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Kinsale Capital (KNSL) Rises 40.4% YTD: What's Driving It?
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Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 40.4% year to date (YTD), outperforming the industry's growth of 19.7%. The Finance sector and the Zacks S&P 500 composite have risen 7.2% and 12.3%, respectively, in the same period. With a market capitalization of $10.94 billion, the average volume of shares traded in the last three months was 0.2 million.
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 Zacks Rank #3 (Hold) 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.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings per share indicates an increase of 22.3% from the year-ago reported number. The consensus estimate for revenues is pegged at $1.58 billion, implying a year-over-year improvement of 29.5%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 18.5% and 18.6%, 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%. It has a Growth Score of B. This style score analyzes the growth prospects of a company.
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 CAGR (2017-2024) of 12%, riding on the strength of operational excellence that supports a solid capital position.
KNSL’s trailing 12-month return on equity (ROE) reinforces its growth potential. Its trailing 12-month ROE of 30.3% remained above the industry’s ROE of 7.9% and expanded 120 bps year over year, reflecting its tactical efficiency in using its shareholders’ funds. For the long term, it even targets to maintain operating return on equity in the mid-teens range. Also, the trailing 12-month return on invested capital of 25.4% was better than the industry average of 6%, reflecting KNSL’s efficiency in utilizing funds to generate income.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 2.1% and 1.2% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
NMI Holdings’ earnings surpassed estimates in each of the last four quarters, the average surprise being 10.15%. Shares of NMIH have jumped 26% YTD. The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 15.6% and 5.5%, respectively.
Root’s earnings surpassed estimates in each of the last four quarters, the average surprise being 47.87%. Shares of ROOT have skyrocketed 339.1% YTD. The Zacks Consensus Estimate for ROOT’s 2024 and 2025 earnings implies year-over-year growth of 60.6% and 37.5%, respectively.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 28.93%. Shares of ACGL have jumped 31.4% YTD. The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings implies year-over-year growth of 5.6% and 2.9%, respectively.
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Kinsale Capital (KNSL) Rises 40.4% YTD: What's Driving It?
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 40.4% year to date (YTD), outperforming the industry's growth of 19.7%. The Finance sector and the Zacks S&P 500 composite have risen 7.2% and 12.3%, respectively, in the same period. With a market capitalization of $10.94 billion, the average volume of shares traded in the last three months was 0.2 million.
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 Zacks Rank #3 (Hold) 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.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings per share indicates an increase of 22.3% from the year-ago reported number. The consensus estimate for revenues is pegged at $1.58 billion, implying a year-over-year improvement of 29.5%.
The consensus estimate for 2025 earnings per share and revenues indicates an increase of 18.5% and 18.6%, 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%. It has a Growth Score of B. This style score analyzes the growth prospects of a company.
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 CAGR (2017-2024) of 12%, riding on the strength of operational excellence that supports a solid capital position.
KNSL’s trailing 12-month return on equity (ROE) reinforces its growth potential. Its trailing 12-month ROE of 30.3% remained above the industry’s ROE of 7.9% and expanded 120 bps year over year, reflecting its tactical efficiency in using its shareholders’ funds. For the long term, it even targets to maintain operating return on equity in the mid-teens range. Also, the trailing 12-month return on invested capital of 25.4% was better than the industry average of 6%, reflecting KNSL’s efficiency in utilizing funds to generate income.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 2.1% and 1.2% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are NMI Holdings Inc (NMIH - Free Report) , Root, Inc. (ROOT - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NMI Holdings’ earnings surpassed estimates in each of the last four quarters, the average surprise being 10.15%. Shares of NMIH have jumped 26% YTD. The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 15.6% and 5.5%, respectively.
Root’s earnings surpassed estimates in each of the last four quarters, the average surprise being 47.87%. Shares of ROOT have skyrocketed 339.1% YTD. The Zacks Consensus Estimate for ROOT’s 2024 and 2025 earnings implies year-over-year growth of 60.6% and 37.5%, respectively.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 28.93%. Shares of ACGL have jumped 31.4% YTD. The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings implies year-over-year growth of 5.6% and 2.9%, respectively.