Wall Street expects a year-over-year decline in earnings on higher revenues when Everest Group (EG) reports results for the quarter ended June 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on July 30, might help the stock move higher if these key numbers are better than expectations. ...

Core Insights - Quantexa has been recognized as a Luminary in Everest Group's Innovation Watch report for its innovative use of generative AI in financial crime and compliance [1][3][5] - The company's Q Assist, a context-aware Agentic AI capability, enhances decision-making by providing instant access to connected insights and revealing hidden relationships in complex datasets [2][5][6] Company Developments - Q Assist has transitioned from pilot to production since its launch in 2024, demonstrating measurable impact in areas such as third-party investigations and real-time risk assessments [2][5] - Quantexa recently completed a $175 million Series F funding round, valuing the company at $2.6 billion, which will support its global growth and platform innovation [5] Industry Position - Quantexa's leadership in leveraging advanced AI technologies addresses the increasing complexity of financial crime compliance, with generative AI promising to automate labor-intensive tasks and detect anomalies in near real-time [3][4] - The Everest Group report indicates that 75% of providers are forming robust partnerships, with Quantexa leading through collaborations with major firms like Microsoft and Google [4] Performance Metrics - Quantexa's Decision Intelligence Platform offers over 90% more accuracy and 60 times faster analytical model resolution compared to traditional methods [8] - An independent Forrester TEI study reported that customers experienced a three-year ROI of 228% from using Quantexa's platform [8]

Group 1: Insider Transactions - Insider buys are closely monitored by investors as they provide insights into the long-term outlook of companies [1][6] - In 2025, CEOs of GameStop, MicroStrategy, and Everest Group have made significant share purchases [6] - Strict rules govern insider transactions, and insiders typically have longer holding periods than average investors [1][12] Group 2: GameStop - GameStop's CEO Ryan Cohen purchased 500,000 shares for approximately $10.7 million, despite the stock being down nearly 20% year-to-date [2] - Analysts have revised GameStop's EPS estimates upward, with the current Zacks Consensus EPS estimate at $0.75, a significant increase from $0.02 per share in June of the previous year [3] Group 3: MicroStrategy - MicroStrategy shares have risen nearly 34% in 2025, outperforming the S&P 500, largely due to the surge in bitcoin [5] - CEO Phong Le acquired 6,000 shares at a total value of around $510,000 [5] - The high volatility of MicroStrategy shares is influenced by fluctuations in bitcoin prices [8] Group 4: Everest Group - Everest Group, which provides reinsurance and insurance products, saw its CEO James Williamson purchase 1,000 shares for about $340,000 [9] - The company has demonstrated consistent sales growth over recent years [11]

Core Viewpoint - Everest Group, Ltd. (EG) shares are undervalued compared to the industry average, with a forward price to earnings ratio of 6.44X versus the industry average of 8.92X, indicating potential investment opportunity [1] Financial Performance - Everest Group has a market capitalization of $14.53 billion and an average trading volume of 0.4 million shares over the last three months [2] - The Zacks Consensus Estimate for Everest Group's 2025 earnings per share shows a year-over-year increase of 52.2%, with revenues projected at $17.58 billion, reflecting a 1.7% improvement [3] - Earnings have grown 21.4% over the past five years, surpassing the industry average of 10.1%, with a long-term earnings growth rate expected at 28.2% compared to the industry average of 12.8% [4] Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings has decreased by 0.6% in the past 30 days, while the estimate for 2026 has increased by 0.3% [5] Stock Performance - Shares of Everest Group have declined by 10.5% over the past year, underperforming the industry, Finance sector, and Zacks S&P 500 composite, which grew by 9.1%, 18.1%, and 8.8% respectively [6] Growth Drivers - Key growth drivers for Everest Group include global presence, product diversification, rate increases, and high retention rates, particularly in the Insurance segment [11] - The Reinsurance segment is expected to benefit from ongoing disruptions and evolution in the reinsurance market [11] - Net investment income is anticipated to improve due to higher income from fixed income portfolios and an improved interest rate environment [12] Capital Management - Everest Group maintains a strong capital position with a target long-term debt leverage ratio of 15-20% over three years, reflecting robust earnings capacity [8][13] - The company plans to continue share repurchases through 2025 and has approved a 14.3% increase in its quarterly dividend [14][16] Valuation and Target Price - The average price target from 12 analysts for Everest Group is $391.75 per share, indicating a potential upside of 16.1% from the last closing price [9] Conclusion - The combination of higher income from investments, product diversification, strong renewal retention, and prudent capital deployment positions Everest Group as a strong investment candidate [17]

