You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kinsale Capital Stock Rallies 38.7% YTD: More Room for Upside?
Read MoreHide Full Article
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have rallied 38.7% year to date (YTD), outperforming the industry’s 26% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 17.8% and 13.2%, respectively, YTD. With a market capitalization of $10.81 billion, the average volume of shares traded in the last three months was 0.1 million.
KNSL Outperforms Industry, Sector & S&P YTD
Image Source: Zacks Investment Research
The rally was largely driven by a focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio, solid growth projections and effective capital deployment.
This property and casualty insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 9.28%.
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
KNSL Trading Above 50-Day Moving Average
This Zacks Rank #3 (Hold) insurance broker closed at $464.53 on Friday, above its 50-day and 200-day simple moving average (SMA) of $442.60 and $421, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Optimistic Analyst Sentiment for KNSL
Each of the seven analysts covering the stock has raised estimates for 2024, while five analysts have raised the same for 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2024 and 2025 moved 2.2% and 1.4% north, respectively, in the last 60 days, reflecting analyst optimism.
Growth Projection for KNSL
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings per share indicates an increase of 22.4% from the year-ago reported number. The consensus estimate for revenues is pegged at $1.58 billion, implying a year-over-year improvement of 29.7%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 18.6% and 19%, respectively, from the corresponding 2024 estimates.
Earnings have grown 45.7% in the past five years, better than the industry average of 10.5%. The expected long-term earnings growth rate is 15%, outperforming the industry average of 11.1%.
Will the Bull Run Continue?
Premiums should continue to improve, given the company’s strong presence across the E&S market in the United States and high retention rates stemming from contract renewals. Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term. Also, KNSL is well-poised to generate an improved expense ratio given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business.
Investment of excess operating funds at higher rates in an improved rate environment should drive investment results. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
The insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%, riding on the strength of operational excellence that supports a solid capital position.
KNSL’s Favorable Return on Capital
Return on equity in the trailing 12 months was 30.3%, better than the industry average of 7.9%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting ACGL’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 25.4%, better than the industry average of 6%.
KNSL’s Expensive Valuation
KNSL is currently expensive. It is trading at a P/B multiple of 8.60, higher than the industry average of 1.58.
Shares of other insurers like Arch Capital Group Ltd. (ACGL - Free Report) and NMI Holdings Inc (NMIH - Free Report) are also trading at a multiple higher than the industry average.
However, shares of CNA Financial Corporation (CNA - Free Report) are trading at a multiple lower than the industry average.
In-Depth Zacks Research for the Tickers Above
Normally $25 each - click below to receive one report FREE:
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have rallied 38.7% year to date (YTD), outperforming the industry’s 26% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 17.8% and 13.2%, respectively, YTD. With a market capitalization of $10.81 billion, the average volume of shares traded in the last three months was 0.1 million.
KNSL Outperforms Industry, Sector & S&P YTD
Image Source: Zacks Investment Research
The rally was largely driven by a focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio, solid growth projections and effective capital deployment.
This property and casualty insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 9.28%.
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
KNSL Trading Above 50-Day Moving Average
This Zacks Rank #3 (Hold) insurance broker closed at $464.53 on Friday, above its 50-day and 200-day simple moving average (SMA) of $442.60 and $421, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Optimistic Analyst Sentiment for KNSL
Each of the seven analysts covering the stock has raised estimates for 2024, while five analysts have raised the same for 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2024 and 2025 moved 2.2% and 1.4% north, respectively, in the last 60 days, reflecting analyst optimism.
Growth Projection for KNSL
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings per share indicates an increase of 22.4% from the year-ago reported number. The consensus estimate for revenues is pegged at $1.58 billion, implying a year-over-year improvement of 29.7%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 18.6% and 19%, respectively, from the corresponding 2024 estimates.
Earnings have grown 45.7% in the past five years, better than the industry average of 10.5%. The expected long-term earnings growth rate is 15%, outperforming the industry average of 11.1%.
Will the Bull Run Continue?
Premiums should continue to improve, given the company’s strong presence across the E&S market in the United States and high retention rates stemming from contract renewals. Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. It remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Management estimates low double-digit rate increases across the book of business.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. It targets a combined ratio in the mid-80s range over the long term. Also, KNSL is well-poised to generate an improved expense ratio given its proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business.
Investment of excess operating funds at higher rates in an improved rate environment should drive investment results. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
The insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%, riding on the strength of operational excellence that supports a solid capital position.
KNSL’s Favorable Return on Capital
Return on equity in the trailing 12 months was 30.3%, better than the industry average of 7.9%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting ACGL’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 25.4%, better than the industry average of 6%.
KNSL’s Expensive Valuation
KNSL is currently expensive. It is trading at a P/B multiple of 8.60, higher than the industry average of 1.58.
Shares of other insurers like Arch Capital Group Ltd. (ACGL - Free Report) and NMI Holdings Inc (NMIH - Free Report) are also trading at a multiple higher than the industry average.
However, shares of CNA Financial Corporation (CNA - Free Report) are trading at a multiple lower than the industry average.