Kingstone Companies (KINS Quick QuoteKINS - Free Report) gave a sneak peek of its fourth-quarter and full-year 2024 earnings results. Per its preliminary results, this insurer reported a solid improvement in its bottom line. While direct written premium increased, combined ratio, loss ratio as well as expense ratio witnessed improvement. 

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This insurer is set to report its fourth-quarter and full-year 2024 earnings results on Mar, 13, 2025. The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 42 cents, while revenues is pegged at $43.8 million. 

Our proven model does not conclusively predict an earnings beat for KINS this time. This is because, though it has a Zacks Rank #3 (Hold) that increases the odds of an earnings beat, it has an Earnings ESP of 0.00%. KINS met estimates in the last two reported quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Preliminary Results

Operating income in the fourth quarter increased more than three-fold year over year to 49 cents. Core direct written premium grew 49%, while direct written premium grew 37%.

Consolidated GAAP combined ratio of 79% improved 1,100 basis points. The Zacks Consensus Estimate is pegged at 80.4.

Net loss ratio of 49% improved 800 basis points. The Zacks Consensus Estimate is pegged at 51.

Net expense ratio of 30% improved 300 basis points. The Zacks Consensus Estimate is pegged at 29.4.  

KINS’ Impressive Growth Path

Focus on core business and scaling back of unprofitable non-core businesses well poise KINS for growth. The insurer only writes businesses that meet its underwriting standards and profit-margin objectives.

The insurer has been successful in implementing a price increase ahead of inflation, matching prices to risks. KINS’ partnership with Earnix enhances its pricing capabilities and supports its strategic growth initiatives.

Kingstone Companies expects direct written premium in core business to grow between 15% and 25% in 2025.

KINS has been successfully lowering its net underwriting expense ratio by driving higher average premiums and lowering commissions and staffing.

This Northeast regional property and casualty insurer has a solid reinsurance program in place that shields its balance sheet from erosion. It has strengthened its balance sheet by improving its cash balance while lowering debt. 

Price Performance of KINS

KINS shares have gained 18% year to date, outperforming its industry, sector and the Zacks S&P 500 composite’s return.

Image Source: Zacks Investment Research

Shares of ROOT Inc. (ROOT Quick QuoteROOT - Free Report) , an industry player,  rallied 84.4% while that of Heritage Insurance Holdings, Inc. (HRTG Quick QuoteHRTG - Free Report)   lost 6.7% year to date.

Final Take on KINS Stock

KINS was the 15th largest homeowner insurer in New York in 2023, with a market share of 1.6%. Kingstone Companies is poised to gain from the $200 million market opportunity with its competing carriers exiting the personal property market countrywide in July 2024.

KINS’ focus on growing its core business, improving pricing and combined ratio, expanding margins and delivering strong earnings bodes well for growth. Its VGM Score of A instills confidence in the stock.

The average target price of $17 reflects a 9.7% upside potential to the last closing price. 

However, KINS shares are trading at a premium to the industry. Its price-to-book value of 3.36X is higher than the industry average of 1.63X. Also, KINS shares are trading below the 50-day moving average, signaling a short-term bearish trend.

Thus, given its expensive valuation, new investors can wait for a better entry point for KINS stock.