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Palomar Holdings Inc (PLMR)
NASDAQ:PLMR
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Palomar Holdings
(NASDAQ:PLMR)
83Outperform
Positive Factors
Earnings
Palomar reported its tenth consecutive earnings beat with an operating EPS of $1.87, exceeding consensus expectations.
Financial Performance
Palomar's adjusted combined ratio of 69% continues to outperform industry peers, showcasing effective financial management.
Growth and Expansion
Palomar's top-line growth reached 20%, with significant strength in the earthquake insurance line, growing 23% year-over-year.
Negative Factors
Business Segment Performance
Despite overall top-line growth, Palomar's fronting business experienced a decline of more than 40% year-over-year.
Market Conditions
Palomar's growth in certain segments is challenged by declining performance in its fronting business, affecting overall business dynamics.
Palomar Holdings (PLMR) vs. S&P 500 (SPY)
Market Cap
$4.15B
Dividend YieldN/A
Average Volume (3M)367.41K
Price to Earnings (P/E)31.0
Beta (1Y)0.73
Revenue Growth46.90%
EPS Growth43.99%
CountryUS
Employees253
SectorFinancial
Sector Strength87
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.87
Shares Outstanding26,742,142
10 Day Avg. Volume388,320
30 Day Avg. Volume367,413
Financial Highlights & Ratios
PEG Ratio2.60
Price to Book (P/B)5.24
Price to Sales (P/S)0.00
P/FCF Ratio13.49
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue1.91
Enterprise Value/Gross Profit7.69
Enterprise Value/Ebitda8.30
Forecast
1Y Price Target
$169.20Price Target Upside8.95% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Palomar Holdings Business Overview & Revenue Model
Company DescriptionPalomar Holdings, Inc., an insurance holding company, provides specialty property insurance to residential and commercial customers. The company offers personal and commercial specialty property insurance products, including residential and commercial earthquake, commercial all risk, specialty homeowners, inland marine, Hawaii hurricane, and residential flood, as well as other products, such as assumed reinsurance, commercial flood, real estate error and omission, and real estate investor products. It markets and distributes its products through retail agents, wholesale brokers, program administrators, and carrier partnerships. The company was formerly known as GC Palomar Holdings. Palomar Holdings, Inc. was incorporated in 2013 and is headquartered in La Jolla, California.
How the Company Makes MoneyPalomar Holdings generates revenue primarily through the underwriting of specialty insurance policies. The company collects premiums from policyholders in exchange for providing coverage against specific risks, such as earthquakes and hurricanes. Palomar employs a focused underwriting strategy to assess and price risk accurately, allowing it to maintain profitability while offering competitive rates. Additionally, the company leverages reinsurance agreements to manage its exposure to large-scale catastrophic events, which helps stabilize its financial performance. Key revenue streams include premium income from policyholders and investment income from the company's portfolio of invested assets. Significant partnerships with reinsurers and distribution partners also contribute to Palomar's ability to expand its market reach and enhance its product offerings.
Palomar Holdings Financial Statement Overview
Summary
Palomar Holdings showcases strong financial health with substantial revenue and net income growth, a solid balance sheet, and robust cash flow generation. However, the absence of EBIT and EBITDA figures in 2024 and fluctuating total assets warrant caution. The company's strong equity position and consistent cash flow performance provide a solid foundation for future growth.Income Statement
Palomar Holdings has demonstrated strong revenue growth, with an impressive increase from $113.3M in 2019 to $553.9M in 2024. The gross profit margin is robust, consistently at 100% due to the nature of the insurance industry. Net profit margins have improved, reaching 21.2% in 2024 from 9.4% in 2019. However, the absence of EBIT and EBITDA in 2024 raises concerns about operational efficiency, affecting the overall score.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with zero debt in 2024, resulting in a favorable debt-to-equity ratio. Stockholders' equity has significantly increased, enhancing the equity ratio to 87.8% in 2024. However, fluctuations in total assets and a decrease in total liabilities indicate potential volatility. The strong equity position supports financial stability.75
Positive
Cash Flow
Palomar Holdings exhibits strong cash flow performance with free cash flow increasing substantially to $260.9M in 2024 from $38.8M in 2019. Operating cash flow to net income ratio remains robust, indicating efficient cash conversion. However, the significant increase in investing cash outflows might pose a risk to future liquidity if not managed properly.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 610.17M | 553.86M | 375.93M | 327.09M | 247.79M | 168.46M | Gross Profit |
| 524.66M | 553.86M | 375.93M | 327.09M | 247.79M | 168.46M | EBIT |
| 170.87M | 151.68M | 107.42M | 68.42M | 57.14M | 6.22M | EBITDA |
| 132.76M | 152.33M | 111.92M | 72.54M | 60.68M | 7.56M | Net Income Common Stockholders |
| 134.11M | 117.57M | 79.20M | 52.17M | 45.85M | 6.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.11B | 149.26M | 51.55M | 583.17M | 482.97M | 431.52M | Total Assets |
| 2.43B | 829.77M | 1.71B | 1.30B | 925.73M | 729.09M | Total Debt |
| 0.00 | 0.00 | 52.60M | 36.40M | 2.19M | 0.00 | Net Debt |
| -119.31M | -80.44M | 1.05M | -31.71M | -48.10M | -33.54M | Total Liabilities |
| 1.64B | 1.53B | 1.24B | 914.06M | 531.57M | 365.38M | Stockholders Equity |
| 790.45M | 729.03M | 471.25M | 384.75M | 394.17M | 363.71M |
| Cash Flow | Free Cash Flow | ||||
| 307.95M | 260.91M | 109.35M | 163.65M | 82.96M | 49.48M | Operating Cash Flow |
| 315.21M | 261.16M | 116.11M | 169.58M | 87.81M | 53.55M | Investing Cash Flow |
| -341.86M | -306.24M | -128.48M | -156.81M | -58.19M | -181.44M | Financing Cash Flow |
| 84.20M | 73.77M | -3.94M | 5.02M | -13.04M | 128.33M |
Palomar Holdings Technical Analysis
Positive
155.30
Price Trends
140.73
Positive
125.56
Positive
111.57
Positive
Market Momentum
4.92
Negative
59.00
Neutral
74.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLMR, the sentiment is Positive. The current price of 155.3 is above the 20-day moving average (MA) of 151.60, above the 50-day MA of 140.73, and above the 200-day MA of 111.57, indicating a bullish trend. The MACD of 4.92 indicates Negative momentum. The RSI at 59.00 is Neutral, neither overbought nor oversold. The STOCH value of 74.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PLMR.
