Arch Capital Group Ltd. (NASDAQ:ACGL) is one of the most profitable value stocks to invest in right now. On December 2, Roth Capital lowered the firm’s price target on Arch Capital to $110 from $125 with a Buy rating on the shares. The firm noted that the company’s earnings beat was primarily driven by an unusually low level of catastrophe losses within its reinsurance division. However, written premium growth underperformed expectations across both insurance and reinsurance. Roth Capital believes that thi ...

AM Best has upgraded Arch Capital Group and its subsidiaries’ ratings, citing the firm’s strong operating performance and a proven track record of delivering superior underwriting results and investment returns, even during softer market conditions.Notably, AM Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa” (Superior) from “aa-” (Superior) and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of Arch Reinsurance Ltd. (Arch) (Bermuda) and its strategic affiliates.The ...

Core Insights - Arch Insurance has appointed Ernesto Medina Gomez as the Head of Executive Assurance for Europe, a newly created position aimed at expanding its executive assurance portfolio in Continental Europe, particularly in Iberia [1][2] Group 1: Appointment and Role - Ernesto Medina Gomez will lead the expansion of Arch's executive assurance portfolio across Continental Europe, focusing on Iberia [2] - He is based in Madrid and will collaborate with Julien Martins, the Head of Executive Assurance for France, regarding Benelux and France [2] - Medina Gomez will oversee the underwriting strategy, product development, and distribution of Arch's executive assurance solutions [2] Group 2: Experience and Background - Medina Gomez has extensive experience in underwriting commercial directors & officers and financial institutions business for large European accounts [3] - He previously held senior underwriting roles at Probitas, Zurich, and The Hartford [3] - Most recently, he served as Senior Executive Assurance Underwriter at Arch Insurance International, based in London, after joining the company in 2021 [3] Group 3: Strategic Comments - Matthew Brophy, Chief Underwriting Officer of AIEU dac, emphasized that Medina Gomez's experience and leadership position him well to lead the expansion of the executive assurance portfolio in Continental Europe [4] - Brophy noted that this line of business presents growth opportunities and the potential to deliver significant value to brokers [5] - His market expertise and strong relationships with local European brokers are expected to enhance Arch's footprint in the region and support its strategic ambitions [5]

Core Viewpoint - Arch Capital Group Ltd. (NASDAQ:ACGL) is considered a cheap stock to buy, despite recent adjustments in price targets by analysts due to mixed earnings results and expectations of continued challenges in premium growth [1][2]. Financial Performance - The company reported a 2.05% year-over-year decrease in revenue to $3.96 billion, which was $446 million below expectations [3]. - Earnings per share (EPS) of $2.77 exceeded consensus estimates by $0.52 [3]. - There was a 0.6% decrease in gross premium written and a 2.1% decrease in net premium written during the quarter [3]. Analyst Insights - Harry Fong from Roth MKM lowered the price target from $125 to $110, citing below-expectation written premium growth and anticipating this trend to continue [2]. - Rowland Mayor from RBC Capital initiated coverage with a Buy rating and a price target of $108, noting strong return on equity and book value per share growth, but expecting a slowdown in top-line growth due to a weaker mortgage and reinsurance environment [4]. - Mayor believes that the slowdown will be mitigated by strong underwriting margins and increasing net investment income [4]. Company Overview - Arch Capital Group Ltd., headquartered in Pembroke, Bermuda, offers insurance, reinsurance, and mortgage insurance products and has been focused on sustainable financial growth since its founding in 1995 [5].

Core Thesis - Arch Capital Group Ltd. (ACGL) is viewed as a compelling investment opportunity following a recent sell-off that is perceived as overblown, with the stock trading at $92.69 and a P/E ratio under 9x, significantly below the industry average of approximately 13x [1][2]. Financial Performance - ACGL has demonstrated strong leadership and operational excellence, outperforming peers in key metrics such as combined ratio, earnings growth, return on equity, and premium growth [2]. - The company's business mix is diversified across commercial insurance, reinsurance, and a profitable mortgage insurance segment, providing a resilient earnings base [3]. Market Dynamics - The recent market reaction to ACGL's slightly softer top-line growth and minor expense pressures is considered disproportionate, with revenue softness attributed to prudent underwriting and an evolving client mix [3]. - The property & casualty sector is currently out of favor, creating a favorable entry point for high-quality operators like Arch Capital [4]. Investment Opportunity - The current pullback in ACGL's stock price presents an opportunity for investors to gain exposure to a resilient insurer with strong fundamentals and disciplined management, making it an attractive long-term investment at a significant discount to intrinsic value [5].

