Arch Capital Group (ACGL) AI Stock Analysis

• Market Cap: $34.08B
• Dividend Yield: N/A
• Average Volume (3M): 2.17M
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.42
• Revenue Growth: 23.79%
• EPS Growth: -32.09%
• Country: US
• Employees: 7,200
• Sector: Financial
• Sector Strength: 77
• Industry: Insurance - Diversified
• EPS (TTM): 2.58
• Shares Outstanding: 373,220,300
• 10 Day Avg. Volume: 1,627,899
• 30 Day Avg. Volume: 2,174,881
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 1.98
• Enterprise Value/Gross Profit: 2.87
• Enterprise Value/Ebitda: 8.88
• 1Y Price Target: $108.31
• Price Target Upside: 17.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 79 Outperform
• Price Target: $104.00 ▲(12.77% Upside)

Arch Capital Group's overall stock score reflects its strong financial performance, positive technical indicators, and attractive valuation. The earnings call further supports a positive outlook, despite some competitive pressures in specific segments.

Positive Factors

Long-term Growth

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

Market Positioning

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.

Growth Expectations

Analyst downgrades ACGL to Hold due to expectations of softer growth and compressed returns in the mid-year.

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 through several key channels, primarily by underwriting insurance and reinsurance policies. The company earns premiums from clients in exchange for coverage against various risks, including property damage, liability, and other exposures. Additionally, Arch's mortgage insurance segment provides coverage to lenders against borrower defaults, generating further premium income. The company also invests the capital it holds, earning investment income from interest, dividends, and capital gains on its investment portfolio. Strategic partnerships with brokers and agents enhance its distribution capabilities, while its strong market presence and diversified risk portfolio contribute to its overall profitability. Arch Capital's ability to accurately assess risk and manage claims effectively is critical to maintaining its earnings and financial stability.

Arch Capital Group Financial Statement Overview

Summary

Arch Capital Group maintains a strong financial position with robust revenue growth and efficient operational management. However, pressures on net profit margins and a decrease in free cash flow growth slightly temper the overall financial performance.

Income Statement

Arch Capital Group demonstrates strong revenue growth with a 6.35% increase in TTM, supported by a solid gross profit margin of 69.07%. However, the net profit margin has decreased from 25.47% in the previous year to 19.38% in TTM, indicating some pressure on profitability. The EBIT margin is stable at 21.06%, reflecting efficient operational management.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.12, indicating prudent financial leverage. The return on equity is strong at 17.03%, although it has decreased from 20.71% in the previous year, suggesting a slight decline in profitability. The equity ratio remains healthy, supporting financial stability.

Cash Flow

Arch Capital Group's cash flow performance shows a decrease in free cash flow growth by 6.06% in TTM, which could be a concern. However, the free cash flow to net income ratio remains high at 99.25%, indicating effective cash generation relative to earnings. The operating cash flow to net income ratio is not available, which limits a full assessment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.27B	16.93B	13.29B	9.66B	8.92B	8.29B
Gross Profit	13.31B	5.94B	4.74B	2.89B	3.04B	2.60B
EBITDA	4.29B	4.85B	3.61B	1.72B	2.32B	1.77B
Net Income	3.73B	4.31B	4.44B	1.48B	2.16B	1.41B
Balance Sheet
Total Assets	78.79B	70.91B	58.91B	47.99B	45.10B	43.28B
Cash, Cash Equivalents and Short-Term Investments	983.00M	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	55.75B	50.09B	40.55B	35.07B	31.55B	29.29B
Stockholders Equity	23.04B	20.82B	18.35B	12.91B	13.55B	13.11B
Cash Flow
Free Cash Flow	6.13B	6.62B	5.70B	3.76B	3.39B	2.85B
Operating Cash Flow	6.17B	6.67B	5.75B	3.82B	3.43B	2.89B
Investing Cash Flow	-3.78B	-4.46B	-5.47B	-3.10B	-2.14B	-3.04B
Financing Cash Flow	-2.27B	-1.93B	-69.00M	-706.00M	-1.23B	521.28M

Arch Capital Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 92.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACGL, the sentiment is Positive. The current price of 92.22 is above the 20-day moving average (MA) of 91.03, above the 50-day MA of 89.64, and above the 200-day MA of 92.17, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 58.97 is Neutral, neither overbought nor oversold. The STOCH value of 37.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACGL.

Arch Capital Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HIG	80 Outperform	$37.09B	11.96	19.55%	1.54%	7.67%	15.99%
ACGL	79 Outperform	$34.08B	9.60	17.09%	―	23.79%	-32.09%
ORI	76 Outperform	$9.94B	11.33	14.63%	7.71%	14.20%	50.32%
AIG	75 Outperform	$44.90B	15.02	7.61%	2.02%	-33.87%	-5.72%
PFG	73 Outperform	$17.81B	16.10	10.16%	3.71%	-3.34%	-3.32%
EQH	71 Outperform	$15.80B	42.55	34.30%	1.93%	5.05%	-47.26%
Sector *	68 Neutral	$17.88B	11.66	10.24%	3.76%	9.66%	1.70%

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.