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Arch Capital Group
(NASDAQ:ACGL)
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Rating:76Outperform
Price Target:
$111.00
â–²(13.74% Upside)
Action:Reiterated
Date:06/04/26
The score is driven primarily by strong financial performance (high profitability, low leverage, strong ROE and sizable free cash flow) and attractive valuation (low P/E). These positives are tempered by weak technicals (price below key moving averages with negative MACD) and earnings-call headwinds around competitive pricing, premium growth pressure, and catastrophe/man-made loss uncertainty.
Positive Factors
Conservative balance sheet / low leverage
Very low debt-to-equity (~0.11) and materially grown equity provide durable capital flexibility for an insurer: supports regulatory buffers, ability to pay claims after large events, and capacity to deploy capital into underwriting or buybacks without forcing asset sales, reducing long-term funding risk.
Negative Factors
Top-line pressure and nonrenewals
Deliberate non-renewals and softer net premiums (roughly $250M headwind) imply constrained organic growth. Over the medium term this can limit scale benefits, revenue momentum and underwriting leverage, requiring management to replace business selectively at acceptable returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet / low leverage
Very low debt-to-equity (~0.11) and materially grown equity provide durable capital flexibility for an insurer: supports regulatory buffers, ability to pay claims after large events, and capacity to deploy capital into underwriting or buybacks without forcing asset sales, reducing long-term funding risk.
Read all positive factors
Arch Capital Group Key Performance Indicators (KPIs)
Any
Gross Premiums Written by Segment
Captures the total premiums from all policies issued before deductions, offering a view of the company's overall sales volume and market reach.
Captures the total premiums from all policies issued before deductions, offering a view of the company's overall sales volume and market reach.
Data provided by:
The Fly
The FlyArch Capital Group (ACGL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$35.71B
Dividend YieldN/A
Average Volume (3M)2.56M
Price to Earnings (P/E)7.7
Beta (1Y)0.36
Revenue Growth8.66%
EPS Growth32.96%
CountryUS
Employees8,000
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)13.21
Shares Outstanding349,389,600
10 Day Avg. Volume2,559,790
30 Day Avg. Volume2,560,508
Financial Highlights & Ratios
PEG Ratio2.51
Price to Book (P/B)1.46
Price to Sales (P/S)1.78
P/FCF Ratio5.78
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue1.73
Enterprise Value/Gross Profit4.04
Enterprise Value/Ebitda5.88
Forecast
1Y Price Target
$109.04Price Target Upside11.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)9.3
Revenue Forecast (FY)$17.07B
Arch Capital Group Business Overview & Revenue Model
Company Description
Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products in the United States, Canada, Bermuda, the United Kingdom, Europe, and Australia. The company operates through three segments...
How the Company Makes Money
Arch Capital Group primarily makes money through (1) underwriting income and (2) investment income generated from investing its insurance and reinsurance float, with additional income from fees and other insurance-related revenues where applicable...
Arch Capital Group Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call conveyed solid operational and financial results — strong underwriting income across all three segments, favorable prior-year development, investment contributions, book value growth, and significant share repurchases. At the same time, management was candid about increased market competitiveness, rate erosion in property lines, elevated operating expenses tied to strategic integrations, and ongoing man-made catastrophe exposure (Iran conflict) that could affect near-term results. Overall, Arch presented a confident and disciplined stance: profitable performance and active capital deployment balanced against cautious underwriting posture and clear awareness of near-term headwinds.Positive Updates
Strong Quarterly Operating Income and EPS
After-tax operating income of $901 million, or $2.50 per share for 1Q 2026. Management reported an annualized net income return on average common equity of 17.8% (Nicolas) and an annualized operating income return on average common equity of 15.4% (François), reflecting strong profitability.
Negative Updates
Expense and Acquisition Cost Pressures
Acquisition expense ratio for the current accident year increased ~160 basis points (roll-off of prior DAC write-off benefit). Operating expense ratio was elevated due to transition costs related to middle-market system migration and investments in staffing and technology; expected to normalize later in the year.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Quarterly Operating Income and EPS
After-tax operating income of $901 million, or $2.50 per share for 1Q 2026. Management reported an annualized net income return on average common equity of 17.8% (Nicolas) and an annualized operating income return on average common equity of 15.4% (François), reflecting strong profitability.
