Arch Capital Group (ACGL) AI Stock Analysis

• Market Cap: $34.29B
• Dividend Yield: N/A
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.43
• Revenue Growth: 25.29%
• EPS Growth: -23.19%
• Country: US
• Employees: 7,200
• Sector: Financial
• Sector Strength: 81
• Industry: Insurance - Diversified
• EPS (TTM): 1.54
• Shares Outstanding: 374,754,520
• 10 Day Avg. Volume: 1,930,721
• 30 Day Avg. Volume: 1,587,459
• PEG Ratio: -0.73
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.23
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 0.54
• Enterprise Value/Gross Profit: 6.32
• Enterprise Value/Ebitda: 1.88
• 1Y Price Target: $110.55
• Price Target Upside: 25.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 73 Outperform
• Price Target: $103.00 ▲(16.54%Upside)

Arch Capital Group's overall stock score reflects its strong financial performance and attractive valuation, despite mixed technical indicators. The company's robust earnings and strategic management are significant positives, while liquidity concerns and economic uncertainties are areas to watch.

Positive Factors

Earnings and Growth Potential

The company is well positioned for long term earnings and book value growth.

Underwriting and Market Position

Opportunities exist given the hard market lasted longer than expected, allowing Arch Capital to favorably position itself throughout various cycles.

Negative Factors

Competitive Pressures

Intensifying competitive dynamics in P-CAT and Specialty sectors contribute to lower growth estimates.

Premium Growth Challenges

Increased capacity in the reinsurance market pressures pricing, impacting premium growth.

Arch Capital Group Business Overview & Revenue Model

Company Description

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; collateral protection, debt cancellation, and service contract reimbursement products; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; and contract and commercial surety coverages. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability and workers' compensation exposures; marine and aviation; surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was incorporated in 1995 and is based in Pembroke, Bermuda.

How the Company Makes Money

Arch Capital Group generates revenue primarily through the underwriting of insurance and reinsurance policies and the collection of premiums from these policies. The company's Insurance segment earns money by underwriting policies in various lines, such as professional liability, accident, health, and marine, while its Reinsurance segment generates income by offering coverage to other insurance companies, thus diversifying their risk portfolios. The Mortgage segment's revenue comes from providing private mortgage insurance to lenders, which helps them manage risk and enables borrowers to purchase homes with lower down payments. Investment income from the company's investment portfolio, which includes fixed income securities and other financial assets, also contributes significantly to Arch Capital's earnings. Strategic partnerships with insurance brokers and agents, as well as strong client relationships, help facilitate the distribution of their products, further enhancing their revenue streams.

Arch Capital Group Financial Statement Overview

Summary

Arch Capital Group demonstrates a robust financial profile with strong revenue growth and high profitability margins. The company's prudent leverage management is commendable, although there are concerns regarding liquidity due to declining cash reserves.

Income Statement

Arch Capital Group shows strong income statement metrics with a consistent increase in total revenue from $8.29B in 2020 to $17.80B TTM. The gross profit margin remains robust above 95% TTM, indicating efficient cost management. The net profit margin improved to 21.16% TTM, reflecting enhanced profitability. Revenue growth has been significant, especially from 2022 to 2024, reinforcing a positive trajectory. However, EBIT and EBITDA margins fluctuated, suggesting potential volatility in operating efficiency.

Balance Sheet

The balance sheet is solid with a reasonable debt-to-equity ratio of 0.13 TTM, indicating a conservative leverage approach. The equity ratio of 28.66% TTM suggests a strong capital position. Return on equity is satisfactory at 17.48% TTM, demonstrating effective use of equity to generate earnings. Despite the overall stability, the declining cash reserves from 2020 to TTM raise concerns about liquidity management.

Cash Flow

The cash flow statement highlights a positive trend in operating cash flow, rising to $6.57B TTM. The free cash flow growth rate has been commendable, with stable free cash flow levels over time. The operating cash flow to net income ratio of 1.74 TTM indicates strong cash generation relative to earnings. However, the consistent negative investing cash flow and fluctuations in financing cash flow could suggest strategic investments and financing adjustments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.64B	16.93B	13.29B	9.66B	8.92B	8.29B
Gross Profit	5.63B	5.94B	4.74B	2.89B	3.04B	2.60B
EBITDA	4.39B	4.85B	3.61B	1.72B	2.32B	1.77B
Net Income	3.77B	4.31B	4.44B	1.48B	2.16B	1.41B
Balance Sheet
Total Assets	75.18B	70.91B	58.91B	47.99B	45.10B	43.28B
Cash, Cash Equivalents and Short-Term Investments	1.19B	979.00M	8.03B	21.87B	22.40B	21.55B
Total Debt	2.73B	2.73B	2.73B	2.73B	2.72B	3.02B
Total Liabilities	53.63B	50.09B	40.55B	35.07B	31.55B	29.29B
Stockholders Equity	21.55B	20.82B	18.35B	12.91B	13.55B	13.11B
Cash Flow
Free Cash Flow	6.52B	6.62B	5.70B	3.76B	3.39B	2.85B
Operating Cash Flow	6.57B	6.67B	5.75B	3.82B	3.43B	2.89B
Investing Cash Flow	-4.06B	-4.46B	-5.47B	-3.10B	-2.14B	-3.04B
Financing Cash Flow	-2.12B	-1.93B	-69.00M	-706.00M	-1.23B	521.28M

Arch Capital Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 88.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACGL, the sentiment is Negative. The current price of 88.38 is below the 20-day moving average (MA) of 91.19, below the 50-day MA of 92.36, and below the 200-day MA of 95.05, indicating a bearish trend. The MACD of -0.80 indicates Positive momentum. The RSI at 39.26 is Neutral, neither overbought nor oversold. The STOCH value of 59.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACGL.

Arch Capital Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HIG	78 Outperform	$35.97B	12.62	18.49%	1.64%	7.55%	14.16%
PFG	75 Outperform	$18.12B	17.33	9.70%	3.76%	5.84%	-10.64%
ORI	75 Outperform	$9.49B	12.54	12.68%	2.89%	10.83%	20.74%
ACGL	73 Outperform	$34.29B	9.06	18.42%	―	25.29%	-23.19%
EQH	71 Outperform	$16.98B	15.19	56.67%	1.93%	12.41%	14.76%
AIG	68 Neutral	$49.49B	19.19	6.13%	2.10%	-44.30%	-33.09%
Sector *	67 Neutral	$16.86B	11.64	9.71%	3.83%	11.61%	-9.60%

Arch Capital Group Corporate Events

Arch Capital Group Holds Annual Shareholders Meeting

Arch Capital Group Ltd. held its annual meeting of shareholders on May 7, 2025, where approximately 90% of outstanding shares were represented. Key decisions included the election of four Class III directors, approval of executive compensation, and ratification of PricewaterhouseCoopers LLP as the independent auditor. Additionally, the board declared dividends for Series F and Series G preferred shares, payable on June 30 and September 30, 2025, respectively.