Is a Beat in the Cards for Palomar This Earnings Season?

Core Viewpoint - Palomar Holdings (PLMR) is anticipated to show significant growth in both revenue and earnings for the first quarter of 2025, with a revenue estimate of $171.2 million, reflecting a 48.7% year-over-year increase, and an earnings estimate of $1.59 per share, indicating a 45.9% increase from the previous year [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for PLMR's first-quarter revenues is $171.2 million, which is a 48.7% increase from the same quarter last year [1]. - The consensus estimate for earnings per share is $1.59, suggesting a year-over-year increase of 45.9% [2]. Earnings Prediction Model - The earnings prediction model indicates a likely earnings beat for PLMR, supported by a positive Earnings ESP of +6.29% and a Zacks Rank of 2 (Buy) [2][3]. Factors Influencing Q1 Results - PLMR's earnings are expected to benefit from a fee-based revenue stream, increased policy volume, strong retention rates, and strategic product expansion [4]. - The company's focus on the crop business and the Residential Earthquake business is likely to have positively impacted performance [5]. Premium and Investment Income - The Zacks Consensus Estimate for premiums earned is $160 million, with an internal estimate of $161.7 million [5]. - Investment income is projected to rise due to high-quality fixed income securities and increased fixed-income yields, with a consensus estimate of $11.3 million [6]. Combined Ratio and Expenses - The combined ratio is estimated at 75, with an internal estimate of 76.9, indicating improved performance due to a reinsurance policy limiting catastrophe losses [7]. - Total expenses are expected to rise to $124.9 million, driven by higher losses and other underwriting expenses [8].