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Why Is Amerisafe (AMSF) Down 1% Since Last Earnings Report?

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A month has gone by since the last earnings report for Amerisafe (AMSF - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Amerisafe due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Amerisafe Earnings Beat Estimates in Q1, Slide Y/Y

Amerisafe’s first-quarter 2020 earnings of 88 cents per share beat the Zacks Consensus Estimate by 20.6%. However, the bottom line was down 3.3% year over year. The estimate beat can be attributed to lower expenses, partly offset by a decline in revenues.

Quarter in Detail

Amerisafe’s operating revenues decreased 6.5% year over year to $87 million but the top line trumped the Zacks Consensus Estimate by 0.3%. The year-over-year decline was due to lower net premiums earned and soft net investment income.

Gross premiums written dropped 6.5% year over year to $87.1 million, primarily due to weak voluntary premiums. Underwriting profit of $13.1 million slid 3.7% year over year.

Net investment income slipped 3.3% year over year to $7.75 million due to lower investment yields on fixed-income securities.

Total expenses of $65.9 million were down 7.6% from the year-ago quarter owing to lower loss and loss adjustment expenses incurred as well as decreased expenses related to policyholder dividends.

Net combined ratio of 83.5% improved 50 basis points year over year.
Operating return on equity of 16.1% contracted 80 basis points year over year.
 
Dividend Hike
Amerisafe’s board of directors hiked its quarterly dividend by 8% to 27 cents per share, up from the prior dividend payout of 25 cents per share.


 

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted 5.05% due to these changes.

VGM Scores

At this time, Amerisafe has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Amerisafe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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