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James River Group Holdings Ltd (JRVR)
NASDAQ:JRVR
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James River Group
(NASDAQ:JRVR)
52Neutral
Positive Factors
Market Opportunities
The U.S. E&S market remains a dynamic and attractive area to operate.
Risk Mitigation
James River completed two reinsurance agreements that should protect against any development in their 2010-2023 casualty reserves.
Strategic Growth Initiatives
Management emphasized that their strategic actions should position the company for future growth and profitability.
Negative Factors
Financial Performance
James River reported adjusted 4Q operating EPS of ($0.99), impacted mainly by the $53 million consideration paid in connection with the E&S adverse development reinsurance contract.
Investor Confidence
It will likely take some time for management to regain the confidence of investors and prove the effectiveness of their recent actions.
Operational Efficiency
The aggregate company-wide combined ratio was 155.1%, which was higher than expected.
James River Group (JRVR) vs. S&P 500 (SPY)
Market Cap
$220.01M
Dividend Yield2.44%
Average Volume (3M)232.99K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth-23.55%
EPS Growth0.38%
CountryUS
Employees645
SectorFinancial
Sector Strength83
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.17
Shares Outstanding45,644,318
10 Day Avg. Volume192,266
30 Day Avg. Volume232,993
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap3.24
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.01
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.81Price Target Upside41.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
James River Group Business Overview & Revenue Model
Company DescriptionJames River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. It operates through Excess and Surplus Lines, Specialty Admitted Insurance, and Casualty Reinsurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The Specialty Admitted Insurance segment provides workers' compensation coverage for building trades, healthcare employees, goods and services, light manufacturing, specialty transportation, and agriculture, as well as fronting and program business. The Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and other insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.
How the Company Makes MoneyJames River Group makes money by underwriting insurance policies and collecting premiums from its customers. The company's revenue model revolves around its three core segments. In the Excess and Surplus Lines segment, JRVR offers insurance products for risks that are hard to place in the standard market, charging premiums that reflect the specialized nature of the coverage. In the Specialty Admitted Insurance segment, the company provides customized insurance solutions that are admitted in certain states, allowing it to leverage regulatory approvals to access broader markets. The Casualty Reinsurance segment contributes to revenue by providing reinsurance solutions to other insurance companies, thereby earning premiums for assuming portions of their risk. Additionally, James River Group generates investment income from its portfolio of invested assets, which enhances its overall earnings. Strategic partnerships and a focus on niche markets further contribute to its profitability by allowing the company to capitalize on specialized expertise and market gaps.
James River Group Financial Statement Overview
Summary
James River Group faces challenges with profitability and cash flow. Revenue volatility and consistent net losses strain financial health, despite a strong equity position. Negative cash flow from operations raises liquidity concerns.Income Statement
The company's revenue has shown significant volatility, with a recent decline from $812 million in 2023 to $707 million in 2024. The net profit margin is negative due to consistent net losses over the years, indicating ongoing profitability challenges. The gross profit margin remains stable, but negative EBIT and EBITDA margins highlight operational inefficiencies.―
Balance Sheet
The balance sheet shows a strong equity position with a debt-to-equity ratio of 0 as of 2024, indicating no financial leverage. However, the company's total assets have decreased significantly, and the return on equity is negative due to net losses, pointing to underperformance in asset utilization.55
Cash Flow
Cash flow from operations turned negative in 2024, reflecting challenges in generating cash from core activities. The free cash flow has also deteriorated, although the company had positive free cash flow in previous years, indicating potential liquidity risks if negative trends continue.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 707.63M | 812.01M | 813.70M | 772.88M | 668.69M | Gross Profit |
| 707.26M | 617.99M | 617.78M | 607.83M | 502.65M | EBIT |
| -63.49M | 0.00 | 67.65M | -200.89M | 7.39M | EBITDA |
| -63.49M | 111.07M | 1.08B | -94.49M | 26.99M | Net Income Common Stockholders |
| -81.12M | -107.68M | 30.97M | -172.80M | 4.82M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 64.53M | 1.96M | 2.06B | 2.00B | 2.08B | Total Assets |
| 5.01B | 5.32B | 5.14B | 4.95B | 5.06B | Total Debt |
| 304.86M | 326.36M | 326.36M | 366.36M | 366.36M | Net Debt |
| -57.49M | 52.06M | 153.19M | 176.23M | 204.09M | Total Liabilities |
| 4.41B | 4.64B | 4.44B | 4.22B | 4.27B | Stockholders Equity |
| 460.92M | 679.52M | 698.66M | 725.36M | 795.61M |
| Cash Flow | Free Cash Flow | |||
| -251.97M | 81.52M | 214.51M | -919.85M | -274.38M | Operating Cash Flow |
| -247.09M | 87.95M | 222.73M | -913.55M | -273.83M | Investing Cash Flow |
| 141.97M | 16.73M | -328.15M | 35.82M | -175.99M | Financing Cash Flow |
| -52.21M | -21.11M | 89.67M | 147.67M | 65.92M |
James River Group Technical Analysis
Positive
4.80
Price Trends
4.27
Positive
4.51
Positive
5.47
Negative
Market Momentum
0.16
Negative
65.02
Neutral
64.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JRVR, the sentiment is Positive. The current price of 4.8 is above the 20-day moving average (MA) of 4.47, above the 50-day MA of 4.27, and below the 200-day MA of 5.47, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 65.02 is Neutral, neither overbought nor oversold. The STOCH value of 64.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JRVR.