Palomar Holdings Risk Analysis
Palomar Holdings disclosed 50 risk factors in its most recent earnings report. Palomar 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
Palomar 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | $4.15B | 31.01 | 20.76% | ― | 46.90% | 43.99% | |
79 Outperform | $2.41B | 19.97 | 16.03% | ― | 25.88% | 9.45% | |
75 Outperform | $3.34B | 46.10 | 12.50% | ― | 17.56% | 29.28% | |
71 Outperform | $3.35B | 11.71 | 16.71% | 2.11% | 18.27% | 385.75% | |
64 Neutral | $12.73B | 9.82 | 7.91% | 17015.08% | 12.18% | -5.69% | |
58 Neutral | $4.11B | 12.02 | 12.57% | 1.94% | -6.08% | ― | |
56 Neutral | $2.28B | ― | -35.57% | ― | 21.44% | 2.99% |
* Financial Sector Average
Performance Comparison
PLMR
Palomar Holdings
155.30
72.18
86.84%
MCY
Mercury General
60.51
4.70
8.42%
KMPR
Kemper
65.52
5.53
9.22%
LMND
Lemonade
31.97
13.34
71.60%
HGTY
Hagerty Inc Class A
9.41
0.38
4.21%
SKWD
Skyward Specialty Insurance Group, Inc.
59.75
23.31
63.97%
Palomar Holdings Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: -0.25%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant growth across key segments, continued strategic investments, and successful reinsurance placements. However, challenges remain in the form of temporary premium declines in the fronting business and rate pressures in the commercial property sector.Q1-2025 Updates
Positive Updates
Record Adjusted Net Income Growth
Adjusted net income grew 85% year-over-year to $51.3 million, demonstrating strong financial performance and the successful execution of strategic initiatives.
Sustained Premium Growth
Gross written premium increased by 20% in the first quarter, driven by new products and a balanced portfolio, with same-store premium growth at 37%.
Strong Earthquake and Hawaiian Hurricane Growth
Earthquake gross written premium grew by 23% year-over-year, and Hawaiian hurricane premiums increased by 82%, highlighting strong demand and effective market adaptation.
Casualty Segment Expansion
Casualty gross written premium grew 113% year-over-year, with strong performances in general liability, E&S casualty, real estate E&O, and environmental liability.
Crop Business Expansion
Crop franchise generated $48 million in written premium, a 25% increase year-over-year, with strategic investments in talent and geographic expansion.
Successful Reinsurance Placements
Secured $525 million in earthquake limit through the Torrey Pines Re catastrophe bond issuance and placed a new Laulima excess loss treaty, both at favorable pricing.
Raised Full-Year 2025 Guidance
Adjusted net income guidance increased to a range of $186 million to $200 million, reflecting confidence in continued growth and profitability.
Negative Updates
Fronting Business Premium Decline
Premiums in the fronting business declined 43% year-over-year due to the runoff of the Omaha National partnership, creating a temporary growth headwind.
Commercial Property Rate Pressure
Facing increased competition and rate decreases in the commercial property segment, particularly in large commercial layered and shared accounts.
Elevated Tariff Concerns
Global economic uncertainty and tariffs could increase severity across certain short-tail property products, but impacts are expected to be minimal at current levels.
Expenses from Crop Business Acquisition
Increased expenses in the second quarter due to the acquisition of Advanced AgProtection, with revenue from the acquisition not expected until later in the year.
Company Guidance
During the first quarter of 2025, Palomar Holdings reported robust financial performance, reflecting significant growth across various metrics. The company achieved an 85% increase in adjusted net income and maintained an adjusted combined ratio of 69%. Gross written premiums grew by 20% overall, with a notable 37% increase in same-store premium growth. This growth was driven by both new products and a diversified portfolio of residential and commercial properties. Palomar's strategic initiatives contributed to these results, including the successful integration of First Indemnity of America and the acquisition of Advanced AgProtection, positioning the company for long-term growth in its surety and crop insurance divisions. Additionally, the company raised its full-year adjusted net income guidance to a range of $186 million to $200 million, supported by a strong start to the year and favorable dynamics in their diverse business portfolio.Palomar Holdings Corporate Events
Executive/Board Changes
Palomar Holdings Extends CEO Mac Armstrong’s Term
Positive
Dec 30, 2024
Palomar Holdings, Inc. has entered into an executive employment agreement with its CEO, Mac Armstrong, extending his term through January 2029. The agreement includes a base salary, bonus potential, long-term incentives, and specific benefits if terminated under certain conditions, highlighting the company’s commitment to retaining leadership and potentially stabilizing its market position.
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.