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]

Financial Data and Key Metrics Changes - The company reported a 44% increase in gross written premiums, reaching $597.2 million for the third quarter of 2025 compared to the same period in 2024 [19] - Adjusted net income grew 70% to $55.2 million or $2.01 per share, up from $32.4 million or $1.23 per share year-over-year [18] - The adjusted combined ratio improved to 74.8% from 77.1% in the previous year, indicating better underwriting performance [18] - Annualized adjusted return on equity was 25.6%, compared to 21% for the same period last year [18] Business Line Data and Key Metrics Changes - The earthquake franchise grew 11% year-over-year, driven by strong performance in the residential earthquake market with an 88% policy retention rate [7] - Inland marine and other property categories saw a 50% year-over-year growth, significantly up from 28% in the second quarter [10] - The casualty business experienced a remarkable 170% year-over-year growth in gross written premiums [12] - The Crop franchise doubled its gross written premium to $120 million, exceeding the previous year's $60 million [14] Market Data and Key Metrics Changes - The commercial earthquake business faced rate pressure, with average risk prices decreasing approximately 18% on a risk-adjusted basis [8] - The company expects single-digit growth in the earthquake book for the fourth quarter, influenced by a one-time under premium transfer from the previous year [9] - The partnership with Neptune Flood is anticipated to accelerate growth in the residential flood product over the next three years [10] Company Strategy and Development Direction - The company is focused on profitable growth and has entered select specialty markets that offer compelling, risk-adjusted returns [5] - The acquisition of Gray Casualty and Surety Company is expected to enhance the company's surety platform and market position [5] - The company aims to double adjusted net income over a three to five-year timeframe as part of its Palomar 2X initiative [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term ability to profitably grow the earthquake business despite market challenges [9] - The company anticipates favorable conditions in the Crop market, with expectations to exceed the 15-year average industry loss ratio [15] - Management remains optimistic about achieving the revised full-year adjusted net income guidance of $210 million to $215 million [27] Other Important Information - The company placed seven reinsurance treaties during the third quarter, all renewing on favorable terms [15] - Investment income for the third quarter increased by 55% year-over-year, driven by higher yields on invested assets [25] - The acquisition of Gray Surety is expected to close in the first quarter of 2026 and should be accretive to earnings in its first year [16] Q&A Session Summary Question: Market opportunity in surety and competition - Management highlighted the complementary nature of Gray Surety to existing operations and the potential to become a top 20 surety carrier [29][30] Question: Future of the Crop business - Management expressed confidence in growing the Crop business to $500 million in the near term, emphasizing service and technology investments [33] Question: Net income guidance and catastrophe losses - Management confirmed that the updated guidance includes expectations for catastrophe losses, with a favorable outlook for the loss ratio [34] Question: Rate pressure in commercial earthquake - Management acknowledged ongoing rate pressure but indicated that the residential earthquake book's strength would support growth [36] Question: Net earned premium ratio expectations - Management expects the net earned premium ratio to increase in the fourth quarter and into the first half of the following year [37] Question: Healthcare liability book specifics - Management provided details on the healthcare liability book, including targeted segments and the current market conditions [45] Question: Stickiness of flood policies - Management noted strong policy renewal rates and increased interest in new business due to the federal program's shutdown [46] Question: Growth trajectory and future hiring - Management indicated plans for continued organic growth and potential opportunistic hiring to sustain growth momentum [51]

