Company Overview - Palomar Holdings, Inc. (PLMR) is a specialty insurance company focused on property and casualty products, including earthquake, inland marine, and excess and surplus lines [4] Analyst Ratings and Price Targets - JPMorgan raised the price target for PLMR to $155 from $145 while maintaining an Overweight rating, indicating confidence in the company's growth potential despite challenging industry fundamentals [2] - Keefe, Bruyette & Woods also raised its price target on PLMR to $171 from $170 and reiterated an Outperform rating, reflecting positive analyst sentiment towards the stock [3] Industry Context - The property and casualty (P&C) insurance industry is facing worsening fundamentals, but pricing, margin, and growth concerns appear to be largely priced in according to analysts [2]

Core Viewpoint - Palomar (PLMR) is showing potential as a strong investment opportunity due to its recent technical performance and positive earnings revisions [1][3]. Technical Analysis - PLMR has recently crossed above the 200-day moving average, indicating a long-term bullish trend [1]. - The stock has gained 17.9% over the past four weeks, suggesting strong momentum [2]. Earnings Estimates - There have been no downward revisions in earnings estimates for the current fiscal year in the past two months, while five estimates have been revised upward [3]. - The consensus estimate for PLMR has also increased, reinforcing the bullish outlook for the stock [3]. Market Position - PLMR is currently ranked as a Zacks Rank 2 (Buy), indicating strong potential for further price appreciation [2].

Core Insights - The article emphasizes the focus on value investing in Asia, particularly in Hong Kong, targeting stocks with significant discrepancies between market price and intrinsic value [1] - It highlights two main categories of investment opportunities: deep value balance sheet bargains and wide moat stocks, which are characterized by their strong competitive advantages [1] Group 1: Investment Strategy - The investment strategy involves seeking deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) ratio stocks [1] - The strategy also includes identifying wide moat stocks, which are high-quality businesses with sustainable competitive advantages [1] Group 2: Research Service - The research service, Asia Value & Moat Stocks, provides value investors with ideas and monthly updates on potential investment opportunities in the Asian equity market [1] - The service is led by an analyst with over a decade of experience in both buy and sell sides of the market, specializing in Asian equities [1]

Core Insights - Palomar Holdings, Inc. (PLMR) has seen a stock price increase of 29.3% over the past year, outperforming its industry and major indices [1] - The company has a market capitalization of $3.64 billion and has consistently beaten earnings estimates with an average surprise of 17.65% over the last four quarters [2] Stock Performance - PLMR is currently trading above its 50-day and 200-day simple moving averages of $122.22 and $134.23, indicating strong upward momentum [3] Growth Projections - The Zacks Consensus Estimate predicts a 51.2% year-over-year increase in earnings per share for 2025, with revenues expected to reach $835.13 million, reflecting a 52% increase [7] - Analysts have raised their earnings estimates for 2025 and 2026 by 5.6% and 2.5%, respectively, over the past 60 days [8] Analyst Sentiment - The average price target for PLMR is $156.17 per share, suggesting a potential upside of 13.7% from the last closing price [9] Financial Metrics - Palomar's return on equity stands at 24.2%, significantly higher than the industry average of 8%, and its return on invested capital is 21%, compared to the industry average of 6.1% [10] Growth Drivers - The introduction of the fee-based platform PLMR-FRONT is expected to enhance earnings stability and drive medium-term growth [6] - Factors such as increased policy volumes, strong retention rates, and new partnerships are anticipated to contribute to premium growth [11] Investment Strategy - The company is focusing on Surety as a long-term growth opportunity, which offers diversification and stability [12] - Net investment income is projected to rise due to a high-quality fixed-income portfolio and improved yields [14] Capital Position - Palomar maintains a strong capital position with a debt-free balance sheet and is actively executing share buybacks as part of its shareholder return initiatives [15] Market Positioning - The company is positioning itself as a key player in the crop insurance sector, with ongoing geographic expansion and strategic partnerships expected to fuel future growth [16] - Palomar's risk transfer strategy through reinsurance helps mitigate exposure to catastrophic events, contributing to a stable business model [17]