Group 1 - Everest Group's shares have declined by 12% over the past year, indicating poor performance [1] - The company has faced challenges including disappointing underwriting results, management upheaval, and difficulties stemming from California wildfires [1] Group 2 - The article reflects a contrarian investment approach based on macro views and stock-specific turnaround stories [1]

Core Viewpoint - Everest Group, Ltd. (EG) shares are currently trading at a discount compared to the Zacks Multi-line Insurance industry, with a forward price-to-book value of 1.02X, significantly lower than the industry average of 2.46X, the Finance sector's 4.3X, and the Zacks S&P 500 Composite's 7.98X [1] Group 1: Financial Performance - Everest Group has a market capitalization of $14.48 billion, with an average trading volume of 0.4 million shares over the last three months [3] - The Zacks Consensus Estimate for Everest Group's 2025 earnings per share indicates a year-over-year increase of 53.9%, with revenues projected at $17.70 billion, reflecting a 2.4% year-over-year improvement [4] - Earnings have grown 21.4% over the past five years, outperforming the industry average of 10.3%, with a long-term earnings growth rate expected at 28.2%, compared to the industry average of 12.5% [5] Group 2: Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings has decreased by 3% in the past 30 days, while the estimate for 2026 has decreased by 1% during the same period [6] - Shares of Everest Group have lost 12.1% in the past year, underperforming the industry, Finance sector, and Zacks S&P 500 composite, which grew by 4.8%, 17.9%, and 10.9%, respectively [7][8] Group 3: Growth Drivers - Factors driving Everest Group's growth include global presence, product diversification, rate increases, and a high retention rate [11] - The Insurance segment is expected to benefit from an increase in property and short-tail business, as well as a rise in specialty casualty business [11] - Net investment income is anticipated to improve due to higher income from the fixed income portfolio, increased limited partnership income, and a favorable interest rate environment [12] Group 4: Capital Management - Everest Group maintains a strong capital position, with sufficient cash generation capabilities and a target long-term debt leverage ratio of 15-20% over the next three years [13] - The board approved a 14.3% increase in its quarterly dividend in May 2024, with a target total shareholder return on equity of over 17% from 2024 to 2026 [14] - The company plans to continue share repurchases throughout 2025, reflecting robust earnings power and disciplined capital management [14] Group 5: Investment Outlook - Higher income from the fixed income portfolio, product diversification, strong renewal retention, and a solid capital position make Everest Group a strong candidate for investment [15] - The stock has a VGM Score of B, indicating attractive value, growth, and momentum [15]