Core Insights - Palomar Holdings, Inc. (PLMR) reported a third-quarter 2025 operating income of $2.01 per share, exceeding the Zacks Consensus Estimate by 25.6% and reflecting a year-over-year increase of 63.4% [1][9] - Total revenues rose 65% year over year to $241 million, driven by higher premiums and investment income, surpassing the Zacks Consensus Estimate by 6.6% [2][9] - The company raised its 2025 adjusted net income forecast to a range of $210 million to $215 million, up from the previous estimate of $198 million to $208 million [7][9] Revenue and Premiums - Gross written premiums increased by 43.9% year over year to $597.2 million, although this was below the estimate of $676.8 million [2] - Net earned premiums saw a significant rise of 66% year over year, reaching $225.1 million, exceeding the estimate of $194.2 million [2] Investment Income - Net investment income grew by 54.9% year over year to $14.6 million, driven by higher yields and a larger average balance of investments [3] Underwriting Performance - Adjusted underwriting income was reported at $56.6 million, an increase of 82.5% from the previous year, while total underwriting income rose 86% year over year to $49.2 million [4] - The loss ratio was recorded at 32.3, deteriorating by 260 basis points year over year, while the adjusted combined ratio improved by 230 basis points to 74.8 [5] Financial Position - Cash and cash equivalents increased by 38.9% from the end of 2024 to $111.7 million at the end of Q3 2025 [6] - Shareholder equity rose by 20.4% from the end of 2024 to $878.1 million [6] - The annualized adjusted return on equity for Q3 2025 was 25.6%, expanding by 460 basis points year over year [6]

Core Insights - Palomar (PLMR) reported a revenue of $241.17 million for the quarter ended September 2025, reflecting a year-over-year increase of 65.4% [1] - The earnings per share (EPS) for the quarter was $2.01, up from $1.23 in the same quarter last year, indicating a significant growth [1] - The reported revenue exceeded the Zacks Consensus Estimate by 6.66%, while the EPS surpassed the consensus estimate by 25.63% [1] Financial Metrics - Loss Ratio was reported at 32.3%, significantly better than the five-analyst average estimate of 37.9% [4] - Combined Ratio stood at 78.1%, outperforming the four-analyst average estimate of 83.3% [4] - Expense Ratio was recorded at 45.8%, slightly above the average estimate of 44.1% based on four analysts [4] - Adjusted combined ratio was 74.8%, better than the two-analyst average estimate of 79.8% [4] - Net investment income was $14.57 million, exceeding the average estimate of $13.59 million by analysts, representing a year-over-year increase of 54.9% [4] - Net earned premiums reached $225.15 million, surpassing the five-analyst average estimate of $211.64 million, with a year-over-year growth of 66% [4] - Commission and other income amounted to $1.45 million, exceeding the average estimate of $1.08 million, reflecting a year-over-year increase of 102.5% [4] - Net realized and unrealized gains (losses) on investments were reported at $3.49 million, below the two-analyst average estimate of $5.88 million [4] Stock Performance - Over the past month, Palomar's shares have returned -1.9%, contrasting with the Zacks S&P 500 composite's +1.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - Net income for Q3 2025 was $51.5 million, or $1.87 per diluted share, compared to $30.5 million, or $1.15 per diluted share, in Q3 2024[2] - Adjusted net income increased 70% to $55.2 million, or $2.01 per diluted share, from $32.4 million, or $1.23 per diluted share, in Q3 2024[4] - Net income for Q3 2025 was $51,455, up 68.7% from $30,497 in Q3 2024[36] - Total underwriting revenue for Q3 2025 increased to $226,595, a 66.2% rise from $136,361 in Q3 2024[36] - The company’s net comprehensive income for the nine months ended September 30, 2025, was $163.658 million, compared to $96.460 million in the same period of 2024, reflecting a 69.7% increase[42] - Adjusted net income for the nine months ended September 30, 2025, was $155,003, representing a 68.1% increase from $92,219 in 2024[37] Premiums and Revenue - Gross written premiums rose 43.9% to $597.2 million compared to $415.0 million in Q3 2024[5] - Gross written premiums for Q3 2025 reached $597,171, a 43.9% increase from $414,977 in Q3 2024[36] - Net written premiums for Q3 2025 were $275,244, reflecting a 72.3% growth compared to $159,710 in Q3 2024[36] - For the nine months ended September 30, 2025, gross written premiums totaled $1,535,623, a 31.4% increase from $1,168,239 in the same period of 2024[37] - The company reported total revenues