Universal Insurance Holdings (UVE) AI Stock Analysis

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Universal Insurance Holdings

(NYSE:UVE)

75Outperform

Universal Insurance Holdings commands a strong stock score primarily due to its solid financial performance, highlighted by robust cash flow management and low leverage. The technical analysis suggests upward momentum, although caution is advised due to near overbought conditions. Valuation metrics indicate potential undervaluation, offering attractive income through dividends. The earnings call confirms a positive outlook with revenue growth and strategic achievements, though with some regional challenges. Collectively, these factors reinforce a well-balanced investment case.

Universal Insurance Holdings (UVE) vs. S&P 500 (SPY)

Market Cap

$744.15M

Dividend Yield2.42%

Average Volume (3M)246.57K

Price to Earnings (P/E)11.6

Beta (1Y)0.52

Revenue Growth7.24%

EPS Growth-9.28%

CountryUS

Employees1,068

SectorFinancial

Sector Strength84

IndustryInsurance - Property & Casualty

Share Statistics

EPS (TTM)1.44

Shares Outstanding28,144,678

10 Day Avg. Volume331,854

30 Day Avg. Volume246,567

Financial Highlights & Ratios

PEG Ratio0.70

Price to Book (P/B)1.68

Price to Sales (P/S)0.00

P/FCF Ratio3.06

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.00

Price Target Upside2.12% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Universal Insurance Holdings Business Overview & Revenue Model

Company DescriptionUniversal Insurance Holdings, Inc. (UVE) is a leading insurance holding company based in the United States. It primarily operates through its subsidiaries to offer a wide range of insurance products and services. The company specializes in providing homeowners' insurance, which forms the core of its offerings, along with complementary products such as renters and condominium insurance. UVE is committed to delivering quality insurance solutions tailored to the needs of its customers, leveraging its extensive industry expertise and innovative approaches.

How the Company Makes MoneyUniversal Insurance Holdings generates revenue primarily through the underwriting of insurance policies and the collection of premiums from policyholders. The company's key revenue streams include the premiums earned from its homeowners' insurance products, which constitute the majority of its income. UVE also invests a portion of the premiums it collects, generating additional income from investment activities. The company's earnings are influenced by factors such as underwriting profitability, loss ratios, and investment performance. Significant partnerships with reinsurance companies help UVE manage risk and stabilize its financial outcomes, contributing to its overall revenue model.

Universal Insurance Holdings Financial Statement Overview

Summary

Universal Insurance Holdings demonstrates solid financial health with a strong cash flow position and a low leverage balance sheet, indicating stability and prudent financial management. The income statement shows steady revenue growth and profitability, although there is room for margin improvement. Overall, the financial statements reflect a well-managed company with a promising outlook, particularly in terms of cash flow and financial stability.

Income Statement

Positive

The income statement reflects a strong gross profit margin of approximately 74.4% for TTM, indicating efficient cost management and strong pricing power. The net profit margin is 4.3%, showing profitability but with room for improvement. Revenue growth from 2024 to TTM is approximately 1.6%, which is moderate. The EBIT margin is 6.3%, and the EBITDA margin is 4.1%, suggesting some operational efficiency but potential areas for cost reduction. Overall, the company shows stable revenue growth and profitability, with potential for higher margins.

Balance Sheet

Positive

The balance sheet is relatively strong with a debt-to-equity ratio of 0.24, indicating low leverage and a conservative capital structure. The return on equity for TTM is around 15.8%, showcasing effective use of equity to generate profits. The equity ratio is 19.8%, which reflects a moderate level of financial stability. However, the company's total assets have decreased since 2024, primarily due to reduced cash and equivalents. The overall balance sheet indicates a financially stable company with low leverage but room for improving the equity base.

