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KNSL Lags Industry, Trades at Premium: How to Play the Stock
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Key Takeaways
KNSL gains from well-performing excess and surplus market, where high retention rates support premium growth.
Free cash flow conversion has consistently exceeded 85% in recent quarters, reflecting earnings stability.
A proprietary technology platform and data analytics drive operational efficiency and improved expense ratios.
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 17.4% in the past year, underperforming its industry and the Finance sector’s growth of 17.5% and 18.2%, respectively. It, however, outperformed the Zacks S&P 500 composite’s return of 9.5%.
Kinsale Capital has outperformed its peers, including CNA Financial Corporation (CNA - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . Shares of CNA have gained 1.7%, while AFG and ACGL shares have lost 2.9% and 11.4%, respectively, in the past year.
KNSL vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
The insurer has a market capitalization of $10.74 billion. The average volume of shares traded in the last three months was 0.2 million.
KNSL’s Growth Projection Encourages
The Zacks Consensus Estimate for Kinsale Capital’s 2025 earnings per share indicates a year-over-year increase of 10%. The consensus estimate for revenues is pegged at $1.75 billion, implying a year-over-year improvement of 10.2%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.8% and 12.5%, respectively, from the corresponding 2025 estimates.
Earnings have grown 44.3% in the past five years, better than the industry average of 20.8%. The expected long-term earnings growth rate is 15%, outperforming the industry average of 6.8%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Earnings Surprise History
Kinsale Capital surpassed earnings estimates in each of the last four quarters, the average being 11.07%.
KNSL’s Favorable Return on Capital
Kinsale Capital’s return on equity (ROE) of 26.37% for the trailing 12 months compared favorably with the industry’s 7.8%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. KNSL’s ROIC of 22.7% for the trailing 12 months compared favorably with the industry’s 5.9%.
Mixed Analyst Sentiment on KNSL
Six of the eight analysts covering the stock have raised estimates for 2025, while six of the seven analysts have lowered the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 earnings has moved up 2.2% in the past 60 days, while the same for 2026 has moved down 1.7% in the same time frame.
Image Source: Zacks Investment Research
KNSL Shares are Overvalued
Kinsale Capital shares are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 6.79X is higher than the industry average of 1.55X.
Image Source: Zacks Investment Research
Average Target Price for KNSL Suggests Upside
Based on short-term price targets offered by eight analysts, the Zacks average price target is $474.63 per share. The average suggests a potential 2.9% upside from the last closing price.
Image Source: Zacks Investment Research
Key Drivers of KNSL Stock
A strong presence across the excess and supply (E&S) market in the United States and high retention rates stemming from contract renewals should drive improved premiums. Management noted that the E&S market has grown significantly and generated better underwriting results than the broader P&C industry. It remains well-positioned to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL has been successfully delivering improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and is less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term.
KNSL is well-positioned to generate an improved expense ratio, given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business. The insurer drives profitability and operational efficiency using analytics.
Despite a low-interest rate environment, investment income should benefit from the investment of excess operating funds. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Parting Thoughts
Kinsale Capital is poised to gain from its focus on the E&S market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment.
The insurer has an impressive dividend history, increasing dividends since 2017 at a seven-year CAGR (2017-2024) of 12.1%, riding on the strength of operational excellence that supports a solid capital position. As part of wealth distribution, in October 2024, the board of directors authorized a share repurchase program authorizing the repurchase of up to $100 million of common stock.
Image: Bigstock
KNSL Lags Industry, Trades at Premium: How to Play the Stock
Key Takeaways
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 17.4% in the past year, underperforming its industry and the Finance sector’s growth of 17.5% and 18.2%, respectively. It, however, outperformed the Zacks S&P 500 composite’s return of 9.5%.
Kinsale Capital has outperformed its peers, including CNA Financial Corporation (CNA - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . Shares of CNA have gained 1.7%, while AFG and ACGL shares have lost 2.9% and 11.4%, respectively, in the past year.
KNSL vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
The insurer has a market capitalization of $10.74 billion. The average volume of shares traded in the last three months was 0.2 million.
KNSL’s Growth Projection Encourages
The Zacks Consensus Estimate for Kinsale Capital’s 2025 earnings per share indicates a year-over-year increase of 10%. The consensus estimate for revenues is pegged at $1.75 billion, implying a year-over-year improvement of 10.2%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.8% and 12.5%, respectively, from the corresponding 2025 estimates.
Earnings have grown 44.3% in the past five years, better than the industry average of 20.8%. The expected long-term earnings growth rate is 15%, outperforming the industry average of 6.8%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Earnings Surprise History
Kinsale Capital surpassed earnings estimates in each of the last four quarters, the average being 11.07%.
KNSL’s Favorable Return on Capital
Kinsale Capital’s return on equity (ROE) of 26.37% for the trailing 12 months compared favorably with the industry’s 7.8%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income. KNSL’s ROIC of 22.7% for the trailing 12 months compared favorably with the industry’s 5.9%.
Mixed Analyst Sentiment on KNSL
Six of the eight analysts covering the stock have raised estimates for 2025, while six of the seven analysts have lowered the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 earnings has moved up 2.2% in the past 60 days, while the same for 2026 has moved down 1.7% in the same time frame.
Image Source: Zacks Investment Research
KNSL Shares are Overvalued
Kinsale Capital shares are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 6.79X is higher than the industry average of 1.55X.
Image Source: Zacks Investment Research
Average Target Price for KNSL Suggests Upside
Based on short-term price targets offered by eight analysts, the Zacks average price target is $474.63 per share. The average suggests a potential 2.9% upside from the last closing price.
Image Source: Zacks Investment Research
Key Drivers of KNSL Stock
A strong presence across the excess and supply (E&S) market in the United States and high retention rates stemming from contract renewals should drive improved premiums. Management noted that the E&S market has grown significantly and generated better underwriting results than the broader P&C industry. It remains well-positioned to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL has been successfully delivering improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and is less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term.
KNSL is well-positioned to generate an improved expense ratio, given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business. The insurer drives profitability and operational efficiency using analytics.
Despite a low-interest rate environment, investment income should benefit from the investment of excess operating funds. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Parting Thoughts
Kinsale Capital is poised to gain from its focus on the E&S market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment.
The insurer has an impressive dividend history, increasing dividends since 2017 at a seven-year CAGR (2017-2024) of 12.1%, riding on the strength of operational excellence that supports a solid capital position. As part of wealth distribution, in October 2024, the board of directors authorized a share repurchase program authorizing the repurchase of up to $100 million of common stock.
However, given its expensive valuation, it is better to wait for some more time before taking a call on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.