Arch Capital Group (ACGL) AI Stock Analysis

• Market Cap: $34.23B
• Dividend Yield: N/A
• Average Volume (3M): 2.37M
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.33
• Revenue Growth: 16.68%
• EPS Growth: -28.54%
• Country: US
• Employees: 7,200
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 2.77
• Shares Outstanding: 362,625,950
• 10 Day Avg. Volume: 1,852,165
• 30 Day Avg. Volume: 2,371,476
• PEG Ratio: -2.03
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 2.03
• P/FCF Ratio: 5.19
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: 1.98
• Enterprise Value/Gross Profit: 5.82
• Enterprise Value/Ebitda: 7.66
• 1Y Price Target: $106.18
• Price Target Upside: 12.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 9.13
• Revenue Forecast (FY): $18.00B

• Rating: 79 Outperform
• Price Target: $100.00 ▲(5.93% Upside)

Arch Capital Group's strong financial performance and record earnings, as highlighted in the latest earnings call, are the most significant factors driving the score. The company's low P/E ratio suggests it may be undervalued. However, technical indicators show potential bearish momentum, and the lack of a dividend yield may deter income-focused investors.

Positive Factors

Strong Financial Performance

Record earnings and strong returns on equity indicate robust financial health and effective management, supporting long-term growth prospects.

Robust Investment Income

High investment income enhances financial stability and provides additional capital for strategic initiatives, bolstering long-term profitability.

Improved Combined Ratio

A low combined ratio signifies strong underwriting performance, indicating effective risk management and operational efficiency, crucial for sustained profitability.

Negative Factors

Reinsurance Premium Decline

Declining reinsurance premiums can pressure revenue growth and profitability, challenging the company's ability to maintain its market position.

Market Competition Increasing

Rising competition and weaker pricing can erode market share and margins, potentially impacting long-term growth and profitability.

Impact of Remediation Efforts

Remediation efforts leading to non-renewals can reduce premium income, affecting revenue streams and potentially hindering growth in the insurance segment.

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

Arch Capital Group exhibits strong financial health with consistent revenue growth, solid profitability, and a stable balance sheet. The company effectively manages its debt levels and generates healthy returns on equity. While cash flow metrics are generally positive, some operational efficiency metrics show room for improvement.

Income Statement

Arch Capital Group demonstrates strong revenue growth with a TTM revenue increase of 3.39% and consistent profitability, as indicated by a solid net profit margin of 21.35% and a gross profit margin of 49.74%. However, the EBIT and EBITDA margins have slightly decreased compared to the previous year, indicating some pressure on operational efficiency.

Balance Sheet

The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.115, suggesting prudent financial leverage. The return on equity is strong at 18.38%, reflecting effective use of shareholder funds. The equity ratio is healthy, indicating a stable capital structure.

Cash Flow

Arch Capital Group shows a positive trend in cash flow with a free cash flow growth rate of 2.74% in the TTM period. The free cash flow to net income ratio is nearly 1, indicating efficient conversion of profits into cash. However, the operating cash flow to net income ratio is not available, which limits a full assessment of cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.05B	16.93B	13.29B	9.66B	8.92B	8.29B
Gross Profit	6.47B	5.94B	4.74B	2.89B	3.04B	2.60B
EBITDA	4.92B	4.85B	3.61B	1.72B	2.32B	1.77B
Net Income	4.10B	4.31B	4.44B	1.48B	2.16B	1.41B
Balance Sheet
Total Assets	79.19B	70.91B	58.91B	47.99B	45.10B	43.28B
Cash, Cash Equivalents and Short-Term Investments	11.17B	9.24B	8.03B	6.50B	22.40B	22.11B
Total Debt	2.73B	2.73B	2.73B	2.73B	2.72B	3.02B
Total Liabilities	55.47B	50.09B	40.55B	35.07B	31.55B	29.29B
Stockholders Equity	23.72B	20.82B	18.35B	12.91B	13.55B	13.11B
Cash Flow
Free Cash Flow	6.29B	6.62B	5.70B	3.76B	3.39B	2.85B
Operating Cash Flow	6.34B	6.67B	5.75B	3.82B	3.43B	2.89B
Investing Cash Flow	-3.20B	-4.46B	-5.47B	-3.10B	-2.14B	-3.04B
Financing Cash Flow	-3.00B	-1.93B	-69.00M	-706.00M	-1.23B	521.28M

Arch Capital Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.40
• 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 94.4 is above the 20-day moving average (MA) of 90.39, above the 50-day MA of 89.73, and above the 200-day MA of 90.84, indicating a bullish trend. The MACD of 1.23 indicates Negative momentum. The RSI at 68.13 is Neutral, neither overbought nor oversold. The STOCH value of 77.97 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	82 Outperform	$38.33B	11.24	20.07%	1.66%	7.11%	22.52%
ACGL	79 Outperform	$34.23B	8.83	17.81%	―	16.68%	-28.54%
ORI	77 Outperform	$11.48B	13.96	12.96%	6.78%	7.08%	-4.36%
PFG	73 Outperform	$18.59B	12.32	13.74%	3.67%	12.33%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AIG	59 Neutral	$41.03B	13.63	7.68%	2.11%	-23.02%	52.43%
EQH	40 Underperform	$13.42B	―	-41.33%	2.24%	7.70%	-155.12%

Arch Capital Group Corporate Events

Arch Capital Group Amends Credit Facility Agreement

On October 29, 2025, Arch Reinsurance Ltd., a subsidiary of Arch Capital Group Ltd., amended its Letter of Credit Facility Agreement with Lloyds Bank Corporate Markets plc. The amendment extends the availability period to May 31, 2026, and accommodates changes such as the extension of letters of credit for the 2026 underwriting year and a corporate name change. This amendment maintains a $700 million facility for letters of credit, impacting Arch’s operational flexibility and financial arrangements.

The most recent analyst rating on (ACGL) stock is a Buy with a $105.00 price target. To see the full list of analyst forecasts on Arch Capital Group stock, see the ACGL Stock Forecast page.

Arch Capital’s Record Earnings Amid Market Challenges

Arch Capital’s Latest Earnings Call: Record Results Amidst Market Challenges

Arch Capital Reports Strong Q3 2025 Financial Results

Arch Capital Group Ltd., a Bermuda-based company listed on NASDAQ, operates in the insurance, reinsurance, and mortgage insurance sectors globally through its subsidiaries.

Arch Capital Group Expands Share Repurchase Program

On September 4, 2025, Arch Capital Group Ltd. announced an increase of $2.0 billion to its existing share repurchase program, bringing the total available for repurchases to approximately $2.3 billion. The decision reflects the company’s strategic approach to manage its capital and enhance shareholder value, with repurchase timing and amounts influenced by market conditions and regulatory considerations.

The most recent analyst rating on (ACGL) stock is a Buy with a $104.00 price target. To see the full list of analyst forecasts on Arch Capital Group stock, see the ACGL Stock Forecast page.