of $244.660 million for Q3 2025, a 64.6% increase from $148.503 million in Q3 2024[42] Ratios and Returns - The total loss ratio for Q3 2025 was 32.3%, up from 29.7% in Q3 2024, with a catastrophe loss ratio of 0.8% compared to 9.5% in the prior year[9] - The combined ratio improved to 78.1% from 80.5% in Q3 2024, while the adjusted combined ratio was 74.8% compared to 77.1% in the same period last year[7] - Annualized return on equity was 23.9%, up from 19.7% in Q3 2024, with an annualized adjusted return on equity of 25.6% compared to 21.0% in the prior year[12] - Annualized adjusted return on equity for Q3 2025 was 25.6%, compared to 21.0% in Q3 2024[48] - Adjusted combined ratio for the nine months ended September 30, 2025, is 78.1%, compared to 80.5% for the same period in 2024[49] Investments and Assets - Net investment income increased by 54.9% to $14.6 million from $9.4 million in Q3 2024, driven by higher yields on invested assets[8] - Total assets as of September 30, 2025, were $2,943,546, an increase from $2,262,220 as of December 31, 2024[39] - Stockholders' equity increased to $878.1 million at September 30, 2025, from $703.3 million at the same date in 2024[12] - Tangible stockholders' equity as of September 30, 2025, is $815,572,000, an increase from $715,788,000 as of December 31, 2024[50] Expenses and Losses - The company’s total expenses for Q3 2025 were $177.521 million, compared to $110.000 million in Q3 2024, an increase of 61.0%[42] - Total losses and loss adjustment expenses for Q3 2025 were $72,812,000, an increase of 80.6% from $40,315,000 in Q3 2024[45] - Catastrophe losses decreased significantly by 85.3% to $1,900,000 in Q3 2025 from $12,924,000 in Q3 2024[45] - The company incurred catastrophe losses of $1,900,000 for the three months ended September 30, 2025, down from $12,924,000 in 2024[50] Acquisitions - The company announced the acquisition of The Gray Casualty and Surety Company during the quarter, aiming to drive long-term profitable growth[4]

Core Insights - Palomar Holdings, Inc. reported a significant increase in net income for Q3 2025, reaching $51.5 million or $1.87 per diluted share, compared to $30.5 million or $1.15 per diluted share in Q3 2024, marking a 68.7% increase [1][8] - Adjusted net income also saw a substantial rise of 70% to $55.2 million or $2.01 per diluted share, up from $32.4 million or $1.23 per diluted share in the same quarter last year [1][8] - The company achieved record gross written premiums of $597.2 million, a 43.9% increase from $415.0 million in Q3 2024, indicating strong growth in its insurance portfolio [4][8] Financial Performance - Gross written premiums increased by 43.9% to $597.2 million compared to $415.0 million in Q3 2024 [4][8] - Net earned premiums rose by 66.0% to $225.1 million from $135.6 million in the prior year [4][8] - The total loss ratio for the quarter was 32.3%, up from 29.7% in Q3 2024, while the catastrophe loss ratio significantly decreased to 0.8% from 9.5% [5][8] - The combined ratio improved to 78.1% from 80.5% year-over-year, indicating better underwriting performance [6][8] Underwriting and Investment Results - Underwriting income for Q3 was $49.2 million, with an adjusted underwriting income of $56.7 million, reflecting an adjusted combined ratio of 74.8% compared to 77.1% in the previous year [6][8] - Net investment income increased by 54.9% to $14.6 million, driven by higher yields on invested assets [7][8] - The company recorded $3.5 million in net realized and unrealized gains on investments, compared to $2.7 million in the same period last year [9][8] Strategic Initiatives - The company is focused on its "Palomar 2X" strategic imperatives, with notable growth in its crop insurance segment and the recent acquisition of The Gray Casualty and Surety Company [3][8] - Investments in Crop and Surety are expected to drive long-term profitable growth and enhance portfolio differentiation [3][8] Stockholder Equity and Returns - Stockholders' equity increased to $878.1 million as of September 30, 2025, compared to $703.3 million a year earlier [11][8] - The annualized return on equity was reported at 23.9%, up from 19.7% in Q3 2024, while the annualized adjusted return on equity reached 25.6%, compared to 21.0% in the prior year [11][8] Full Year Outlook - For the full year 2025, the company expects adjusted net income to be in the range of $210 million to $215 million, an increase from the previously announced range of $198 million to $208 million [12][8]