PART I FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025, highlighting a significant decrease in net income and growth in total assets and shareholders' equity [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for Q1 2025 show a significant decline in net income and diluted EPS, driven by increased losses, despite growth in total assets and shareholders' equity Consolidated Balance Sheet Data | Financial Metric | March 31, 2025 (in million USD) | December 31, 2024 (in million USD) | | :--- | :--- | :--- | | Total Assets | $58,132 million | $56,341 million | | Total Liabilities | $43,993 million | $42,466 million | | Total Shareholders' Equity | $14,140 million | $13,875 million | Consolidated Statements of Operations Data | Income Statement Item | Q1 2025 (in million USD) | Q1 2024 (in million USD) | | :--- | :--- | :--- | | Premiums Earned | $3,852 million | $3,652 million | | Total Revenues | $4,263 million | $4,133 million | | Incurred Losses and LAE | $2,893 million | $2,237 million | | Net Income | $210 million | $733 million | | Diluted EPS | $4.90 (in USD) | $16.87 (in USD) | - Net cash provided by operating activities decreased to **$928 million** in Q1 2025 from **$1.1 billion** in Q1 2024[14](index=14&type=chunk) - The company declared dividends of **$2.00 per share** in Q1 2025, up from **$1.75 per share** in Q1 2024 It also purchased **$200 million** of treasury shares in Q1 2025, compared to **$35 million** in the prior-year period[12](index=12&type=chunk) [Notes to Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Interim%20Financial%20Statements) These notes provide detailed disclosures on the investment portfolio, loss reserves, segment performance, and the impact of the new Bermuda corporate income tax - The fair value of fixed maturity securities available for sale increased to **$31.8 billion** as of March 31, 2025, from **$28.9 billion** at year-end 2024[27](index=27&type=chunk) - Net investment income for Q1 2025 was **$491 million**, an increase from **$457 million** in Q1 2024, primarily driven by higher income from fixed maturities[39](index=39&type=chunk) - Gross reserves for losses and LAE grew to **$31.5 billion** at the end of Q1 2025 from **$29.9 billion** at year-end 2024 The increase was attributed to earned premium growth and **$449 million** more in current year catastrophe losses compared to Q1 2024[69](index=69&type=chunk) - The Bermuda government enacted a **15%** corporate income tax effective January 1, 2025 However, recent OECD guidance may restrict the utilization of certain deferred tax benefits, creating uncertainty about the impact on the Company's deferred tax assets[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q1 2025 financial performance, attributing the decline in net income to increased catastrophe and attritional losses, despite a strong financial condition and capital returns [Financial Summary](index=47&type=section&id=Financial%20Summary) The Q1 2025 financial summary highlights a sharp decline in net income and a deteriorated combined ratio due to higher losses, despite a slight increase in shareholders' equity Key Financial Metrics | Metric | Q1 2025 (in million USD) | Q1 2024 (in million USD) | % Change | | :--- | :--- | :--- | :--- | | Gross Written Premiums | $4,391 M | $4,411 M | (0.5)% | | Net Income | $210 M | $733 M | (71.4)% | | Combined Ratio | 102.7% | 88.8% | +13.9 pts | - The increase in incurred losses was primarily due to a **$449 million** rise in current year catastrophe losses and a **$208 million** increase in current year attritional losses[139](index=139&type=chunk) - Catastrophe losses in Q1 2025 totaled **$534 million**, mainly from the Southern California wildfires (**$512 million**) and the Myanmar earthquake (**$22 million**) This compares to **$85 million** in Q1 2024, which was related to the Baltimore bridge collapse and U.S. storms[139](index=139&type=chunk) - Shareholders' equity increased by **$264 million** from year-end 2024, driven by net income, unrealized appreciation on investments, and foreign currency adjustments, partially offset by **$200 million** in share repurchases and **$85 million** in dividends[152](index=152&type=chunk) [Segment Results](index=54&type=section&id=Segment%20Results) Both the Reinsurance and Insurance segments reported underwriting losses in Q1 2025, driven by increased catastrophe and attritional losses, leading to higher combined ratios Reinsurance Segment Performance | Reinsurance Segment | Q1 2025 (in million USD) | Q1 2024 (in million USD) | | :--- | :--- | :--- | | Underwriting Gain (Loss) | ($96 million) | $347 million | | Combined Ratio | 103.3% | 87.3% | - The Reinsurance segment's performance was heavily impacted by **$523 million** in catastrophe losses, primarily from the Southern California wildfires and the Myanmar earthquake[163](index=163&type=chunk) Insurance Segment Performance | Insurance Segment | Q1 2025 (in million USD) | Q1 2024 (in million USD) | | :--- | :--- | :--- | | Underwriting Gain (Loss) | ($5 million) | $71 million | | Combined Ratio | 100.5% | 91.9% | - The Insurance segment's higher attritional losses were primarily due to higher loss selections in casualty lines, partially offset by changes in the mix of business[169](index=169&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=58&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company maintains a robust financial condition with increased investments and loss reserves, strong capital levels, and active capital management despite underwriting losses - Gross loss and LAE reserves increased to **$31.5 billion** at March 31, 2025, from **$29.9 billion** at year-end 2024[179](index=179&type=chunk) - The company's capital levels for its main operating subsidiaries, Bermuda Re and Everest Re, significantly exceeded regulatory targeted capital as of December 31, 2024[190](index=190&type=chunk) - In Q1 2025, the company repurchased **574,000** common shares for **$200 million** and paid **$85 million** in dividends[192](index=192&type=chunk) - Net cash flow from operating activities was **$928 million** for Q1 2025, down from **$1.1 billion** in Q1 2024[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate risk and foreign currency risk, with sensitivity analysis showing potential impacts on unrealized appreciation Interest Rate Sensitivity Analysis | Interest Rate Shift | Fair Value Change from Base (%) | Change in After-tax Unrealized Appreciation (in million USD) | | :--- | :--- | :--- | | +100 bps | (3.3)% | ($962 million) | | -100 bps | 3.3% | $962 million | - The company's primary foreign currency exposures are to the Canadian Dollar, Singapore Dollar, British Pound Sterling, and the Euro[208](index=208&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures are effective, with no material changes to internal control over financial reporting during the period - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective as of March 31, 2025[210](index=210&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and arbitrations in the ordinary course of its business, with no other material litigation reported - The Company is not a party to any material litigation or arbitration outside of the ordinary course of business related to its insurance and reinsurance agreements[211](index=211&type=chunk)[212](index=212&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors from the most recent Form 10-K were reported - No material changes to the risk factors from the most recent Form 10-K were reported[213](index=213&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity during Q1 2025, including shares purchased under the publicly announced program Share Repurchase Activity | Period | Total Shares Purchased | Average Price Paid (in USD) | Shares Purchased Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | — | | Feb 2025 | 276,667 | $336.77 | 247,128 | | Mar 2025 | 352,698 | $357.56 | 326,872 | | **Total Q1** | **629,365** | **—** | **574,000** | [Other Information](index=66&type=section&id=Item%205.%20Other%20Information) The company disclosed the termination of CEO James Williamson's Rule 10b5-1 trading plan in February 2025 - On February 13, 2025, CEO James Williamson terminated his Rule 10b5-1 trading plan, which was originally set to expire in August 2025[218](index=218&type=chunk) [Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including employment agreements, certifications, and XBRL data files - Exhibits filed include an employment agreement for CEO James Williamson, Section 302 and 906 certifications, and XBRL data files[220](index=220&type=chunk)

