Palomar Q1 Earnings Top Estimates on Higher Net Investment Income

Core Insights - Palomar Holdings Inc. (PLMR) reported a first-quarter 2025 operating income of $1.87 per share, exceeding the Zacks Consensus Estimate by 17.6% and reflecting a year-over-year increase of 71.5% [1] - Total revenues rose 52.6% year over year to $177 million, driven by higher premiums and net investment income, surpassing the Zacks Consensus Estimate by 2.9% [1] Revenue and Premiums - Gross written premiums increased 20.1% year over year to $442.1 million, while net earned premiums rose 52.1% year over year to $164 million, exceeding estimates [2] - Net investment income surged 69.1% year over year to $12.1 million, driven by higher yields and a larger average balance of investments [3] Underwriting Performance - Underwriting income reached $44 million, up 76.5% year over year, with adjusted underwriting income nearly at $51.6 million, reflecting a 77% increase [4] - Total expenses increased 43.6% year over year to $120.9 million, influenced by higher loss and acquisition expenses [4] Loss Ratios and Combined Ratios - The loss ratio improved by 130 basis points year over year to 23.6, better than estimates, while the adjusted combined ratio improved 90 basis points to 68.9 [5] Financial Position - Cash and cash equivalents increased 48.3% from the end of 2024 to $119.3 million, and shareholder equity rose 8.4% to $790.4 million [6] - The annualized adjusted return on equity for the first quarter of 2025 was 27%, up 410 basis points year over year [6] Future Outlook - Palomar Holdings revised its adjusted net income outlook for 2025 to a range of $186 million to $200 million, up from the previous estimate of $180 million to $192 million [7] Zacks Rank - PLMR currently holds a Zacks Rank 2 (Buy), indicating a favorable investment outlook [8]