It has been about a month since the last earnings report for Amerisafe (AMSF Quick QuoteAMSF - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.

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

AMERISAFE’s Q3 Earnings Beat on Higher Premiums

AMERISAFE reported third-quarter adjusted earnings per share (EPS) of 58 cents, which beat the Zacks Consensus Estimate by 3.6%. However, the bottom line dipped 4.9% year over year.

Operating revenues declined 0.2% year over year to $74.7 million. The top line missed the consensus mark by a whisker.

The quarterly earnings benefited from improved net premiums earned and fee and other income. However, declining net investment income and an elevated operating expense level, resulting from an increase in loss and loss adjustment expenses incurred, partially offset the positives.

Q3 Performance

Net premiums earned of $67.1 million improved 0.6% year over year in the quarter under review but missed the Zacks Consensus Estimate by 1%. The metric benefited from improved contributions from payroll audits and related premium adjustments as a result of persistent payroll strength.

Net investment income dipped 7.6% year over year to $7.5 million due to a reduced portfolio size. However, this was partially offset by improved reinvestment rates. However, the metric beat the consensus mark by a whisker. Fee and other income were $129 million.

AMERISAFE reported a pre-tax underwriting profit of $6.1 million, which declined 2.7% year over year.

Total expenses rose 1% year over year to $60.9 million in the third quarter.

Operating net income of $11.1 million decreased 4.6% year over year.

The net combined ratio deteriorated 30 basis points (bps) year over year to 90.9% but came lower than the consensus mark of 91.8%. The metric suffered due to a deteriorating net loss ratio.

Financial Update (as of Sept. 30, 2024)

AMERISAFE exited the third quarter with cash and cash equivalents of $63.7 million, which rose 64.6% from 2023-end.

Total assets of $1.3 billion increased 2.1% from the figure in 2023-end.

Shareholders' equity of $314.4 million grew 7.5% from the 2023-end level.

Book value per share was $16.5 as of Sept. 30, 2024, which increased 8% from the 2023-end figure.

Return on average equity improved 680 bps year over year to 18.6% in the quarter under review.

Capital Deployment Update

AMERISAFE repurchased shares worth $1 million in the third quarter of 2024. The remaining buyback capacity, as of Sept. 30, was $5.3 million.

Management announced a quarterly cash dividend of 37 cents per share, which will be paid out on Dec. 13, to its shareholders of record as of Dec. 6, 2024.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Amerisafe has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Amerisafe has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.