Property and casualty insurance provider The Allstate Corporation (ALL Quick QuoteALL - Free Report) is set to report its fourth-quarter 2024 results on Feb. 5, 2025, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $6.20 per shareon revenues of $16.71 billion. 

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The fourth-quarter earnings estimate has witnessed five upward revisions over the past 30 days against one movement in the opposite direction. The bottom-line projection indicates year-over-year growth of 6.5%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 12.1%.

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For 2024, the Zacks Consensus Estimate for Allstate’s revenues is pegged at $64.32 billion, implying a rise of 12.1% year over year. Also, the consensus mark for 2024 EPS is pegged at $16.83, implying a jump from 95 cents a year ago.

Allstate has a robust history of surpassing earnings estimates, beating the consensus estimate in each of the last four quarters, with the average surprise being 135.2%. This is depicted in the figure below.

Q4 Earnings Whispers for Allstate

Our proven model predicts a likely earnings beat for the company this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s precisely the case here.

ALL has an Earnings ESP of +4.69% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping Allstate’s Q4 Results?

Allstate’s revenues are likely to have benefited from improved net premiums earned from most of its lines of business, attributable to rate increases. The Zacks Consensus Estimate and our model estimate for net premiums earned indicate 12.1% and 10.5% year-over-year growth, respectively. 

Net investment income is expected to have received an impetus from increased market-based income. The Zacks Consensus Estimate for net investment income indicates 24.8% year-over-year growth from $604 million.

The Zacks Consensus Estimate for adjusted net income from the Protection Services business is pegged at $49.2 million, up from the year-ago period’s $4 million. The consensus mark for Homeowners policies in force indicates a 2.5% year-over-year increase.

The consensus mark for underwriting income from the Auto brand is pegged at $658.3 million compared with $93 million a year ago. The Auto insurance business is expected to have been aided by expanding earned premiums and lower expenses in the fourth quarter. The combined ratio in this line of business is pegged at 93.23%, improving from 98.20% in the year-ago quarter. This means a larger portion of premiums remained in the company’s kitty following claim payments. The consensus estimate for underwriting loss from Commercial Lines is pegged at $19.6 million, down from $84 million a year ago.

The factors mentioned above are expected to have contributed to the company's year-over-year growth, positioning it for an earnings beat. However, the consensus mark for adjusted net income from theAllstate Health and Benefits unit indicates a 17.6% year-over-year decrease. Ourmodel estimate for total costs and expenses indicates more than a 13% year-over-year increase due to higher operating costs and claims expenses, partially offsetting the positives.

Allstate’s Price Performance & Valuation

Allstate's stock has gained 22.9% in the past year, outperforming the industry’s growth of 20.9%. Some of its peers, like The Hartford Financial Services Group, Inc. (HIG Quick QuoteHIG - Free Report) and American International Group, Inc. (AIG Quick QuoteAIG - Free Report) , have gained 30.5% and 8.5%, respectively, during this time. Meanwhile, the S&P 500 Index has rallied 26.6% during the same period.

Price Performance – ALL, HIG, AIG, Industry & S&P 500

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Now, let’s look at the value Allstate offers investors at current levels.

Despite the price appreciation, the company’s valuation looks cheaper compared with the industry average. Currently, ALL is trading at 10.08X forward 12-months earnings, below its five-year median of 10.97X and the industry’s average of 28.05X.

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Allstate’s Investment Case: Hold For Now

Allstate is poised for steady revenue growth, supported by its diversified product portfolio, strategic acquisitions and disciplined pricing. Key initiatives — including rate hikes, product enhancements, and a shift toward high-return segments — position the company for long-term success. Its focus on expanding the Protection Services business through targeted acquisitions further strengthens its performance. Additionally, Allstate continues to enhance operational efficiency, improve underwriting gains and reinvest savings into technology and product management. As a result, existing investors may benefit from staying the course.

However, new investors should not rush to buy now. High debt levels remain a concern while rising repair costs could drive up claims expenses and squeeze margins. Though rate increases aim to protect profitability, they may also reduce the number of active policies. Additionally, growing competition in the insurance sector challenges pricing strategies, and increased natural disasters could further pressure earnings. Allstate, with a strong presence in California, is among the insurers most exposed to wildfire-related losses. Still, analysts expect the financial impact to be manageable.

While Allstate appears undervalued with strong long-term potential, investors should wait for its upcoming earnings report before making decisions, as it will provide key insights into wildfire-related losses and future growth prospects.