Cash Flow

Positive

The cash flow statement is robust, with a significant operating cash flow to net income ratio of about 3.62 for TTM, demonstrating strong cash generation relative to profits. The free cash flow to net income ratio is high at 3.49, indicating excellent cash conversion. Free cash flow grew substantially from 2024 to TTM by approximately 78.9%, showing improved cash management. Overall, the cash flow analysis highlights strong liquidity and efficient cash flow management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.55B	1.52B	1.39B	1.22B	1.12B	1.07B
	Gross Profit
1.55B	1.52B	1.39B	1.22B	1.03B	982.14M
	EBIT
96.73M	91.09M	1.09B	-12.51M	20.78M	15.73M
	EBITDA
63.70M	91.09M	102.19M	-14.04M	35.98M	29.44M
	Net Income Common Stockholders
66.71M	58.93M	66.82M	-22.26M	20.41M	19.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
254.67M	419.43M	491.57M	388.71M	250.51M	167.16M
	Total Assets
1.30B	2.84B	2.32B	2.89B	2.06B	1.76B
	Total Debt
12.50M	101.24M	116.60M	102.77M	103.68M	8.46M
	Net Debt
-232.17M	-158.20M	-280.70M	-285.94M	-146.83M	-158.70M
	Total Liabilities
830.61M	2.47B	1.98B	2.60B	1.63B	1.31B
	Stockholders Equity
465.09M	373.25M	341.30M	287.90M	429.70M	449.26M
Cash Flow		Free Cash Flow
232.62M	129.99M	66.95M	319.62M	227.15M	12.13M
	Operating Cash Flow
241.21M	137.36M	70.97M	324.51M	234.38M	29.35M
	Investing Cash Flow
-195.26M	-228.09M	-15.25M	-148.86M	-229.40M	22.04M
	Financing Cash Flow
-44.09M	-47.13M	-47.12M	-37.46M	68.30M	-56.26M

Universal Insurance Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price26.44

Price Trends

50DMA

23.14

Positive

100DMA

21.54

Positive

200DMA

20.93

Positive

Market Momentum

MACD

0.96

Negative

RSI

71.47

Negative

STOCH

84.77

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UVE, the sentiment is Positive. The current price of 26.44 is above the 20-day moving average (MA) of 24.72, above the 50-day MA of 23.14, and above the 200-day MA of 20.93, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 71.47 is Negative, neither overbought nor oversold. The STOCH value of 84.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UVE.

Universal Insurance Holdings Risk Analysis

Universal Insurance Holdings disclosed 30 risk factors in its most recent earnings report. Universal Insurance Holdings 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

Universal Insurance Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFCS	77 Outperform	$728.40M	11.27	8.51%	2.24%	14.60%	―
HRTG	76 Outperform	$758.41M	9.67	27.59%	―	11.41%	53.85%
UVE	75 Outperform	$744.15M	11.60	16.95%	2.42%	7.24%	-9.28%
DGICA	74 Outperform	$730.03M	10.00	13.11%	3.34%	5.29%	1200.44%
Sector *	64 Neutral	$12.82B	9.83	7.68%	17000.34%	12.38%	-5.56%
ACIC	56 Neutral	$534.79M	7.30	31.11%	―	12.19%	5.12%
HIPO	55 Neutral	$570.31M	―	-15.58%	―	77.44%	85.53%

* Financial Sector Average

Performance Comparison

UVE

Universal Insurance Holdings

26.44

6.96

35.73%

DGICA

Donegal Group

20.66

8.04

63.71%

UFCS

United Fire Group

28.62

6.16

27.43%

ACIC

American Coastal Insurance

11.06

-2.28

-17.09%

HRTG

Heritage Insurance Holdings

24.47

15.32

167.43%

HIPO

Hippo Holdings

22.67

4.48

24.63%

Universal Insurance Holdings Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 13.77%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Positive

The earnings call displayed a generally positive outlook with significant growth in core revenue and earnings per share, successful reinsurance renewal, and a decrease in net loss ratio. However, challenges such as the decrease in direct premiums written in Florida and an increase in the net expense ratio were also noted.

