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Why Is Palomar (PLMR) Up 19.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 19.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Palomar Q3 Earnings, Revenues Top Estimates on Higher Premiums
Palomar Holdings, Inc. reported third-quarter 2024 operating income of $1.23 per share, which beat the Zacks Consensus Estimate by 13.9%. The bottom line increased 33.7% year over year. Palomar witnessed higher premiums, improved adjusted underwriting income and higher yields on invested assets, partly offset by higher losses and loss adjustment expenses, as well as underwriting expenses. Palomar incurred higher-than-expected catastrophe loss in the reported quarter.
Behind the Headlines
Total revenues improved 60.3% year over year to $145.8 million, mainly attributable to higher premiums, commission and other income and net investment income. The top line beat the Zacks Consensus Estimate by 8.2%.
Gross written premiums increased 32.2% year over year to $415 million, driven by strength in earthquake and casualty products as well as strong growth from growing crop business. Our estimate was $403.6 million. Net earned premiums increased 58.1% year over year to $135.6 million. Our estimate was $121.6 million. The Zacks Consensus Estimate is pegged at $126 million.
Net investment income increased 56% year over year to $9.4 million, driven by higher yields on invested assets and a higher average balance of investments held during the three months ended Sept. 30, 2024 due to cash generated from operations. The Zacks Consensus Estimate is pegged at $8.3 million. Our estimate was $7.8 million.
Palomar recorded an adjusted underwriting income of $31 million, which increased 24% from the year-ago quarter. Underwriting income was $26.4 million, up 27.5% year over year. Our estimate was $22.1 million.
Total expenses of $110 million increased 65.6% year over year due to higher losses and loss adjustment expenses, underwriting expenses and acquisition expenses, net of ceding commissions and fronting fees. Our estimate was $110 million.
The loss ratio was 29.7, which deteriorated 1090 basis points (bps) year over year. Our estimate was 26.5. The Zacks Consensus Estimate was pegged at 28.6.
Adjusted combined ratio, excluding catastrophe losses, deteriorated 620 bps year over year to 77.1. The Zacks Consensus Estimate was pegged at 79.
Financial Update
Cash and cash equivalents increased 67% from 2023-end to $86.5 million at the end of the third quarter of 2024. Shareholder equity increased 49% from 2023-end to $703.3 million at the end of the reported quarter. Annualized adjusted return on equity in the third quarter of 2024 was 21%, contracting 130 bps year over year.
2024 View
Palomar expects adjusted net income in the range of $124-$128 million. This range includes catastrophe losses incurred during the fourth quarter of 2024 of nearly $8 million related to Hurricane Milton.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.55% due to these changes.
VGM Scores
At this time, Palomar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Palomar has a Zacks Rank #3 (Hold). We expect an in-line 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, W.R. Berkley (WRB - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
W.R. Berkley reported revenues of $3.41 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $0.93 for the same period compares with $0.90 a year ago.
W.R. Berkley is expected to post earnings of $0.93 per share for the current quarter, representing a year-over-year change of -4.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for W.R. Berkley. Also, the stock has a VGM Score of B.
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Why Is Palomar (PLMR) Up 19.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 19.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Palomar Q3 Earnings, Revenues Top Estimates on Higher Premiums
Palomar Holdings, Inc. reported third-quarter 2024 operating income of $1.23 per share, which beat the Zacks Consensus Estimate by 13.9%. The bottom line increased 33.7% year over year. Palomar witnessed higher premiums, improved adjusted underwriting income and higher yields on invested assets, partly offset by higher losses and loss adjustment expenses, as well as underwriting expenses. Palomar incurred higher-than-expected catastrophe loss in the reported quarter.
Behind the Headlines
Total revenues improved 60.3% year over year to $145.8 million, mainly attributable to higher premiums, commission and other income and net investment income. The top line beat the Zacks Consensus Estimate by 8.2%.
Gross written premiums increased 32.2% year over year to $415 million, driven by strength in earthquake and casualty products as well as strong growth from growing crop business. Our estimate was $403.6 million.
Net earned premiums increased 58.1% year over year to $135.6 million. Our estimate was $121.6 million. The Zacks Consensus Estimate is pegged at $126 million.
Net investment income increased 56% year over year to $9.4 million, driven by higher yields on invested assets and a higher average balance of investments held during the three months ended Sept. 30, 2024 due to cash generated from operations. The Zacks Consensus Estimate is pegged at $8.3 million. Our estimate was $7.8 million.
Palomar recorded an adjusted underwriting income of $31 million, which increased 24% from the year-ago quarter. Underwriting income was $26.4 million, up 27.5% year over year. Our estimate was $22.1 million.
Total expenses of $110 million increased 65.6% year over year due to higher losses and loss adjustment expenses, underwriting expenses and acquisition expenses, net of ceding commissions and fronting fees. Our estimate was $110 million.
The loss ratio was 29.7, which deteriorated 1090 basis points (bps) year over year. Our estimate was 26.5. The Zacks Consensus Estimate was pegged at 28.6.
Adjusted combined ratio, excluding catastrophe losses, deteriorated 620 bps year over year to 77.1. The Zacks Consensus Estimate was pegged at 79.
Financial Update
Cash and cash equivalents increased 67% from 2023-end to $86.5 million at the end of the third quarter of 2024. Shareholder equity increased 49% from 2023-end to $703.3 million at the end of the reported quarter. Annualized adjusted return on equity in the third quarter of 2024 was 21%, contracting 130 bps year over year.
2024 View
Palomar expects adjusted net income in the range of $124-$128 million. This range includes catastrophe losses incurred during the fourth quarter of 2024 of nearly $8 million related to Hurricane Milton.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.55% due to these changes.
VGM Scores
At this time, Palomar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Palomar has a Zacks Rank #3 (Hold). We expect an in-line 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, W.R. Berkley (WRB - Free Report) , has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
W.R. Berkley reported revenues of $3.41 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $0.93 for the same period compares with $0.90 a year ago.
W.R. Berkley is expected to post earnings of $0.93 per share for the current quarter, representing a year-over-year change of -4.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for W.R. Berkley. Also, the stock has a VGM Score of B.