Universal Insurance Holdings (UVE) Earnings Expected to Grow: Should You Buy?

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Universal Insurance Holdings (UVE) despite lower revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Universal Insurance is expected to report quarterly earnings of $1.30 per share, reflecting a significant year-over-year increase of +420% [3]. - Revenues are projected to be $372.99 million, which is a decrease of 3.1% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - The Most Accurate Estimate for Universal Insurance matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likelihood of actual earnings deviating from consensus estimates, with a positive ESP being a strong predictor of an earnings beat [8][9]. - Universal Insurance's current Zacks Rank is 3 (Hold), which complicates the prediction of an earnings beat [11][12]. Historical Performance - In the last reported quarter, Universal Insurance exceeded the expected earnings of $1.1 per share by delivering $1.36, resulting in a surprise of +23.64% [13]. - The company has successfully beaten consensus EPS estimates in each of the last four quarters [14]. Market Sentiment - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment [15]. - Despite not appearing as a compelling earnings-beat candidate, other factors should be considered when evaluating the stock ahead of its earnings release [17]. Industry Comparison - Skyward Specialty Insurance (SKWD), another player in the property and casualty insurance sector, is expected to report earnings of $0.93 per share, reflecting a year-over-year increase of +16.3% [18]. - Skyward's revenues are anticipated to be $374 million, up 22.9% from the previous year, with a positive Earnings ESP of +0.86% indicating a likely earnings beat [19][20].