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Kinsale Capital Trades Above 50-Day SMA: Time to Buy the Stock?

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Key Takeaways

  • KNSL leverages E&S market strength and better margins to deliver robust underwriting results.
  • A strong broker network and disciplined underwriting keep KNSL's combined ratio below 95%.
  • KNSL's proprietary tech boosts growth, lowers expenses, and enhances operational efficiency.

Kinsale Capital Group, Inc. (KNSL - Free Report) has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend. Its share price as of Friday was $480.18, down 9.7% from its 52-week high of $531.79.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

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KNSL’s Price Performance

Shares of Kinsale Capital have gained 3.2% year to date, underperforming its industry, the Finance sector, and the Zacks S&P 500 Composite’s growth of 4%, 9.2% and 6.5%, respectively, in the same time frame.

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, AFG and ACGL have lost 8.5%, 6.9% and 4.3%, respectively, in the year-to-date period.

The insurer has a market capitalization of $11.19 billion. The average volume of shares traded in the last three months was 0.2 million.

KNSL vs Industry, Sector & S&P 500 YTD

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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 7.07X is higher than the industry average of 1.52X.

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KNSL’s Growth Projection Encourages

The Zacks Consensus Estimate for Kinsale Capital’s 2025 earnings per share indicates a year-over-year increase of 10.6%. The consensus estimate for revenues is pegged at $1.75 billion, implying a year-over-year improvement of 10.4%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 15.1% and 12%, respectively, from the corresponding 2025 estimates. 

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%.

Optimist Analyst Sentiment on KNSL

The Zacks Consensus Estimate for 2025 and 2026 earnings has moved up by 0.1% and 0.3% in the past seven days, respectively.

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Average Target Price for KNSL Suggests Upside

Based on short-term price targets offered by nine analysts, the Zacks average price target is $489.44 per share. The average suggests a potential 1.2% upside from the last closing price.

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Key Points to Note for KNSL

Kinsale Capital maintains an exclusive focus on the U.S. excess and surplus (E&S) lines market, which has demonstrated strong performance driven by improved margins and lower loss ratios. This favorable trend has contributed to robust underwriting results for the property and casualty (P&C) insurer. With ongoing market dislocation, Kinsale Capital remains well-positioned to benefit from increased submission flow and enhanced pricing discipline.

A strong network of independent brokers and disciplined underwriting has helped Kinsale Capital consistently improve its combined ratio. The company has maintained an underlying combined ratio below 95% in recent years and aims to sustain this performance.

Kinsale Capital’s proprietary technology platform gives it a competitive edge, enabling scalable growth, enhanced customer interactions, and improved cost control. Its focus on automation and analytics has helped lower the expense ratio in recent years while boosting operational efficiency.

Kinsale Capital remains cautious about the impact of persistent inflation, which could prolong hard market conditions and pressure insurer margins. The company expects inflation to drive up medical expenses, wages, construction costs, and legal fees, potentially influencing pricing strategies across the sector.

Conclusion

Kinsale Capital’s strategy centers on disciplined underwriting, a dedicated focus on the E&S market, and the use of proprietary technology to drive operational efficiency. Combined with consistent capital return initiatives through dividends and share repurchases, these elements highlight the company’s current priorities and long-term approach to business growth.

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.

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