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Kinsale Capital Group, Inc. (KNSL) Surges 4.9%: Is This an Indication of Further Gains?

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Kinsale Capital Group, Inc. (KNSL - Free Report) shares ended the last trading session 4.9% higher at $228.21. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.5% gain over the past four weeks.

Kinsale Capital continues to benefit from dislocation within the broader property/casualty insurance industry, rate increases and premium growth. Continued focus on the E&S Market bodes well for the insurer.  KNSL expects the E&S market to grow at a double-digit premium growth rate beginning 2022.

Revenue growth comes on the back of growing net premiums. Strong established presence across the E&S market of the United States and high retention rates arising from contract renewals benefit top line.

Kinsale Capital has developed a proprietary technology platform, which is likely to provide it a competitive edge over its competitors. Use of technology has also aided in lowering its expense ratio in the past few years. The metric continues to benefit from economies of scale from premium expansion and management's continued focus on controlling costs. Kinsale Capital believes an expense ratio in the low-to-mid 20s to be rational.

This company is expected to post quarterly earnings of $1.66 per share in its upcoming report, which represents a year-over-year change of +29.7%. Revenues are expected to be $195.57 million, up 27.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Kinsale Capital Group, Inc., the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on KNSL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Kinsale Capital Group, Inc. belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Mercury General (MCY - Free Report) , closed the last trading session 0.3% higher at $44.12. Over the past month, MCY has returned -10%.

For Mercury General, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.33. This represents a change of -129.2% from what the company reported a year ago. Mercury General currently has a Zacks Rank of #5 (Strong Sell).


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