Arch Capital Group (ACGL) AI Stock Analysis

• Market Cap: $35.97B
• Dividend Yield: N/A
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.38
• Revenue Growth: 16.68%
• EPS Growth: -28.54%
• Country: US
• Employees: 7,200
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 2.98
• Shares Outstanding: 362,625,950
• 10 Day Avg. Volume: 1,966,394
• 30 Day Avg. Volume: 2,180,593
• PEG Ratio: 2.49
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 1.82
• P/FCF Ratio: 5.78
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.95
• Enterprise Value/Gross Profit: 4.98
• Enterprise Value/Ebitda: 7.01
• 1Y Price Target: $108.71
• Price Target Upside: 9.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 83 Outperform
• Price Target: $114.00 ▲(14.94% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by strong financial performance (scaled revenue, high margins, solid cash generation and balance-sheet strength). Valuation is supportive due to the low P/E, while technicals indicate a steady uptrend. The earnings call was constructive but tempered by competitive rate pressure, some top-line softness, and non-recurring tax/expense benefits that may increase year-to-year volatility.

Positive Factors

Strong underwriting metrics

A full-year combined ratio near 81% demonstrates durable underwriting discipline and loss control across businesses. Sustained low combined ratios support stronger operating margins, reserve adequacy, and the ability to compound book value over cycles, reducing earnings volatility tied to underwriting.

Robust cash generation and capital returns

Consistently high operating cash flow and sizeable buybacks signal durable cash conversion and capital discipline. This cash generation funds share repurchases, strengthens returns on equity, and provides flexibility to deploy capital into underwriting capacity or M&A without undermining the balance sheet.

Strengthened balance sheet and capital base

A materially larger equity base and modest leverage enhance solvency and underwriting capacity. Strong capitalization supports higher peak-zone PML absorption, permits disciplined cycle management, and enables continued premium writings or capital returns while maintaining resilience to catastrophe or reserve shocks.

Negative Factors

Competitive property-cat pricing

Sustained downward price pressure in property catastrophe renewals compresses top-line growth and underwriting margins in one of Arch's capital-intensive businesses. If soft market conditions persist, rate adequacy may lag loss costs, forcing tighter underwriting or reduced capacity that weighs on long-term earnings.

Reinsurance margin pressure

Rising loss ratios and increased ceding commissions structurally erode reinsurance underwriting margins. Persistent margin pressure reduces the cushion from underwriting profit to absorb catastrophes and could require sustained repricing or capital allocation shifts, lowering long-term return on underwriting capital.

Deferred tax asset regulatory uncertainty

Reliance on a sizable deferred tax asset that depends on future Bermuda law creates structural earnings and book-value risk. If recognition is curtailed, the effective tax rate and reported equity could worsen materially, reducing sustainable earnings power and complicating multi-year comparability.

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. The company collects premiums from policyholders, which constitutes a significant portion of its revenue. Additionally, Arch earns investment income from the premiums held in reserve before claims are paid out. This investment income is generated through the management of a diversified investment portfolio, including fixed income securities, equities, and alternative investments. Key revenue streams include property and casualty insurance, mortgage insurance, and reinsurance services for various lines of business. Strategic partnerships with brokers and other insurance entities enhance Arch's market reach and facilitate access to a broader client base, contributing to its overall earnings. Furthermore, the company's prudent risk management practices and focus on specialty lines help maintain profitability even in volatile market conditions.

Arch Capital Group Financial Statement Overview

Summary

Strong, scaled growth and profitability (revenue up sharply to $19.4B by 2025; EBIT margin ~27% in 2024–2025; net margin ~23% in 2025) with a strengthened equity base and manageable leverage. Key offsets are insurance-driven variability (margin swings), a 2025 free-cash-flow slowdown, and some missing/placeholder 2025 ratio fields that reduce recent-period visibility.

