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Why Is Palomar (PLMR) Down 9.1% 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 lost about 9.1% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Palomar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Palomar Q1 Earnings, Revenues Top Estimates, Investment Income Rises Y/Y
Palomar Holdings, Inc. reported first-quarter 2026 operating income of $2.31 per share, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 23.5% year over year. Total revenues improved 58.7% year over year to $281 million, mainly driven by higher premiums, commission, investment income and other income. The top line beat the Zacks Consensus Estimate by 7.8%. Palomar delivered robust first-quarter premium and revenue growth, supported by higher net earned premiums and investment income. However, higher losses and underwriting expenses pressured profitability, leading to a decline in underwriting income.
Behind the Headlines
Gross written premiums increased 42.4% year over year to $629.8 million but missed our estimate of $659.9 million. Net earned premiums rose 59.3% year over year to $261.4 million, exceeding our estimate of $236.6 million and the Zacks Consensus Estimate of $242.5 million.
Net investment income climbed 49% year over year to $18 million, driven by higher yields on invested assets and a larger average investment balance supported by strong operating cash flow. The figure surpassed both the Zacks Consensus Estimate of $16.6 million and our estimate of $16.4 million. Palomar reported adjusted underwriting income of $62.8 million, marking a 21.6% increase from the prior-year level. Reported underwriting income fell 8% year over year to $40.5 million, missing our estimate of $48.1 million.
Total expenses rose 86.5% year over year to $225.5 million due to higher losses and loss adjustment expenses, increased acquisition costs, elevated underwriting expenses and higher interest expense. The figure exceeded our estimate of $189.6 million. The loss ratio was 33.3%, deteriorated 970 basis points year over year. It was higher than our estimate of 30% and the Zacks Consensus Estimate of 32.1%. The adjusted combined ratio worsened 750 basis points year over year to 76%, above the Zacks Consensus Estimate of 74.9%.
PLMR’s Financial Update
Cash and cash equivalents declined 47.1% to $56.5 million from the 2025-end level. Shareholders’ equity increased 1.7% to $959 million from the 2025-end level. Annualized adjusted return on equity for the first quarter of 2026 was 26.6%, down 40 basis points year over year.
PLMR’s Capital Deployment
During the quarter, the company repurchased 0.2 million shares for $23.1 million. On April 30, 2026, the board of directors approved a share repurchase program, effective May 6, 2026, replacing the previous program, and authorized the company to buyback up to $200 million worth shares through May 6, 2028.
PLMR’s 2026 Guidance
The company expects to achieve adjusted net income in the range of $262-$278 million. This includes an estimate in the range of $8-$12 million for catastrophe losses for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -6.54% due to these changes.
VGM Scores
At this time, Palomar has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
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. Interestingly, 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, Hanover Insurance Group (THG - Free Report) , has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Hanover Insurance reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $5.25 for the same period compares with $3.87 a year ago.
Hanover Insurance is expected to post earnings of $3.87 per share for the current quarter, representing a year-over-year change of -11%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Hanover Insurance has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Palomar (PLMR) Down 9.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Palomar (PLMR - Free Report) . Shares have lost about 9.1% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Palomar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Palomar Q1 Earnings, Revenues Top Estimates, Investment Income Rises Y/Y
Palomar Holdings, Inc. reported first-quarter 2026 operating income of $2.31 per share, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased 23.5% year over year. Total revenues improved 58.7% year over year to $281 million, mainly driven by higher premiums, commission, investment income and other income. The top line beat the Zacks Consensus Estimate by 7.8%. Palomar delivered robust first-quarter premium and revenue growth, supported by higher net earned premiums and investment income. However, higher losses and underwriting expenses pressured profitability, leading to a decline in underwriting income.
Behind the Headlines
Gross written premiums increased 42.4% year over year to $629.8 million but missed our estimate of $659.9 million. Net earned premiums rose 59.3% year over year to $261.4 million, exceeding our estimate of $236.6 million and the Zacks Consensus Estimate of $242.5 million.
Net investment income climbed 49% year over year to $18 million, driven by higher yields on invested assets and a larger average investment balance supported by strong operating cash flow. The figure surpassed both the Zacks Consensus Estimate of $16.6 million and our estimate of $16.4 million. Palomar reported adjusted underwriting income of $62.8 million, marking a 21.6% increase from the prior-year level. Reported underwriting income fell 8% year over year to $40.5 million, missing our estimate of $48.1 million.
Total expenses rose 86.5% year over year to $225.5 million due to higher losses and loss adjustment expenses, increased acquisition costs, elevated underwriting expenses and higher interest expense. The figure exceeded our estimate of $189.6 million. The loss ratio was 33.3%, deteriorated 970 basis points year over year. It was higher than our estimate of 30% and the Zacks Consensus Estimate of 32.1%. The adjusted combined ratio worsened 750 basis points year over year to 76%, above the Zacks Consensus Estimate of 74.9%.
PLMR’s Financial Update
Cash and cash equivalents declined 47.1% to $56.5 million from the 2025-end level. Shareholders’ equity increased 1.7% to $959 million from the 2025-end level. Annualized adjusted return on equity for the first quarter of 2026 was 26.6%, down 40 basis points year over year.
PLMR’s Capital Deployment
During the quarter, the company repurchased 0.2 million shares for $23.1 million. On April 30, 2026, the board of directors approved a share repurchase program, effective May 6, 2026, replacing the previous program, and authorized the company to buyback up to $200 million worth shares through May 6, 2028.
PLMR’s 2026 Guidance
The company expects to achieve adjusted net income in the range of $262-$278 million. This includes an estimate in the range of $8-$12 million for catastrophe losses for the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -6.54% due to these changes.
VGM Scores
At this time, Palomar has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
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. Interestingly, 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, Hanover Insurance Group (THG - Free Report) , has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
Hanover Insurance reported revenues of $1.7 billion in the last reported quarter, representing a year-over-year change of +5.1%. EPS of $5.25 for the same period compares with $3.87 a year ago.
Hanover Insurance is expected to post earnings of $3.87 per share for the current quarter, representing a year-over-year change of -11%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Hanover Insurance has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.