Core Insights - Riverwater Partners' Small Cap Strategy reported solid results in Q3 2025 but lagged behind the benchmark due to market preference for lower-quality companies [1] - The strategy focuses on higher-quality companies with strong fundamentals and a clear path to profitability, positioning itself well for future challenges [1] Company Performance - Palomar Holdings, Inc. (NASDAQ:PLMR) has a market capitalization of $3.362 billion, with a one-month return of -3.16% and a 52-week gain of 12.93% [2] - On December 15, 2025, Palomar's stock closed at $125.52 per share [2] Underperformance Analysis - Palomar's stock underperformance in Q3 2025 is attributed to weaker commercial market pricing, a shift away from defensive sectors, and concerns about underwriting margin compression [3] - Rate reductions in commercial earthquake and property markets have pressured premium renewal yields, impacting growth [3] - Despite challenges, Palomar has strong visibility into premium growth through multi-year rate plans and expansion into diversified lines like casualty and crop insurance [3] Financial Results - In Q3 2025, Palomar reported adjusted net income of $55.2 million or $2.01 per share, compared to $32.4 million or $1.23 per share in Q3 2024 [4] - The increase in adjusted net income indicates potential for growth, although some analysts suggest that certain AI stocks may offer greater upside potential [4]

Core Viewpoint - Palomar (PLMR) has reached a significant support level and shows potential for investors from a technical perspective, particularly after breaking through the 20-day moving average, indicating a short-term bullish trend [1]. Technical Analysis - The 20-day simple moving average (SMA) is a widely used trading tool that smooths out price fluctuations over a 20-day period, providing more trend reversal signals than longer-term moving averages [1][2]. - A stock price above the 20-day SMA indicates a positive trend, while a price below suggests a downward trend [2]. Earnings Estimates - PLMR has experienced positive earnings estimate revisions, with no estimates decreasing in the past two months and five estimates increasing, leading to a rise in the consensus estimate [3]. - The combination of positive technical factors and favorable earnings estimate revisions suggests that investors may want to monitor PLMR for potential gains in the near future [3]. Performance Metrics - Over the past four weeks, PLMR has gained 8.4%, and the company holds a Zacks Rank 2 (Buy), indicating strong potential for further upward movement [4].

Core Viewpoint - Palomar (PLMR) has shown a 7% increase in stock price over the past four weeks, with a mean price target of $155.67 indicating a potential upside of 28% from the current price of $121.66 [1] Price Targets and Analyst Estimates - The mean estimate consists of six short-term price targets with a standard deviation of $14.62, where the lowest estimate is $134.00 (10.1% increase) and the highest is $170.00 (39.7% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about PLMR's earnings prospects, with five estimates moving higher in the last 30 days and no negative revisions, leading to a 6% increase in the Zacks Consensus Estimate [12][11] - PLMR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as empirical research indicates that such targets often mislead investors [3][7] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Core Insights - Palomar Holdings, Inc. (PLMR) has seen a 15.8% increase in share price over the past year, outperforming its industry and the broader market indices [1] - The company has a market capitalization of $3.36 billion and has consistently beaten earnings estimates over the past four quarters with an average surprise of 17.65% [2] Financial Performance - The Zacks Consensus Estimate for Palomar Holdings' 2025 earnings per share indicates a year-over-year increase of 51.2%, with revenues projected to reach $835.13 million, reflecting a 52% improvement [3] - Analysts have raised earnings estimates for 2025 and 2026 by 5.6% and 1.9%, respectively, over the past 30 days [4] Growth Drivers - The company expects stronger earnings from its fee-based platform and rising policy volumes, with growth driven by geographic expansion, new partnerships, and increased distribution [6][11] - Palomar identifies Surety as a long-term growth opportunity, which is not correlated with traditional insurance cycles, providing diversification [12] Investment Metrics - The average target price for PLMR is $155.67 per share, suggesting a potential upside of 20.1% from the last closing price [7] - Return on equity stands at 24.2%, significantly higher than the industry average of 8%, while return on invested capital is 21%, compared to the industry average of 6.1% [10] Strategic Positioning - The company maintains a strong capital position with a debt-free balance sheet and continues to execute share buybacks as part of its shareholder return initiatives [13] - Palomar's risk transfer strategy helps stabilize earnings and improve its combined ratio, contributing to a resilient business model [15] Conclusion - Palomar Holdings is well-positioned in the crop insurance sector, with a diverse product suite and ongoing geographic growth, indicating strong prospects for future expansion [14]