Core Viewpoint - Arch Capital Group Ltd. (ACGL) is a significant player in the insurance industry, with a market capitalization of $33.6 billion, providing various insurance and reinsurance products [1]. Financial Performance - ACGL's stock has decreased by 8.8% from its 52-week high of $101.66, reached on November 27, 2024, and has underperformed the Dow Jones Industrials Average, which gained 5.8% over the same period [2]. - Over the past six months, ACGL shares fell by 3.2% and by 6.8% over the past 52 weeks, while the Dow Jones Industrials Average recorded gains of 12.6% and 7.1%, respectively [3]. - In Q3, ACGL reported an adjusted EPS of $2.77, surpassing Wall Street's expectation of $2.19, while its net premiums written were $4 billion, reflecting a 2.1% year-over-year decline [4]. Competitive Position - American International Group, Inc. (AIG) has shown resilience in the insurance sector, with a 2.6% increase over the past 52 weeks, although it has lagged behind ACGL with a 9.9% decline over the last six months [4]. Analyst Sentiment - Wall Street analysts maintain a "Moderate Buy" consensus rating for ACGL, with a mean price target of $106.53, indicating a potential upside of 14.9% from current price levels [5].

Core Insights - Arch Capital Group has shown significant investment growth over the past decade, with a $1,000 investment made in December 2015 now worth $3,863.91, reflecting a gain of 286.39% as of December 1, 2025, which outperforms the S&P 500 and gold returns during the same period [8][9]. Company Overview - Established in 2000 and headquartered in Pembroke, Bermuda, Arch Capital Group Ltd. provides insurance, reinsurance, and mortgage insurance globally, focusing on specialty lines [3]. - The company operates through three underwriting segments: Insurance, Reinsurance, and Mortgage, along with two non-underwriting segments: "Other" and Corporate [4]. Business Segments - The Insurance segment accounts for 42% of 2024 gross premiums written, offering a variety of coverages including primary and excess casualty, professional indemnity, and commercial automobile insurance [5]. - The Reinsurance segment, contributing 51.6%, focuses on third-party liability, workers' compensation, and catastrophic loss reinsurance, marketed through brokers and directly to ceding companies [6]. - The Mortgage segment, making up 6.4%, provides private mortgage insurance and risk-sharing products, sold directly and through brokers to banks and credit unions [7]. Growth Potential - Arch Capital is expected to benefit from premium growth driven by rate increases, new business opportunities, and expansion in existing accounts [10]. - The company has been diversifying its Mortgage Insurance business through acquisitions, enhancing its specialty insurance and reinsurance strengths [10]. - A solid capital position and higher investment yields are anticipated to improve investment income [10]. Market Performance - Despite a year-to-date underperformance compared to the industry, Arch Capital's stock has increased by 8.82% over the past four weeks, with no downward earnings estimates in the last two months and a consensus estimate increase for fiscal 2025 [11].

Core Insights - Arch Insurance International has appointed Beth Jenkins as a Senior Casualty Underwriter to enhance its casualty portfolio [1][2] - Jenkins will focus on developing Arch's UK risk managed retail platform and wholesale EEA business [2] - Jenkins brings experience from Allied World and Munich Re, which will aid in strengthening broker relationships [2][3] Company Developments - The appointment of Jenkins is part of Arch's strategy to expand its casualty offerings [1][2] - Jenkins will report to Marie-Claire Bessada, Head of Retail, General Liability at Arch Insurance International [2] - Bessada emphasized the importance of Jenkins' expertise in enhancing Arch's proposition to brokers and clients [3]

