Arch Capital Group (ACGL) AI Stock Analysis

• Market Cap: $35.30B
• Dividend Yield: N/A
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.39
• Revenue Growth: 25.29%
• EPS Growth: -23.19%
• Country: US
• Employees: 7,200
• Sector: Financial
• Sector Strength: 82
• Industry: Insurance - Diversified
• EPS (TTM): 1.54
• Shares Outstanding: 374,754,520
• 10 Day Avg. Volume: 1,428,789
• 30 Day Avg. Volume: 1,577,438
• PEG Ratio: -0.75
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.43
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 2.12
• Enterprise Value/Ebitda: 2.13
• 1Y Price Target: $111.00
• Price Target Upside: 19.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 78 Outperform
• Price Target: $106.00 ▲( 14.16% Upside)

Arch Capital Group's overall stock score is driven by strong financial performance and attractive valuation, offset by neutral technical indicators. Liquidity concerns and economic uncertainty present risks, but the company's solid market position provides a strong foundation for growth.

Positive Factors

Earnings Growth

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

Underwriting Performance

Reinsurance segment showed strong underwriting, with a core combined ratio of 74.8% vs consensus of 76.1%.

Negative Factors

Market Competition

ACGL traded down on the weaker premium growth and its view on the market becoming more competitive.

Premium Growth

Total company gross written premiums of $4,756 million came in well below consensus of $5,046 million.

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 makes money primarily through its diverse portfolio of insurance and reinsurance products. The company collects premiums from policyholders in exchange for providing coverage against potential losses. In the insurance sector, revenue is generated through underwriting profits, where premiums collected exceed the claims paid out. In the reinsurance sector, Arch Capital earns money by providing risk management solutions to other insurers, receiving premiums in return for taking on some of their risk exposures. The mortgage insurance segment contributes to revenue by offering private mortgage insurance to lenders, protecting them against borrower defaults. Additionally, Arch Capital leverages its investment portfolio, earning income through interest, dividends, and capital gains from its investment operations. Key partnerships with brokers and agents across the globe also play a significant role in expanding their distribution network and enhancing 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 income statement scores high due to significant revenue growth and strong profitability margins. The balance sheet is solid with low leverage and a strong capital position, but concerns about declining cash reserves affect its score. Cash flow is strong with positive operating cash flow trends, despite negative investing cash flow. Overall, liquidity management needs attention to sustain growth.

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
17.74B	17.44B	13.63B	9.60B	8.93B	8.29B
	Gross Profit
17.42B	17.20B	12.24B	8.37B	7.84B	7.35B
	EBIT
7.90B	4.47B	13.54B	1.69B	2.25B	1.47B
	EBITDA
4.03B	4.85B	3.33B	1.61B	1.96B	1.77B
	Net Income Common Stockholders
3.77B	4.31B	4.44B	1.48B	2.16B	1.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.19B	979.00M	8.03B	21.87B	22.40B	21.55B
	Total Assets
75.18B	70.91B	58.91B	47.99B	45.10B	43.28B
	Total Debt
2.73B	2.73B	2.73B	2.73B	2.72B	3.02B
	Net Debt
1.54B	1.75B	1.81B	1.87B	1.87B	2.11B
	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: 92.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 Negative. The current price of 92.85 is above the 20-day moving average (MA) of 92.79, above the 50-day MA of 92.70, and below the 200-day MA of 96.25, indicating a neutral trend. The MACD of 0.48 indicates Negative momentum. The RSI at 49.71 is Neutral, neither overbought nor oversold. The STOCH value of 65.76 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	83 Outperform	$37.28B	13.08	18.49%	1.51%	7.55%	14.16%
ACGL	78 Outperform	$35.30B	9.52	18.42%	―	25.29%	-23.19%
ORI	75 Outperform	$9.49B	12.54	12.68%	2.83%	10.83%	20.74%
PFG	73 Outperform	$18.05B	17.26	9.70%	3.61%	5.84%	-10.64%
EQH	71 Outperform	$16.32B	14.60	56.67%	1.79%	12.41%	14.76%
Sector *	64 Neutral	$12.78B	9.87	7.67%	17015.06%	12.34%	-5.99%
AIG	61 Neutral	$48.46B	18.79	6.13%	1.90%	-44.30%	-33.09%

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.