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PLMR Stock Outperforms Industry: Time to Add it for Better Returns?
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Key Takeaways
PLMR launched PLMR-FRONT, a fee-based platform expected to aid medium-term growth and strengthen earnings.
PLMR sees premium growth from strong retention, new geographies, added partners and expansion across lines.
PLMR raised 2026 adjusted net income outlook to $260-$275M, aided by investments & risk transfer strategy.
Shares of Palomar Holdings, Inc. (PLMR - Free Report) have gained 0.5% in the past six months against the industry’s decline of 2%.
Shares of other peers, The Allstate Corporation (ALL - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) have also outperformed the industry in the past six months.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $3.32 billion. The average volume of shares traded in the last three months was 0.2 million. Palomar Holdings beat earnings estimates in each of the past four quarters, with an average surprise of 14.19%.
PLMR’s Encouraging Growth Projection
The Zacks Consensus Estimate for Palomar Holdings’ 2026 earnings per share indicates a year-over-year increase of 22.5%. The consensus estimate for revenues is pegged at $1.15 billion, implying a year-over-year improvement of 33.1%. The consensus estimate for 2027 earnings per share and revenues indicates an increase of 13.1% and 19.6%, respectively, from the corresponding 2025 estimates. Palomar Holdings has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Optimist Analyst Sentiment on PLMR
Each of the five analysts covering the stock has raised estimates for 2026, and three of the four analysts have raised the same for 2027 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 11.5% and 13.3%, respectively, in the past 30 days.
Average Target Price for PLMR Suggests Upside
Based on short-term price targets offered by six analysts, the Zacks average price target is $165.67 per share. The average suggests a potential 32.7% upside from the last closing price.
Image Source: Zacks Investment Research
PLMR’s Return on Capital
Return on equity is a measure of profitability reflecting how efficiently the company is utilizing its shareholders’ equity. Return on equity of 25% compared favorably with the industry’s average of 8%.
Also, the return on invested capital in the trailing 12 months was 21.8%, better than the industry average of 6.2%, reflecting the company’s efficiency in utilizing funds to generate income.
Factors Driving PLMR
Palomar Holdings’ fee-based platform, PLMR-FRONT, is positioned to drive medium-term growth. The addition of this revenue stream is expected to strengthen its earnings foundation.
The increasing volume of policies across multiple business lines, strong retention rates, expansion into new geographic areas and distribution channels, and the formation of new partnerships are expected to drive premiums.
PLMR identifies Surety as an attractive, long-term growth opportunity. Like crop insurance, Surety is not correlated with the traditional property and casualty insurance cycle, offering diversification and stability.
Net investment income is expected to rise, supported by a high-quality fixed-income portfolio, higher average investment balances and improved yields. This solid investment base is poised to generate strong returns.
Palomar Holdings’ risk transfer strategy reduces exposure to major catastrophic events, helping to stabilize earnings and improve its combined ratio.
Financially, the insurer maintains a strong capital position and a debt-free balance sheet. As part of its shareholder return initiatives, Palomar Holdings continues to execute share buybacks.
With these strengths in place, Palomar Holdings expects adjusted net income to be in the range of $260-$275 million in 2026, up from the earlier guidance of $$210-$215 million.
Conclusion
Palomar Holdings is positioning itself as a key player in the crop insurance sector, with its growing emphasis on Surety signaling strong prospects for future expansion. The company’s diverse product suite, ongoing geographic growth, onboarding of new producers, strategic partnerships with other insurers and implemented rate increases are all poised to fuel its momentum.
As a specialty insurer, PLMR leverages reinsurance to effectively mitigate risk exposure. This strategy enables the company to underwrite policies with sufficient coverage while managing potential losses, contributing to a stable and resilient business model. Coupled with the solid growth projections, as well as strong fundamentals and favorable return on capital, as well as optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PLMR has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.
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PLMR Stock Outperforms Industry: Time to Add it for Better Returns?
Key Takeaways
Shares of Palomar Holdings, Inc. (PLMR - Free Report) have gained 0.5% in the past six months against the industry’s decline of 2%.
Shares of other peers, The Allstate Corporation (ALL - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) have also outperformed the industry in the past six months.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $3.32 billion. The average volume of shares traded in the last three months was 0.2 million.
Palomar Holdings beat earnings estimates in each of the past four quarters, with an average surprise of 14.19%.
PLMR’s Encouraging Growth Projection
The Zacks Consensus Estimate for Palomar Holdings’ 2026 earnings per share indicates a year-over-year increase of 22.5%. The consensus estimate for revenues is pegged at $1.15 billion, implying a year-over-year improvement of 33.1%. The consensus estimate for 2027 earnings per share and revenues indicates an increase of 13.1% and 19.6%, respectively, from the corresponding 2025 estimates.
Palomar Holdings has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Optimist Analyst Sentiment on PLMR
Each of the five analysts covering the stock has raised estimates for 2026, and three of the four analysts have raised the same for 2027 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 11.5% and 13.3%, respectively, in the past 30 days.
Average Target Price for PLMR Suggests Upside
Based on short-term price targets offered by six analysts, the Zacks average price target is $165.67 per share. The average suggests a potential 32.7% upside from the last closing price.
Image Source: Zacks Investment Research
PLMR’s Return on Capital
Return on equity is a measure of profitability reflecting how efficiently the company is utilizing its shareholders’ equity. Return on equity of 25% compared favorably with the industry’s average of 8%.
Also, the return on invested capital in the trailing 12 months was 21.8%, better than the industry average of 6.2%, reflecting the company’s efficiency in utilizing funds to generate income.
Factors Driving PLMR
Palomar Holdings’ fee-based platform, PLMR-FRONT, is positioned to drive medium-term growth. The addition of this revenue stream is expected to strengthen its earnings foundation.
The increasing volume of policies across multiple business lines, strong retention rates, expansion into new geographic areas and distribution channels, and the formation of new partnerships are expected to drive premiums.
PLMR identifies Surety as an attractive, long-term growth opportunity. Like crop insurance, Surety is not correlated with the traditional property and casualty insurance cycle, offering diversification and stability.
Net investment income is expected to rise, supported by a high-quality fixed-income portfolio, higher average investment balances and improved yields. This solid investment base is poised to generate strong returns.
Palomar Holdings’ risk transfer strategy reduces exposure to major catastrophic events, helping to stabilize earnings and improve its combined ratio.
Financially, the insurer maintains a strong capital position and a debt-free balance sheet. As part of its shareholder return initiatives, Palomar Holdings continues to execute share buybacks.
With these strengths in place, Palomar Holdings expects adjusted net income to be in the range of $260-$275 million in 2026, up from the earlier guidance of $$210-$215 million.
Conclusion
Palomar Holdings is positioning itself as a key player in the crop insurance sector, with its growing emphasis on Surety signaling strong prospects for future expansion. The company’s diverse product suite, ongoing geographic growth, onboarding of new producers, strategic partnerships with other insurers and implemented rate increases are all poised to fuel its momentum.
As a specialty insurer, PLMR leverages reinsurance to effectively mitigate risk exposure. This strategy enables the company to underwrite policies with sufficient coverage while managing potential losses, contributing to a stable and resilient business model. Coupled with the solid growth projections, as well as strong fundamentals and favorable return on capital, as well as optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PLMR has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.