Core Insights - Arch Capital Group Ltd. reported a strong third-quarter 2025 operating income of $2.77 per share, exceeding the Zacks Consensus Estimate by 26.5% and reflecting a year-over-year increase of 39.2% [3][4] - The company's stock has appreciated approximately 10.5% since the last earnings report, outperforming the S&P 500 [1][2] Financial Performance - Gross premiums written decreased by 0.6% year over year to $5.4 billion, while net premiums written fell by 2.1% to $4 billion [4] - Operating revenues rose by 7.8% year over year to $4.7 billion, although this figure missed the Zacks Consensus Estimate by 0.6% [5] - Pre-tax net investment income increased by 2.3% year over year to $408 million, slightly below estimates [4] - Underwriting income surged by 61.9% year over year to $871 million, with the combined ratio improving by 680 basis points to 79.8 [6] Segment Analysis - **Insurance Segment**: Gross premiums written increased by 9.7% year over year to $2.6 billion, with net premiums written climbing 7.3% to $2 billion [7] - **Reinsurance Segment**: Gross premiums written declined by 9% year over year to $2.5 billion, while net premiums written fell by 10.7% to $1.7 billion, despite a significant increase in underwriting income by 223.5% to $482 million [8] - **Mortgage Segment**: Gross premiums written dipped by 2.7% year over year to $330 million, with net premiums written decreasing by 2.8% to $274 million [9] Financial Health - As of September 30, 2025, Arch Capital had cash reserves of $1.1 billion, an increase of 8.6% from the end of 2024, and maintained a debt level of $2.7 billion [10] - The book value per share rose by 17.3% to $62.32, and the annualized operating return on average common equity expanded by 70 basis points to 18.5% [10][11] Market Outlook - Estimates for Arch Capital have been trending upward, indicating a positive outlook, with a Zacks Rank of 2 (Buy) suggesting an expectation of above-average returns in the coming months [12][14] - The stock has an aggregate VGM Score of A, indicating strong performance across various investment strategies [13] Industry Comparison - Arch Capital operates within the Zacks Insurance - Property and Casualty industry, where peer W.R. Berkley has seen a 7.3% gain over the past month, reporting revenues of $3.69 billion, a year-over-year increase of 8.2% [15]

Core Viewpoint - Arch Capital Group Ltd. (ACGL) is experiencing a short-term bullish trend, trading above its 50-day simple moving average, despite a recent decline in share price from its 52-week high [2] Price Performance - Arch Capital shares have decreased by 7.8% over the past year, while the industry has grown by 4.1% [3] - Compared to peers, Arch Capital has outperformed Skyward Specialty Insurance Group, Inc. (SKWD) and Kinsale Capital Group, Inc. (KNSL), which have seen declines of 13% and 25.7%, respectively [3] Premium Growth - The company is experiencing premium growth supported by rate increases, new business, and expansion in existing accounts [6] - Arch Capital has achieved a 12.9% compound annual growth rate (CAGR) in net premiums written from 2018 to 2024, driven by firm market rates [6] Analyst Price Target - The average price target for Arch Capital, based on 18 analysts, is $106.67 per share, indicating a potential upside of 17% from the last closing price [7] Return on Capital - Arch Capital's trailing 12-month return on equity stands at 16.3%, significantly higher than the industry average of 8% [9] Growth Projections - The Zacks Consensus Estimate for Arch Capital's 2025 revenues is $18.72 billion, reflecting a year-over-year improvement of 12.6% [10] - Earnings have grown by 33.5% over the past five years, outperforming the industry average of 20.9% [10] Earnings Surprise History - Arch Capital has consistently surpassed earnings estimates in the last four quarters, with an average surprise of 18.19% [11] Analyst Sentiment - Recent adjustments show that six of the seven analysts covering the stock have lowered estimates for 2025, while six of the eight analysts have raised estimates for 2026 [12] Key Strengths - Arch Capital's diverse product portfolio and consistent premium growth highlight its strong organic growth drivers [14] - The company benefits from favorable dynamics in the property and casualty (P&C) market, with a hardening environment supporting higher premiums and demand for coverage [16] Overall Position - Arch Capital is well-positioned for sustained growth due to its strong competitive position, robust capital position, and favorable return on capital [17][18]