Read all positive updates
Company Guidance
Management's near‑term guidance emphasized profitability and capital discipline: after‑tax operating income was $901M ($2.50/share) with an annualized operating‑income ROAE of 15.4% (management also cited a 17.8% net‑income ROAE), book value per share rose 1.7%, and the Board increased the buyback authorization after the company repurchased $783M (8.3M shares) in the quarter (plus an additional $311M subsequently); segment underwriting income was $66M (Insurance), $441M (Reinsurance) and $221M (Mortgage) while investments contributed $408M of net investment income ($1.13/share) and total investment-related income was $568M ($1.57/share pretax); key portfolio and reserve metrics included an overall ex‑cat accident‑year combined ratio of 82.3% (up 130 bps YoY), the Reinsurance group’s 76% combined ratio (fourth straight quarter sub‑80%), $200M of favorable prior‑year development (pretax, ~5 points), $174M of current‑year catastrophe losses (net), mortgage delinquency of 2.06%, peak‑zone 1‑in‑250 PML net of $1.9B (8.2% of tangible shareholders’ equity), and an effective tax rate of 14.8% (below the prior 16–18% guidance due to a 1.7% discrete benefit); management also said they expect the insurance operating expense ratio to normalize closer to historical levels in H2, that certain non‑renewals will reduce net premium revenue by roughly $250M through 2026, and that the 6/1 renewals are likely to remain competitive.Arch Capital Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.70B | 19.93B | 17.44B | 13.29B | 9.66B | 8.92B |
| Gross Profit | 8.44B | 7.41B | 6.45B | 4.74B | 2.89B | 3.04B |
| EBITDA | 5.80B | 5.35B | 4.85B | 3.61B | 1.72B | 2.32B |
| Net Income | 4.87B | 4.40B | 4.31B | 4.44B | 1.48B | 2.16B |
Balance Sheet | ||||||
| Total Assets | 81.45B | 67.06B | 70.91B | 58.91B | 47.99B | 45.10B |
| Cash, Cash Equivalents and Short-Term Investments | 12.18B | 11.54B | 9.31B | 8.05B | 6.50B | 7.14B |
| Total Debt | 2.73B | 2.73B | 2.73B | 2.73B | 2.73B | 2.72B |
| Total Liabilities | 57.26B | 42.85B | 50.09B | 40.55B | 35.07B | 31.55B |
| Stockholders Equity | 24.19B | 24.21B | 20.82B | 18.35B | 12.91B | 13.55B |
Cash Flow | ||||||
| Free Cash Flow | 5.86B | 6.13B | 6.62B | 5.70B | 3.76B | 3.39B |
| Operating Cash Flow | 5.90B | 6.17B | 6.67B | 5.75B | 3.82B | 3.43B |
| Investing Cash Flow | -3.67B | -4.04B | -4.46B | -5.47B | -3.10B | -2.14B |
| Financing Cash Flow | -2.48B | -1.89B | -1.93B | -69.00M | -706.00M | -1.23B |
Arch Capital Group Technical Analysis
Positive
97.59
Price Trends
93.75
Positive
95.24
Positive
93.62
Positive
Market Momentum
1.73
Negative
73.49
Negative
90.26
Negative
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 97.59 is above the 20-day moving average (MA) of 93.48, above the 50-day MA of 93.75, and above the 200-day MA of 93.62, indicating a bullish trend. The MACD of 1.73 indicates Negative momentum. The RSI at 73.49 is Negative, neither overbought nor oversold. The STOCH value of 90.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACGL.
Arch Capital Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $37.79B | 9.55 | 22.01% | 1.55% | 6.90% | 41.67% | |
77 Outperform | $10.20B | 10.02 | 16.72% | 6.98% | 13.12% | 33.46% | |
76 Outperform | $35.71B | 7.74 | 20.48% | ― | 8.66% | 32.96% | |
73 Outperform | $23.95B | 15.82 | 13.25% | 3.44% | -1.98% | 48.93% | |
70 Outperform | $42.09B | 13.88 | 7.70% | 2.02% | -2.31% | 26.43% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $12.45B | -16.23 | -219.79% | 2.15% | -19.35% | -175.55% |
* Financial Sector Average
ACGL
Arch Capital Group
102.20
13.01
14.59%
AIG
American International Group
79.39
-1.85
-2.28%
HIG
Hartford Insurance
137.85
15.01
12.22%
ORI
Old Republic International
41.87
7.03
20.20%
PFG
Principal Financial
110.87
32.74
41.91%
EQH
Equitable Holdings
45.61
-8.66
-15.95%
Arch Capital Group Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Arch Capital Expands Senior Notes Cash Tender Offers
Neutral
Jun 16, 2026
On June 15, 2026, Arch Capital Group announced early results of cash tender offers by its U.S. subsidiaries for their 5.144% senior notes due 2043 and 5.031% senior notes due 2046, and raised the aggregate cap on repurchases to $417.9 million. By ...
Private Placements and Financing
Arch Capital Group Completes $2 Billion Debt Offering
Neutral
Jun 9, 2026
On June 9, 2026, Arch Capital Group Ltd. completed a $2.0 billion public debt offering, issuing $600 million of 5.250% senior notes due 2036 and $1.4 billion of 5.950% senior notes due 2056 under its existing shelf registration. The senior unsecur...
Business Operations and StrategyExecutive/Board Changes
Arch Capital Group Restructures Leadership Under Single President
Neutral
Jun 3, 2026
Arch Capital Group Ltd., listed on Nasdaq and part of the SP 500, is a Bermuda-based provider of insurance, reinsurance and mortgage insurance through its subsidiaries, with approximately $26.9 billion in capital as of March 31, 2026. The company ...
Business Operations and StrategyPrivate Placements and Financing
Arch Capital Group Prices $2 Billion Senior Notes Offering
Positive
Jun 3, 2026
On June 2, 2026, Arch Capital Group Ltd. priced a $2.0 billion public offering of senior notes, comprising $600 million of 5.250% notes due 2036 and $1.4 billion of 5.950% notes due 2056, with closing expected on June 9, 2026. The deal was led by ...
Business Operations and StrategyPrivate Placements and Financing
Arch Capital Launches $350 Million Debt Tender Offers
Positive
Jun 2, 2026
On June 2, 2026, Arch Capital Group said its U.S. subsidiaries Arch Capital Group (U.S.) Inc. and Arch Capital Finance LLC launched cash tender offers to buy back portions of their outstanding 5.144% senior notes due 2043 and 5.031% senior notes d...
Executive/Board ChangesDividendsShareholder Meetings
Arch Capital Declares Preferred Dividends After Shareholder Meeting
Positive
May 7, 2026
Arch Capital Group Ltd. reported that its annual meeting of shareholders on May 5, 2026, achieved about 87% participation of eligible common shares, with shareholders re-electing three Class I directors, approving executive compensation on an advi...
Business Operations and StrategyStock Buyback
Arch Capital Expands Share Repurchase Authorization by $3 Billion
Positive
Apr 20, 2026
On April 19, 2026, Arch Capital Group Ltd. expanded its existing share repurchase authorization by an additional $3.0 billion, allowing purchases in both open market and privately negotiated transactions. After accounting for recent buybacks, the ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.