Income Statement

Revenue has scaled sharply over time, rising from $8.3B (2020) to $19.4B (2025), with especially strong growth in 2023–2025. Profitability is robust: net margin remains high (roughly 23% in 2025; 25% in 2024) and operating profitability has improved versus earlier years (EBIT margin ~27% in 2024–2025). A key watch item is variability in margins and growth—net margin peaked in 2023 (~33%) then normalized, and reported revenue growth is unusually high in 2025, suggesting potential volatility in the underlying drivers typical for diversified insurers.

Balance Sheet

The capital base has strengthened materially, with equity increasing from ~$13.1B (2020) to ~$24.2B (2025), supporting balance-sheet resilience. Leverage appears modest in the years where it’s provided (debt-to-equity improved from ~0.23 in 2020 to ~0.13–0.15 in 2023–2024), while total debt has been relatively stable around $2.7–$3.0B. Total assets expanded overall, though assets dipped in 2025 vs. 2024, which bears monitoring. Some 2025 leverage/return fields are shown as 0.0, limiting year-specific ratio confirmation for the most recent period.

Cash Flow

Cash generation is strong: operating cash flow rose from ~$2.9B (2020) to ~$6.2B (2025), and free cash flow is consistently high and close to operating cash flow (suggesting limited drag from capital spending). Free cash flow has generally tracked net income closely (around ~0.99x in 2021–2024), indicating solid earnings quality. The main weakness is volatility: free cash flow growth turned negative in 2025 after strong gains in prior years, and several coverage fields are reported as 0.0 in multiple periods, which restricts consistency checks.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.43B	16.93B	13.29B	9.66B	8.92B
Gross Profit	10.05B	5.94B	4.74B	2.89B	3.04B
EBITDA	5.50B	4.85B	3.61B	1.72B	2.32B
Net Income	4.40B	4.31B	4.44B	1.48B	2.16B
Balance Sheet
Total Assets	67.06B	70.91B	58.91B	47.99B	45.10B
Cash, Cash Equivalents and Short-Term Investments	993.00M	9.31B	8.05B	6.50B	7.14B
Total Debt	2.73B	2.73B	2.73B	2.73B	2.72B
Total Liabilities	42.85B	50.09B	40.55B	35.07B	31.55B
Stockholders Equity	24.21B	20.82B	18.35B	12.91B	13.55B
Cash Flow
Free Cash Flow	6.13B	6.62B	5.70B	3.76B	3.39B
Operating Cash Flow	6.17B	6.67B	5.75B	3.82B	3.43B
Investing Cash Flow	-4.04B	-4.46B	-5.47B	-3.10B	-2.14B
Financing Cash Flow	-1.89B	-1.93B	-69.00M	-706.00M	-1.23B

Arch Capital Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 99.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 99.18 is above the 20-day moving average (MA) of 97.92, above the 50-day MA of 95.80, and above the 200-day MA of 91.89, indicating a bullish trend. The MACD of 1.12 indicates Positive momentum. The RSI at 58.07 is Neutral, neither overbought nor oversold. The STOCH value of 62.32 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
ACGL	83 Outperform	$35.97B	8.54	19.54%	―	16.68%	-28.54%
HIG	79 Outperform	$38.77B	10.55	21.66%	1.55%	7.11%	22.52%
ORI	78 Outperform	$10.39B	11.19	16.22%	6.98%	7.08%	-4.36%
PFG	73 Outperform	$20.57B	17.65	10.32%	3.44%	12.33%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AIG	67 Neutral	$42.84B	14.73	7.40%	2.02%	-23.02%	52.43%
EQH	45 Neutral	$11.78B	-8.52	-182.66%	2.15%	7.70%	-155.12%

Arch Capital Group Corporate Events

Arch Capital Announces Planned Board Transition for 2026

On January 15, 2026, Arch Capital Group Ltd. announced that longtime director John D. Vollaro, who has served on its board for 17 years and has been with the company for 24 years, will not stand for reelection at the company’s 2026 annual meeting of shareholders. The company emphasized that Vollaro’s decision is not due to any disagreement over its operations, policies or practices, suggesting an orderly and non-contentious board transition for stakeholders.

The most recent analyst rating on (ACGL) stock is a Buy with a $113.00 price target. To see the full list of analyst forecasts on Arch Capital Group stock, see the ACGL Stock Forecast page.