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Here's Why Investors Should Retain Everest Group (EG) Stock
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Everest Group, Ltd. (EG - Free Report) is well-poised to gain on the back of product diversification, higher income from the fixed income portfolio, favorable estimates, strong renewal retention, prudent capital deployment and a solid capital position.
Growth Projections
The Zacks Consensus Estimate for Everest Group’s 2024 revenues is pegged at $17.70 billion, implying a year-over-year improvement of 21.1%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 12.5% and 11.7%, respectively, from the corresponding 2024 estimates.
Earnings have grown 40.4% in the past five years, better than the industry average of 9%.
Earnings Surprise History
EG surpassed earnings estimates in each of the last four quarters, the average being 37.54%.
Zacks Rank & Price Performance
Everest Group currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 11.4% compared with the industry’s growth of 25.2%.
Image Source: Zacks Investment Research
Return on Equity
Everest Group’s annualized after-tax operating income return on equity was 20% in the first quarter, which expanded 280 basis points (bps) year over year. Its return on equity for the trailing 12 months is 24.9%, which expanded 1,190 bps year over year. This reflects its efficiency in utilizing its shareholders’ funds.
Style Score
The insurer has a VGM Score of A. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Global presence, product diversification, rate increase and high retention rate continue to drive EG’s overall growth. The Insurance segment is poised to benefit from an increase in property and short tail business and a rise in specialty casualty business. On the other hand, leveraging opportunities stemming from the continued disruption and evolution of the reinsurance market should poise the Reinsurance segment for growth.
Net investment income stands to benefit from higher income from the fixed income portfolio, increase in limited partnership income, rise in dividend income from the equity portfolio and higher income from other invested assets. An improved interest rate environment adds to the upside.
Everest Group has a strong capital position, banking on sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
The company boasts a consistent increase in dividends, with the metric witnessing an eight-year (2016-2023) CAGR of 34.9%. The insurer targets a total shareholder return on equity of more than 17% from 2024 to 2026, reflecting robust and well-diversified earnings power. EG boasts consistent and industry-leading shareholder returns.
Everest Group has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
However, the insurer has been experiencing an increase in expenses due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees and other underwriting expenses. The company should continue to generate revenues at a higher magnitude than expenses.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Hamilton Insurance Group, Ltd. (HG - Free Report) , MGIC Investment Corporation (MTG - Free Report) and EverQuote, Inc. (EVER - Free Report) . While Hamilton Insurance sports a Zacks Rank #1 (Strong Buy), MGIC Investment and EverQuote carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hamilton Insurance’s 2024 and 2025 earnings implies year-over-year growth of 60.6% and 13.2%, respectively. In the past year, shares of HG have gained 16.7%.
The Zacks Consensus Estimate for HG’s 2024 and 2025 revenues implies year-over-year growth of 45% and 11%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 65.16%. In the past year, shares of EVER have skyrocketed 256.9%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103% and 270%, respectively.
MGIC Investment has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 15.45%. In the past year, shares of MTG have jumped 42.8%.
The Zacks Consensus Estimate for MTG’s 2024 and 2025 revenues implies year-over-year growth of 4.6% and 4.8%, respectively.
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Here's Why Investors Should Retain Everest Group (EG) Stock
Everest Group, Ltd. (EG - Free Report) is well-poised to gain on the back of product diversification, higher income from the fixed income portfolio, favorable estimates, strong renewal retention, prudent capital deployment and a solid capital position.
Growth Projections
The Zacks Consensus Estimate for Everest Group’s 2024 revenues is pegged at $17.70 billion, implying a year-over-year improvement of 21.1%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 12.5% and 11.7%, respectively, from the corresponding 2024 estimates.
Earnings have grown 40.4% in the past five years, better than the industry average of 9%.
Earnings Surprise History
EG surpassed earnings estimates in each of the last four quarters, the average being 37.54%.
Zacks Rank & Price Performance
Everest Group currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 11.4% compared with the industry’s growth of 25.2%.
Image Source: Zacks Investment Research
Return on Equity
Everest Group’s annualized after-tax operating income return on equity was 20% in the first quarter, which expanded 280 basis points (bps) year over year. Its return on equity for the trailing 12 months is 24.9%, which expanded 1,190 bps year over year. This reflects its efficiency in utilizing its shareholders’ funds.
Style Score
The insurer has a VGM Score of A. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Global presence, product diversification, rate increase and high retention rate continue to drive EG’s overall growth. The Insurance segment is poised to benefit from an increase in property and short tail business and a rise in specialty casualty business. On the other hand, leveraging opportunities stemming from the continued disruption and evolution of the reinsurance market should poise the Reinsurance segment for growth.
Net investment income stands to benefit from higher income from the fixed income portfolio, increase in limited partnership income, rise in dividend income from the equity portfolio and higher income from other invested assets. An improved interest rate environment adds to the upside.
Everest Group has a strong capital position, banking on sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
The company boasts a consistent increase in dividends, with the metric witnessing an eight-year (2016-2023) CAGR of 34.9%. The insurer targets a total shareholder return on equity of more than 17% from 2024 to 2026, reflecting robust and well-diversified earnings power. EG boasts consistent and industry-leading shareholder returns.
Everest Group has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
However, the insurer has been experiencing an increase in expenses due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees and other underwriting expenses. The company should continue to generate revenues at a higher magnitude than expenses.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Hamilton Insurance Group, Ltd. (HG - Free Report) , MGIC Investment Corporation (MTG - Free Report) and EverQuote, Inc. (EVER - Free Report) . While Hamilton Insurance sports a Zacks Rank #1 (Strong Buy), MGIC Investment and EverQuote carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hamilton Insurance’s 2024 and 2025 earnings implies year-over-year growth of 60.6% and 13.2%, respectively. In the past year, shares of HG have gained 16.7%.
The Zacks Consensus Estimate for HG’s 2024 and 2025 revenues implies year-over-year growth of 45% and 11%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 65.16%. In the past year, shares of EVER have skyrocketed 256.9%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103% and 270%, respectively.
MGIC Investment has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 15.45%. In the past year, shares of MTG have jumped 42.8%.
The Zacks Consensus Estimate for MTG’s 2024 and 2025 revenues implies year-over-year growth of 4.6% and 4.8%, respectively.