Kingstone(KINS) ZACKS·2025-02-28 17:50Core Insights - Kingstone Companies (KINS) reported a significant improvement in its fourth-quarter and full-year 2024 earnings results, with a notable increase in direct written premium and enhancements in combined, loss, and expense ratios [1][4]. Preliminary Results - Operating income for the fourth quarter increased more than three-fold year over year to $0.49 per share [4]. - Core direct written premium grew by 49%, while total direct written premium increased by 37% [4]. - The consolidated GAAP combined ratio improved by 1,100 basis points to 79%, compared to a Zacks Consensus Estimate of 80.4 [4]. - The net loss ratio improved by 800 basis points to 49%, against a Zacks Consensus Estimate of 51 [4]. - The net expense ratio improved by 300 basis points to 30%, while the Zacks Consensus Estimate was 29.4 [4]. Growth Strategy - KINS is focusing on its core business and scaling back unprofitable non-core operations, positioning itself well for future growth [5]. - The company has successfully implemented price increases ahead of inflation, aligning prices with risks [5]. - A partnership with Earnix enhances KINS' pricing capabilities and supports its strategic growth initiatives [5]. Future Outlook - KINS expects direct written premium in its core business to grow between 15% and 25% in 2025 [6]. - The company is effectively lowering its net underwriting expense ratio by increasing average premiums and reducing commissions and staffing [6]. - KINS has a robust reinsurance program that protects its balance sheet and has improved its cash balance while reducing debt [6]. Market Performance - KINS shares have gained 18% year to date, outperforming its industry, sector, and the Zacks S&P 500 composite [7]. - KINS was the 15th largest homeowner insurer in New York in 2023, holding a market share of 1.6% [9]. - The company is positioned to benefit from a $200 million market opportunity as competing carriers exit the personal property market in July 2024 [9]. Valuation and Investment Considerations - The average target price for KINS shares is $17, indicating a 9.7% upside potential from the last closing price [10]. - KINS shares are trading at a premium to the industry, with a price-to-book value of 3.36X compared to the industry average of 1.63X [10]. - KINS shares are currently trading below the 50-day moving average, suggesting a short-term bearish trend [10].