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Amerisafe (AMSF)
NASDAQ:AMSF
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Amerisafe
(NASDAQ:AMSF)
72Outperform
Positive Factors
Earnings
Analyst reiterates a Market Outperform rating on Amerisafe following strong results.
Premium Growth
Voluntary premium growth accelerated by 9%, reflecting increased policy count and strong retention.
Negative Factors
Financial Performance
Operating EPS was below the initial estimate, driven by a higher expense ratio and slightly lower net investment income.
Amerisafe (AMSF) vs. S&P 500 (SPY)
Market Cap
$897.27M
Dividend Yield3.18%
Average Volume (3M)111.87K
Price to Earnings (P/E)18.8
Beta (1Y)0.15
Revenue Growth-2.51%
EPS Growth-22.68%
CountryUS
Employees362
SectorFinancial
Sector Strength87
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.60
Shares Outstanding19,050,316
10 Day Avg. Volume120,655
30 Day Avg. Volume111,874
Financial Highlights & Ratios
PEG Ratio-1.29
Price to Book (P/B)3.39
Price to Sales (P/S)0.00
P/FCF Ratio53.29
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$65.00Price Target Upside37.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Amerisafe Business Overview & Revenue Model
Company DescriptionAMERISAFE, Inc., an insurance holding company, underwrites workers' compensation insurance in the United States. The company's workers' compensation insurance policies provide benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. It serves small to mid-sized employers engaged in hazardous industries, including construction, trucking, logging and lumber, agriculture, manufacturing, telecommunications, and maritime. The company was incorporated in 1985 and is based in DeRidder, Louisiana.
How the Company Makes MoneyAmerisafe generates revenue primarily through underwriting workers' compensation insurance policies. The company's key revenue stream is the collection of premiums from policyholders, which are calculated based on the level of risk associated with the insured's industry and the size of their workforce. Amerisafe's profitability is influenced by its ability to accurately assess risks, set appropriate premium rates, and manage claims efficiently. The company also earns investment income from its portfolio, which consists of premiums collected and held in reserve to pay future claims. Strategic partnerships with independent insurance agencies and brokers help Amerisafe expand its market reach and maintain a steady flow of new business.
Amerisafe Financial Statement Overview
Summary
Amerisafe demonstrates strong financial stability with zero debt and a healthy equity position, but faces challenges in maintaining profitability margins and cash flow growth. The company is well-positioned in terms of financial health but could benefit from strategies to boost revenue growth and cash flow efficiency.Income Statement
Amerisafe's income statement shows a stable revenue base with a gross profit margin of approximately 89.8% in 2024. However, the net profit margin decreased from 20.2% in 2023 to 17.9% in 2024, indicating a slight decline in profitability. The company experienced a modest revenue growth rate of 0.7% from 2023 to 2024, which suggests stability but limited growth potential. EBIT and EBITDA margins are unavailable for 2024, affecting the assessment of operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with zero total debt in 2024, resulting in a debt-to-equity ratio of 0, which is excellent for financial stability. The return on equity (ROE) decreased to 21.5% in 2024 from 21.2% in 2023, but remains robust. The equity ratio is 22.2% in 2024, showing a consistent reliance on equity financing. The absence of debt enhances financial flexibility.80
Positive
Cash Flow
Cash flow analysis indicates a decrease in free cash flow from $29.3M in 2023 to $23.3M in 2024, resulting in a negative free cash flow growth rate of -20.2%. The operating cash flow to net income ratio is 0.44 in 2024, highlighting a need for improved cash generation relative to profits. The free cash flow to net income ratio stands at 0.42, suggesting that cash management strategies could be optimized.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 301.18M | 309.04M | 306.91M | 294.69M | 316.01M | 339.50M | Gross Profit |
| 271.05M | 277.54M | 306.91M | 244.14M | 265.25M | 290.75M | EBIT |
| 59.50M | 68.99M | 279.35M | 67.65M | 79.45M | 106.92M | EBITDA |
| 18.07M | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 47.46M | 55.44M | 62.11M | 55.60M | 65.76M | 86.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 138.06M | 351.80M | 355.75M | 61.47M | 70.72M | 61.76M | Total Assets |
| 1.16B | 1.16B | 1.23B | 1.27B | 1.40B | 1.47B | Total Debt |
| 0.00 | 0.00 | 267.00K | 336.00K | 395.00K | 499.00K | Net Debt |
| -44.75M | -44.05M | -38.68M | -61.13M | -70.33M | -61.26M | Total Liabilities |
| 895.90M | 900.45M | 936.71M | 951.85M | 37.88M | 38.88M | Stockholders Equity |
| 260.81M | 257.34M | 292.45M | 317.43M | 399.32M | 438.82M |
| Cash Flow | Free Cash Flow | ||||
| 16.59M | 23.35M | 29.29M | 26.11M | 36.68M | 62.48M | Operating Cash Flow |
| 14.89M | 24.19M | 29.84M | 28.19M | 37.98M | 63.40M | Investing Cash Flow |
| 78.09M | 72.37M | 43.88M | 75.43M | 70.96M | 43.37M | Financing Cash Flow |
| -84.10M | -91.20M | -96.51M | -112.87M | -99.97M | -88.83M |
Amerisafe Technical Analysis
Negative
47.19
Price Trends
49.91
Negative
50.14
Negative
49.20
Negative
Market Momentum
-0.92
Positive
42.58
Neutral
34.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMSF, the sentiment is Negative. The current price of 47.19 is below the 20-day moving average (MA) of 48.21, below the 50-day MA of 49.91, and below the 200-day MA of 49.20, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 42.58 is Neutral, neither overbought nor oversold. The STOCH value of 34.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMSF.