Everest Group (EG) reported first-quarter 2025 operating income of $6.45 per share, which missed the Zacks Consensus Estimate by 13.5%. The bottom line dropped 60.5% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Everest Group suffered due to catastrophe losses, stemming primarily from the California wildfires.    Operational UpdateEverest Group’s total operating revenues of nearly $4.3 billion increased 3.1% year over year on higher premiums earned and net investme ...

Financial Data and Key Metrics Changes - The combined ratio for the quarter was 102.7%, elevated due to catastrophe losses, particularly from California wildfires [5][20] - Total group written premium was $4.4 billion, similar to Q1 2024, with a gross written premium decrease of 2% in constant dollars [6][20] - Operating income for the quarter was $276 million, despite significant catastrophe loss activity [19][20] - The attritional loss ratio increased to 62.2%, a 330 basis point increase year-over-year, driven by aviation losses [21][29] - Shareholders' equity ended the quarter at $14.1 billion, with book value per share at $332.39, reflecting a 3.5% improvement from year-end 2024 [30][31] Business Line Data and Key Metrics Changes - In reinsurance, gross premiums decreased by 1.1% in constant dollars, with property lines showing double-digit increases offset by discipline in casualty lines [22] - Written premium in the insurance segment was down 1.3% year-over-year, with property lines growing 19% and specialty businesses growing 16% [11][24] - The attritional loss ratio in the insurance business was 68.8%, with aviation losses contributing 0.9 points to the ratio [26][29] Market Data and Key Metrics Changes - The reinsurance book shrank marginally at the January 1, 2025 renewal, reflecting 6% property growth offset by cutbacks in casualty [8] - The international insurance business turned a modest profit in the quarter, with strong growth in key markets [14] - Casualty rate increases averaged approximately 20% across commercial auto, general liability, and excess umbrella [13] Company Strategy and Development Direction - The company is focused on growing where risk-adjusted returns meet or exceed thresholds, intentionally shrinking in areas with weak pricing relative to risk [7] - The strategy includes a one-year, one-renewal approach to improve the casualty lines within the insurance division [19] - The company expects to continue repurchasing shares throughout 2025, prioritizing shareholder value [17][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of catastrophic events on financials but emphasized the importance of supporting communities [5] - The company anticipates moderate catastrophe pricing pressure for the remainder of 2025 but sees ample opportunities for capital deployment at attractive expected returns [8] - Management expressed confidence in the reserve position and the ability to respond to inflationary pressures [16][30] Other Important Information - The company repurchased $200 million of shares in the quarter at an average price of $348 per share [17][32] - Net investment income increased to $491 million for the quarter, driven by higher assets under management [29] - The company has completed a thorough assessment of exposure to new tariff regimes, expecting modest upward pressure on loss cost trends [17] Q&A Session Summary Question: Discussion on growth opportunities in Florida - Management expects the June 1 renewal to be attractive, with potential growth opportunities across both domestic and nationwide carriers [35][36] Question: Competitive market dynamics in specialty lines - Management noted that while competition has increased, there are still significant opportunities in specialty underwriting areas [38][39] Question: Capital capacity for growth and buybacks - Management indicated that there is sufficient capacity to support both growth initiatives and share repurchases [42][43] Question: Pricing actions from underlying primaries - Management confirmed that pricing remains strong, and they are focused on portfolio management and claims handling to ensure expected results [45][46] Question: Clarification on moderate pricing pressure in the market - Management explained that while pricing is moderating, expected returns remain attractive, allowing for continued capital deployment [50][54] Question: Impact of California wildfire losses on financials - Management stated that the majority of wildfire losses are in reinsurance, and any recoveries would benefit the company, although they are taking a cautious approach [57][58] Question: Aviation loss details and industry impact - Management estimated industry losses around $1 billion, with their portfolio performing well despite the significant loss [84][85] Question: Reserve review process and expectations - Management clarified that while reserve reviews occur annually, they have increased the frequency of assessing loss trend assumptions [101][102]