Q1-2025 Updates

Positive Updates

Increase in Adjusted Diluted Earnings per Share

Adjusted diluted earnings per common share increased to $1.44 compared to $1.07 in the prior year quarter, driven by higher underwriting and net investment income, and higher commission revenue.

Growth in Core Revenue

Core revenue increased by 8.2% year over year to $394.9 million, primarily due to higher net premiums earned and net investment income.

Successful Reinsurance Renewal

Completion of 2025-2026 reinsurance renewal with $352 million of additional multiyear coverage secured before the June 1st inception date.

Decreased Net Loss Ratio

Net loss ratio decreased by 1.4 points to 70.5% compared to the prior year quarter, primarily due to lower weather losses.

Negative Updates

Decrease in Direct Premiums Written in Florida

Direct premiums written decreased by 3% in Florida, partially offsetting the 34.7% growth in other states.

Increase in Net Expense Ratio

Net expense ratio increased by 0.9 points to 24.5% compared to the prior year quarter, primarily driven by higher policy acquisition costs outside of Florida and higher other operating costs.

Company Guidance

During Universal Insurance Holdings, Inc.'s First Quarter 2025 Earnings Conference Call, the company reported several positive financial metrics and strategic achievements. Adjusted diluted earnings per common share rose to $1.44, up from $1.07 in the same quarter the previous year, driven by increased underwriting and net investment income, as well as higher commission revenue. Core revenue increased by 8.2% year-over-year to $394.9 million, largely due to growth in net premiums earned, which rose by 6.5% to $355.7 million. The net combined ratio improved to 95%, a decrease of 0.5 points from the prior year quarter, reflecting a lower net loss ratio of 70.5%. Direct premiums written also saw a growth of 4.7%, reaching $467.1 million, with a notable 34.7% increase in other states despite a 3% decrease in Florida. The company completed its 2025-2026 reinsurance renewal, securing $352 million in additional multiyear coverage, and achieved favorable reinsurance rates despite the occurrence of multiple hurricanes in 2024. The board declared a quarterly cash dividend of $0.16 per share, payable in May.

Universal Insurance Holdings Corporate Events

Stock Buyback

Universal Insurance Announces $20M Share Buyback Program

Neutral

May 1, 2025

On May 1, 2025, Universal Insurance Holdings announced a new share repurchase program, authorizing the repurchase of up to $20 million of its outstanding common stock by May 1, 2027. This move, conducted in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, is expected to impact the company’s market operations and potentially influence shareholder value.

Spark’s Take on UVE Stock

According to Spark, TipRanks’ AI Analyst, UVE is a Outperform.

Universal Insurance Holdings earns a strong overall score of 78. The company’s robust financial performance is highlighted by impressive cash flow and revenue growth, despite some margin declines. Technical analysis supports a positive momentum, complemented by a fair valuation. The recent earnings call further solidifies confidence with strong growth indicators, though regional challenges in Florida remain a concern.

To see Spark’s full report on UVE stock, click here.

DividendsFinancial Disclosures

Universal Insurance Announces Quarterly Dividend

Neutral

Apr 14, 2025

On April 14, 2025, Universal Insurance Holdings announced a quarterly cash dividend of $0.16 per share, payable on May 16, 2025, to shareholders of record by May 9, 2025. The company also revealed plans to release its first quarter earnings on April 24, 2025, followed by an earnings call on April 25, 2025, which may impact investor perceptions and market positioning.

Spark’s Take on UVE Stock

According to Spark, TipRanks’ AI Analyst, UVE is a Outperform.

Universal Insurance Holdings is showing robust financial performance driven by strong cash flow and a solid equity position. The positive technical indicators highlight potential upward momentum, although valuation and mixed earnings call results suggest some caution. The absence of any substantial debt further supports financial stability, making it a moderate investment choice in the insurance sector.

To see Spark’s full report on UVE stock, click here.

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.