James River Group Risk Analysis
James River Group disclosed 61 risk factors in its most recent earnings report. James River Group 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
James River Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $897.27M | 18.75 | 16.89% | 3.22% | -2.51% | -22.68% | |
69 Neutral | $453.14M | 14.44 | 12.35% | 0.78% | 14.93% | 43.88% | |
64 Neutral | $12.51B | 9.81 | 7.92% | 16985.69% | 12.67% | -5.98% | |
55 Neutral | $604.22M | ― | -10.95% | ― | 77.44% | 85.53% | |
52 Neutral | $220.01M | ― | -9.97% | 2.44% | -23.55% | 0.38% | |
48 Neutral | $414.35M | 5.59 | 2.04% | ― | 46.32% | 640.18% | |
28 Underperform | $233.72M | ― | 26.69% | ― | 583.33% | 6.59% |
* Financial Sector Average
Performance Comparison
JRVR
James River Group
4.80
-3.56
-42.58%
AMSF
Amerisafe
46.41
2.70
6.18%
ITIC
Investors Title Company
239.00
88.45
58.75%
MBI
MBIA
4.64
-2.14
-31.56%
AMBC
Ambac Financial
8.10
-10.22
-55.79%
HIPO
Hippo Holdings
24.46
5.94
32.07%
James River Group Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: -2.24%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balance of positive developments, such as strong performance in the E&S segment and successful resolution of the purchase price adjustment, against challenges like declining premiums in the Specialty Admitted segment and increased expenses. While the company shows a focus on profitability and growth, there are areas of concern that need to be addressed.Q1-2025 Updates
Positive Updates
Successful Conclusion of Purchase Price Adjustment
The company concluded the post-close purchase price adjustment process for the former Bermuda Reinsurance segment with a downward adjustment of approximately $500,000, significantly less than the $54 million initially claimed by the purchaser.
Strong E&S Segment Performance
The E&S segment had a combined ratio of 91.5% for Q1 with $11.7 million of underwriting income. The accident year loss ratio improved slightly to 63.4%.
Growth in Tangible Common Book Value
Tangible common book value per share grew by 6.6% to $7.11.
Renewal Rate Increases
The first quarter saw renewal rates up 7.8% in the Process segment, with several divisions experiencing double-digit increases, including Environmental, Energy, and Excess Casualty.
Net Income and Operating Return
Net income from continuing operations was $0.18 per share with an 11.5% adjusted net operating return on tangible common equity.
Negative Updates
Decline in Specialty Admitted Gross Written Premiums
Gross written premiums in the Specialty Admitted segment declined 21% compared to the prior year quarter, driven by reduced primary commercial auto exposure.
Increased Expense Ratio
The expense ratio increased to 32.7% from 28.9% a year ago, although improvement is expected throughout the year.
Reduced Net Investment Income
Net investment income slightly decreased to $20 million from the prior year quarter due to reduced assets under management.
Challenges in Construction Claims in Florida
Elevated claim activity in the Manufacturers & Contractors book in Florida continued, partially attributed to a rush by plaintiff attorneys to file claims.
Flat Gross Premium for E&S Segment
Despite strong market conditions, gross premium for the E&S segment was essentially flat compared to the prior year.
Company Guidance
During the James River Group's Q1 2025 earnings call, the company reported a net income of $0.18 per share from continuing operations and an adjusted net operating income of $0.19 per share. The E&S segment saw significant growth, with new and renewal submissions up 6%, and strong departmental premium growth, including 26% in Environmental and 18% in Manufacturers & Contractors. The E&S segment achieved a combined ratio of 91.5% and an accident year loss ratio of 63.4%. Meanwhile, the Specialty Admitted segment reported a decline in gross written premiums by 21%, with a combined ratio of 102.1%. The company is focused on derisking the portfolio and improving profitability, reflected in a tangible common book value per share increase of 6.6% to $7.11. Additionally, investment income for the quarter was $20 million, with a new money yield in the low to mid-5s and a book yield of around 4.4%. The company is also planning to redomicile to the U.S. to reduce its effective tax rate, expecting an expense reduction of $3 million to $6 million annually.James River Group Corporate Events
Business Operations and StrategyFinancial Disclosures
James River Group Highlights Strategic Repositioning in Q4 2024
Positive
Mar 13, 2025
James River Group Holdings, Ltd. has released its fourth quarter 2024 investor presentation, highlighting its strategic repositioning around core strengths in insurance operations and a strong market backdrop. The company emphasizes its enhanced enterprise risk management profile, substantial adverse reinsurance coverage, and a focus on the small and middle market, positioning itself as a market leader in the E&S sector with minimal property catastrophe exposure.
Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
James River Group Announces Leadership Changes and Dividend
Neutral
Mar 3, 2025
On February 27, 2025, Ollie L. Sherman, Jr. resigned as a director of James River Group, effective April 30, 2025, with no disagreements cited. Christine LaSala was appointed as the new Non-Executive Chairperson on February 20, 2025. The company also declared a cash dividend of $0.01 per share, payable on March 31, 2025. James River reported a net loss of $92.7 million for Q4 2024, largely due to a $52.8 million reinsurance contract payment and a $27 million deemed dividend. Despite these losses, strategic actions in 2024, including the sale of JRG Reinsurance and partnerships with Enstar, have strengthened the company’s balance sheet. The E&S segment saw a slight premium increase, and the company achieved its highest submission growth in five years. The Specialty Admitted Insurance segment improved its combined ratio, and net investment income rose by 10.8% in 2024.
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.