensus estimate for Kinsale Capital’s 2024 earnings per share indicates a year-over-year increase of 20.5% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $1.55 billion, implying a year-over-year improvement of 27.4% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 18.4% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $1.84 billion, implying a year-over-year improvement of 18.4% from the consensus mark of 2024.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 11.33%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) property and casualty (P&C) insurer have gained 14.2% in a year compared with the industry’s growth of 26.6%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s ROE for the trailing 12 months is 31.2%, which expanded 290 basis points year over year, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Style Score
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
A strong presence across the E&S market in the United States and high retention rates stemming from contract renewals should help KNSL continue generating improved premiums.
Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. The insurer remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it 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 growth in the company's investment portfolio generated primarily from the investment of strong operating cash flows and higher interest rates.
Kinsale Capital 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.
Banking on operational excellence that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%.
KNSL has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Stocks to Consider
Some better-ranked stocks from the P&C insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and NMI Holdings Inc (NMIH - Free Report) . While Arch Capital and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, NMI Holdings carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 28.41%. In the past year, ACGL has gained 28.9%.
The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings has moved 5.1% and 3.3% north, respectively, in the past 30 days.
Palomar has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 15.10%. In the past year, PLMR has surged 75.3%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.8% and 19.1%, respectively, from the consensus estimate of the corresponding years.
NMI Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 8.60%. In the past year, NMIH has jumped 40.3%.
The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 9.1% and 8.3%, respectively, from the consensus estimate of the corresponding years.
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Here's Why Hold Strategy Is Apt for Kinsale Capital (KNSL)
Kinsale Capital Group, Inc. (KNSL - Free Report) has been favored by investors on the back of its focus on the excess and supply (E&S) market, prudent underwriting, growth in the investment portfolio and effective capital deployment.
Optimistic Growth Projection
The consensus estimate for Kinsale Capital’s 2024 earnings per share indicates a year-over-year increase of 20.5% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $1.55 billion, implying a year-over-year improvement of 27.4% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 18.4% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $1.84 billion, implying a year-over-year improvement of 18.4% from the consensus mark of 2024.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 11.33%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) property and casualty (P&C) insurer have gained 14.2% in a year compared with the industry’s growth of 26.6%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s ROE for the trailing 12 months is 31.2%, which expanded 290 basis points year over year, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Style Score
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
A strong presence across the E&S market in the United States and high retention rates stemming from contract renewals should help KNSL continue generating improved premiums.
Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. The insurer remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it 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 growth in the company's investment portfolio generated primarily from the investment of strong operating cash flows and higher interest rates.
Kinsale Capital 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.
Banking on operational excellence that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%.
KNSL has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Stocks to Consider
Some better-ranked stocks from the P&C insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and NMI Holdings Inc (NMIH - Free Report) . While Arch Capital and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, NMI Holdings carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 28.41%. In the past year, ACGL has gained 28.9%.
The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings has moved 5.1% and 3.3% north, respectively, in the past 30 days.
Palomar has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 15.10%. In the past year, PLMR has surged 75.3%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.8% and 19.1%, respectively, from the consensus estimate of the corresponding years.
NMI Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 8.60%. In the past year, NMIH has jumped 40.3%.
The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 9.1% and 8.3%, respectively, from the consensus estimate of the corresponding years.