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Why Is Palomar (PLMR) Up 3.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Palomar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Palomar Q4 Earnings Top Estimates on Solid Underwriting
Palomar Holdings, Inc. reported fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year.
Palomar witnessed improved premiums and net investment income, partly offset by higher losses and loss adjustment expenses and other underwriting expenses.
Behind the Headlines
Total revenues improved 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million. Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments.
Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million. Adjusted underwriting income was $23.5 million, 18.1% higher than the year-ago amount of $19.9 million. Total expenses of $63.6 million increased 24.4% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. The loss ratio was 22.4, up 740 basis points (bps) year over year.
Adjusted combined ratio, excluding catastrophe losses, improved 400 bps year over year to 69.2.
Full-Year Highlights
Total operating revenues for 2022 were $334.6 million, compared with $246.5 million at 2021-end. Adjusted earnings for 2022 were $2.77 per share compared with $2.01 per share at 2021-end.
Net premiums earned of $316.5 million rose 35.3% from 2021-end figures. The adjusted combined ratio excluding catastrophe losses improved 310 bps to 70.8, down 50 bps from 2021-end.
Financial Update
Cash and cash equivalents increased 35.4% from the 2021-end to $68.1 million at 2022-end. Shareholder equity decreased 2.4% from 2021-end to $384.7 million.
Annualized adjusted return on equity in 2022 was 18.3%, expanding 450 bps year over year. PLMR bought back shares worth $11.1 million in the fourth quarter of 2022. As of Dec 31, 2022, $65.6 million remains under authorization.
2023 Outlook
Palomar aims to achieve adjusted net income in the range of $86 million to $90 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.18% due to these changes.
VGM Scores
At this time, Palomar has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Palomar has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Palomar (PLMR) Up 3.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Palomar (PLMR - Free Report) . Shares have added about 3.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Palomar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Palomar Q4 Earnings Top Estimates on Solid Underwriting
Palomar Holdings, Inc. reported fourth-quarter 2022 operating income of 82 cents per share, beating the Zacks Consensus Estimate by 5.13%. The bottom line increased 20.6% year over year.
Palomar witnessed improved premiums and net investment income, partly offset by higher losses and loss adjustment expenses and other underwriting expenses.
Behind the Headlines
Total revenues improved 23.4% year over year to $87.8 million, mainly attributable to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 3%.
Gross written premiums increased 60% year over year to $239.1 million. Net earned premiums increased 21.2% year over year to $82.2 million. Net investment income increased 81.6% year over year to $4.4 million, driven by higher returns on invested assets and a higher average balance of investments.
Palomar witnessed an underwriting income of $20.1 million, 18.5% higher than the year-ago income of $17 million. Adjusted underwriting income was $23.5 million, 18.1% higher than the year-ago amount of $19.9 million. Total expenses of $63.6 million increased 24.4% year over year due to higher losses and loss adjustment expenses, underwriting expenses and interest expenses. The loss ratio was 22.4, up 740 basis points (bps) year over year.
Adjusted combined ratio, excluding catastrophe losses, improved 400 bps year over year to 69.2.
Full-Year Highlights
Total operating revenues for 2022 were $334.6 million, compared with $246.5 million at 2021-end. Adjusted earnings for 2022 were $2.77 per share compared with $2.01 per share at 2021-end.
Net premiums earned of $316.5 million rose 35.3% from 2021-end figures. The adjusted combined ratio excluding catastrophe losses improved 310 bps to 70.8, down 50 bps from 2021-end.
Financial Update
Cash and cash equivalents increased 35.4% from the 2021-end to $68.1 million at 2022-end. Shareholder equity decreased 2.4% from 2021-end to $384.7 million.
Annualized adjusted return on equity in 2022 was 18.3%, expanding 450 bps year over year. PLMR bought back shares worth $11.1 million in the fourth quarter of 2022. As of Dec 31, 2022, $65.6 million remains under authorization.
2023 Outlook
Palomar aims to achieve adjusted net income in the range of $86 million to $90 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -5.18% due to these changes.
VGM Scores
At this time, Palomar has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Palomar has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.