Amerisafe Risk Analysis
Amerisafe disclosed 30 risk factors in its most recent earnings report. Amerisafe reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Amerisafe Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.97B | 8.20 | 17.38% | ― | 11.61% | 14.35% | |
72 Outperform | $1.17B | 11.66 | 9.84% | 2.42% | -0.88% | -12.63% | |
72 Outperform | $897.27M | 18.75 | 16.89% | 3.18% | -2.51% | -22.68% | |
69 Neutral | $453.14M | 14.44 | 11.69% | 0.78% | 15.22% | 19.19% | |
67 Neutral | $803.94M | 17.22 | 11.12% | 1.12% | 15.76% | 105.98% | |
64 Neutral | $12.60B | 9.73 | 7.92% | 16985.68% | 12.21% | -5.61% | |
52 Neutral | $220.01M | ― | -11.67% | 2.58% | -23.55% | 0.38% |
* Financial Sector Average
Performance Comparison
AMSF
Amerisafe
47.19
4.30
10.03%
EIG
Employers Holdings
49.63
7.10
16.69%
ITIC
Investors Title Company
234.99
84.12
55.76%
NMIH
NMI Holdings
37.88
4.43
13.24%
TIPT
Tiptree Financial
21.36
5.04
30.88%
JRVR
James River Group
4.66
-3.25
-41.09%
Amerisafe Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -5.32%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant growth in gross written premiums and strong policy retention, indicating positive operational performance. However, the financial results were marred by a significant decrease in net income, increased expenses, and a higher tax rate. The highlights and lowlights are fairly balanced, reflecting both achievements in policy retention and challenges in financial metrics.Q1-2025 Updates
Positive Updates
Gross Written Premiums Growth
Gross written premiums grew 4.6% over the first quarter of 2024, driven by consistent new business gains and strong premium retention. Premiums on policies written in the quarter grew 7.1% over the prior year quarter.
Strong Policy Retention
The company achieved a 93.1% retention rate in the first quarter, indicating strong policyholder loyalty and satisfaction.
Favorable Development on Prior Accident Years
The company experienced $8.7 million in favorable development on prior accident years, primarily from accident years 2020 and 2021, attributed to proactive claims handling.
Investment Portfolio Performance
The investment portfolio maintained a high quality with an average AA- credit rating and a yield on new investments exceeding portfolio roll off by 296 basis points.
Negative Updates
Decrease in Net Income
Net income for the first quarter of 2025 was $8.9 million, compared to $16.9 million in the first quarter of 2024. The decrease was primarily driven by lower valuations across equity holdings, resulting in a net unrealized loss on equity securities of $3.2 million.
Increased Underwriting and Other Expenses
Total underwriting and other expenses were $20.6 million, a $1.9 million increase compared with the first quarter of 2024, resulting in an expense ratio of 29.9% compared to 27.3% in the previous year.
Decrease in Net Investment Income
Net investment income decreased by 9.7% to $6.7 million, driven by a decrease in investable assets following the payment of a special dividend.
Higher Tax Rate
The company's tax rate increased to 20.2% from 18.4% in the first quarter of 2024, largely due to an increase in the proportion of underwriting income versus tax-exempt investment income.
Company Guidance
During the AMERISAFE First Quarter 2025 Earnings Call, the company reported a 4.6% increase in gross written premiums to $83.8 million compared to the same quarter in 2024, despite challenges from declining workers' compensation rates and economic uncertainties. Premiums on newly written policies grew by 7.1%, while retention rates on renewals remained strong at 93.1%. The current accident year loss ratio was stable at 71%, and favorable development from prior accident years, particularly 2020 and 2021, contributed $8.7 million. Net income for the quarter was $8.9 million, or $0.47 per diluted share, down from $16.9 million in the prior year, primarily due to a $3.2 million net unrealized loss on equity securities. Operating net income was $11.4 million, or $0.60 per diluted share. Total underwriting and other expenses increased to $20.6 million, affecting the expense ratio, which rose to 29.9% from 27.3% in the first quarter of 2024. The company's investment portfolio, with a duration of 4.48 years and an average AA- credit rating, yielded a tax equivalent book yield of 3.85%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.