Core Insights - Palomar Holdings reported Q3 CY2025 revenue of $244.7 million, exceeding analyst expectations by 10.2% and reflecting a year-on-year growth of 64.8% [1][6] - The company's non-GAAP profit was $2.01 per share, which was 24.8% above consensus estimates [1][6] Financial Performance - Adjusted operating income reached $67.14 million, representing a 27.4% margin and a year-on-year growth of 74.4% [6] - Operating margin improved to 27.4%, up from 25.9% in the same quarter last year [6] - Market capitalization stands at $3.39 billion [6] Business Strategy and Growth - Management attributed strong performance to product diversification, disciplined underwriting, and robust premium growth across various product lines [3][5] - The company plans to integrate the Gray Casualty and Surety Company acquisition and expand specialty lines, with a focus on strategic partnerships and technology investments [4] - The goal is to double adjusted net income every 3 to 5 years, maintaining a strong return on equity [4] Product Diversification - All major product groups, except for fronting, experienced double-digit premium growth, with new lines like crop and surety contributing significantly [7] - The residential earthquake franchise grew by 11% year-on-year, supported by new business production and high policy retention [7] - Crop insurance premiums doubled year-on-year due to favorable market conditions and new talent, while builders risk products also saw strong expansion [7] Risk Management - The company maintains a conservative reserving approach, particularly in its casualty business, with over 80% of reserves held as incurred but not reported (IBNR) [8]