Financial Data and Key Metrics Changes - The combined ratio for the quarter was 102.7%, elevated due to catastrophe losses, particularly from California wildfires, contributing 13.9 points to the ratio [4][19] - Total group written premium was $4.4 billion, similar to Q1 2024, with a gross written premium decrease of 2% in constant dollars [5][19] - Operating income for the quarter was $276 million, despite significant catastrophe loss activity [18][19] - The group attritional loss ratio increased to 62.2%, a 330 basis point increase year-over-year, primarily due to aviation losses [20][21] Business Line Data and Key Metrics Changes - In reinsurance, gross premiums decreased by 1.1% in constant dollars, with property lines growing by double digits while casualty lines remained disciplined [22] - The attritional loss ratio in reinsurance increased to 59.8%, influenced by aviation losses [23] - In the insurance segment, gross premiums written were relatively flat at $1.1 billion, with property lines growing by 19% and specialty businesses by 16%, offset by a 15% decline in the third-party book [10][24] Market Data and Key Metrics Changes - The company experienced a 16% growth in property lines within reinsurance, while casualty lines saw a 22% decline due to portfolio actions [7][8] - The international insurance business showed strong growth in key markets, turning a modest profit despite ongoing investments [13] - Casualty rate increases averaged approximately 20% across various lines, indicating a robust pricing environment [12][26] Company Strategy and Development Direction - The company is focused on disciplined underwriting and risk management, intentionally shrinking areas with weak pricing relative to risk [6][8] - There is an emphasis on maintaining a strong capital position, with share buybacks prioritized given the excess capital [16][32] - The company anticipates moderate catastrophe pricing pressure but sees ample opportunities to deploy capital at attractive expected returns [7][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of catastrophic events on financial performance but expressed confidence in the company's underwriting capabilities [4][6] - The outlook for the remainder of 2025 includes expectations for continued growth in property lines and a disciplined approach to casualty lines [7][18] - Management remains cautious about the potential impact of tariffs and inflation on loss trends, with a proactive approach to adjusting loss picks [16][75] Other Important Information - The company repurchased $200 million worth of shares during the quarter, reflecting a commitment to returning value to shareholders [16][33] - The overall reserve position improved since the end of 2024, with a focus on maintaining strong reserves in the face of potential inflationary pressures [14][100] - The net investment income for the quarter was $491 million, driven by higher assets under management [29][30] Q&A Session Summary Question: Discussion on growth opportunities in Florida at midyear - Management expects attractive opportunities at the June renewal, with increased demand from clients for higher limits [36][37] Question: Competitive market dynamics in specialty lines - Management noted that while competition has increased, there are still significant opportunities in specialty underwriting areas [38][40] Question: Capital capacity for growth and share repurchases - Management indicated that there is sufficient capacity to support both growth initiatives and share buybacks [43][45] Question: Pricing actions from underlying primary insurers - Management confirmed that pricing remains strong, but portfolio management and claims handling are also critical factors [46][48] Question: Clarification on moderate pricing pressure in the market - Management clarified that while pricing is moderating, expected returns remain attractive, allowing for continued growth [51][55] Question: Impact of California wildfire losses on financials - Management stated that the majority of wildfire losses are in reinsurance, and any recoveries would benefit the company, although they are taking a cautious approach [57][58] Question: New business opportunities in the insurance segment - Management highlighted that while U.S. casualty business is shrinking, there are strong growth opportunities in specialty lines and international markets [65][66] Question: Timing and mechanics of responding to tariffs - Management explained that they have increased the frequency of assessing loss trend assumptions to respond quickly to any inflationary pressures [74][75] Question: Updates on property cat portfolio and loss expectations - Management confirmed that while there are no dramatic changes in loss expectations, they are continuously adjusting models based on the latest data [110][111]