Financial Performance - Gross written premiums increased from $16.6 million in 2014 to $1.5 billion for the year ended December 31, 2024, reflecting a compound annual growth rate of approximately 57%[104] - The company has been profitable since 2016, with net income growth reflecting a compound annual growth rate of 43% since that year[104] - Net income for the three months ended September 30, 2025, was $51.5 million, an increase of $20.9 million or 68.7% from $30.5 million in 2024[145] - The company reported net income of $140.9 million for the nine months ended September 30, 2025, an increase of $58.3 million, or 70.6%, compared to $82.6 million for the same period in 2024[154] - Total revenue for the nine months ended September 30, 2025, was $622.6 million, up from $398.1 million in 2024[174] Premiums and Underwriting - Gross written premiums increased by $182.2 million, or 43.9%, to $597.2 million for the three months ended September 30, 2025, compared to $414.9 million for the same period in 2024[138] - Net written premiums rose by $115.5 million, or 72.3%, to $275.2 million for the three months ended September 30, 2025, from $159.7 million in the prior year[142] - Net earned premiums increased by $89.5 million, or 66.0%, to $225.1 million for the three months ended September 30, 2025, compared to $135.6 million for the same period in 2024[143] - Gross written premiums increased by $367.4 million, or 31.4%, to $1.5 billion for the nine months ended September 30, 2025, compared to $1.2 billion for the same period in 2024[155] - Net written premiums rose by $240.8 million, or 50.6%, to $716.5 million for the nine months ended September 30, 2025, driven primarily by increased gross written premiums in the Casualty and Crop lines[160] Expenses and Losses - Losses and loss adjustment expenses surged by $32.5 million, or 80.6%, to $72.8 million for the three months ended September 30, 2025, from $40.3 million in 2024[145] - Acquisition expenses increased by $14.8 million, or 35.7%, to $56.3 million for the three months ended September 30, 2025, compared to $41.5 million for the same period in 2024[147] - Other underwriting expenses rose by $20.2 million, or 71.7%, to $48.3 million for the three months ended September 30, 2025, from $28.1 million in 2024[148] - Losses and loss adjustment expenses increased by $60.2 million, or 61.6%, to $157.7 million for the nine months ended September 30, 2025, compared to $97.6 million in 2024[164] - Non-catastrophe losses surged by $78.5 million, or 100.9%, to $156.4 million for the nine months ended September 30, 2025, from $77.9 million in 2024[164] Investment Income - Net investment income increased by $5.2 million, or 54.9%, to $14.6 million for the three months ended September 30, 2025, compared to $9.4 million in 2024[145] - Net investment income rose by $15.5 million, or 63.3%, to $40.0 million for the nine months ended September 30, 2025, compared to $24.5 million for the same period in 2024[154] Ratios and Returns - The combined ratio is defined as the sum of the loss ratio and the expense ratio, with a ratio under 100% indicating an underwriting profit[129] - The combined ratio decreased to 78.1% for the three months ended September 30, 2025, from 80.5% in 2024, indicating improved underwriting performance[145] - The annualized return on equity improved to 23.9% for the three months ended September 30, 2025, compared to 19.7% in the prior year[145] - The annualized return on equity improved to 23.4% for the nine months ended September 30, 2025, up from 18.8% in the prior year[154] - Annualized adjusted return on equity for Q3 2025 is 25.6%, up from 21.0% in Q3 2024[181] Equity and Dividends - Tangible stockholders' equity is defined as stockholders' equity less intangible assets, providing a clearer view of the company's financial health[135] - Total stockholders' equity increased to $878.1 million as of September 30, 2025, up from $729.0 million at the end of 2024, driven by net income and unrealized gains on fixed maturity securities[217] - The maximum dividend PSIC can pay in 2025 without regulatory approval is $99.6 million[195] - The maximum dividend PESIC can pay in 2025 without regulatory approval is $4.2 million[196] - FIA has the capacity to pay a dividend of $2.3 million in 2025, subject to regulatory approval[197] Reinsurance and Risk Management - The company utilizes a comprehensive risk transfer program with reinsurance coverage to reduce earnings volatility[103] - The company has $1.2 billion of multi-year indemnity-based reinsurance coverage for earthquake events, issued through Torrey Pines Re Ltd[224] - Catastrophe event retention is $20 million for earthquake events and $11 million for hurricane events, with reinsurance coverage exhausting at $3.53 billion for earthquake events and $100 million for continental U.S. hurricane events[225] - The company utilizes a mix of traditional reinsurers and insurance linked securities, purchasing reinsurance from over 100 reinsurers with a minimum rating of "A−" (Excellent) or better[223] - The company employs treaty reinsurance primarily consisting of catastrophe excess of loss (XOL) coverage, which assumes losses relating to specified events[224] Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2025, was $291.7 million, compared to $188.5 million for the same period in 2024, reflecting a significant increase[206] - As of September 30, 2025, the company had $1.3 billion in cash and investment securities available, ensuring sufficient liquidity for future operating cash flows[210] - The company had no borrowings outstanding through the Credit Agreement as of September 30, 2025, indicating strong liquidity management[214] - The company’s cash and cash equivalents totaled $111.7 million as of September 30, 2025, contributing to overall liquidity[219] Investment Portfolio - The investment portfolio as of September 30, 2025, included $1.1 billion in fixed maturity securities, with a book yield of 4.84%, compared to 4.59% at the end of 2024[220] - The fixed maturity portfolio has an average rating of "AA−," with approximately 68.8% rated "A−" or better, and 4.9% unrated or rated below investment grade as of September 30, 2025[231] - The majority of the investment portfolio is in high credit quality, investment grade fixed maturity securities, managing credit risk through diversification[230]