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Arch Capital Group
(NASDAQ:ACGL)
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Rating:81Outperform
Price Target:
$121.00
â–²(17.07% Upside)
Action:Reiterated
Date:07/30/26
The score is driven primarily by strong financial performance (high margins, strong ROE, and low leverage) and a supportive price trend (trading above major moving averages). Valuation is also constructive with a modest P/E. Offsetting these positives, the latest earnings call flagged a more competitive/softening market with premium declines, rising ex-cat combined ratios, and notable catastrophe/geopolitical losses, which temper near-term outlook.
Positive Factors
Conservative Balance Sheet
Low financial leverage and a conservative balance sheet give Arch durable capital flexibility. With debt-to-equity near 0.11 and materially grown equity since 2021, the firm can absorb underwriting or investment shocks, support reinsurance programs, and pursue selective capital deployment without threatening solvency.
Negative Factors
Declining Premium Volumes
Falling net premiums written indicate reduced top-line scale and can erode underwriting leverage over coming quarters. Client retention of risk and lower new business flows limit pricing power and growth, pressuring long-term premium base and making earnings more reliant on investment returns and reserve moves.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Low financial leverage and a conservative balance sheet give Arch durable capital flexibility. With debt-to-equity near 0.11 and materially grown equity since 2021, the firm can absorb underwriting or investment shocks, support reinsurance programs, and pursue selective capital deployment without threatening solvency.
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
$35.12B
Dividend YieldN/A
Average Volume (3M)1.95M
Price to Earnings (P/E)7.8
Beta (1Y)0.37
Revenue Growth-0.21%
EPS Growth31.57%
CountryUS
Employees8,000
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)12.96
Shares Outstanding349,389,600
10 Day Avg. Volume1,818,857
30 Day Avg. Volume1,949,320
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$111.67Price Target Upside8.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)9.37
Revenue Forecast (FY)$16.79B
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:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call balanced notable operational and financial strengths against meaningful market and underwriting headwinds. Highlights include strong operating earnings ($893M), robust investment and equity-method returns ($613M combined pre-tax), very strong cash flow ($1.3B), disciplined capital returns ( $1.2B repurchased in the quarter; $1.95B H1), solid mortgage results (underwriting income $220M; U.S. MI delinquency 2.1%), and conservative leverage (18.1%). Offsetting these positives are signs of a softening market with increased competition and rate compression (property mid-teens mid-year declines), declines in net premiums written (insurance -5.1%, reinsurance ~-10%), rising ex-cat combined ratios (group 82.5%, +160 bps YoY), and tangible catastrophe/geopolitical losses (Iran-related losses and $201M current-quarter cat losses net). Overall, management presents confidence in the diversified model and capital approach but acknowledges a more competitive environment that will require disciplined underwriting and selective capital deployment.Positive Updates
Strong Quarterly Earnings and EPS
After-tax operating income of $893 million and operating EPS of $2.56 for the quarter, driven by solid underwriting across segments and favorable prior-year development.
Negative Updates
Slowing Top-Line Growth and Declining Net Premiums Written
Net premiums written declined across segments: Insurance NPW down ~5.1% YoY and Reinsurance NPW down ~10.0–10.4% YoY as clients retained more risk and competition reduced rates.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Earnings and EPS
After-tax operating income of $893 million and operating EPS of $2.56 for the quarter, driven by solid underwriting across segments and favorable prior-year development.
Read all positive updates
Company Guidance
Management's forward-looking commentary emphasized disciplined capital allocation and near-term financial expectations: after reporting after‑tax operating income of $893M ($2.56/share) in Q2, they said a $2.0B debt raise (10‑ and 30‑yr) will be used to redeem $500M maturing notes and buy $418M of longer‑dated notes and that interest expense should be about $60–63M in each of the next two quarters, with debt + preferred to capital at 18.1%. Share buybacks remain the primary capital return tool—Q2 repurchases were 12.4M shares for ~$1.2B (H1 repurchases ~$1.95B, ≈94% of H1 net income)—with special dividends secondary and no fixed buyback target; operating expense ratios are expected to revert to historical levels in H2. On underwriting and risk measures they reiterated an annual cat load of ~6–8%, a 1‑in‑250 net PML of $1.8B (~8% of tangible shareholders’ equity), an ex‑cat accident‑year combined ratio of 82.5% (up 160 bps YoY), $201M of current‑year catastrophe losses net, $165M of favorable prior‑year development (pre‑tax, ~4.1 pts), and segment underwriting income of $27M (Insurance), $410M (Reinsurance) and $220M (Mortgage); investments produced $417M ($1.20/sh) plus $196M ($0.56/sh) from equity‑method funds (combined $613M / $1.76 pre‑tax), cash from operations was $1.3B, the investment base is $49.5B (AA‑ average), and U.S. MI delinquency remained 2.1%.Arch Capital Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.20B | 19.93B | 17.44B | 13.29B | 9.66B | 8.92B |
| Gross Profit | 8.87B | 7.41B | 6.45B | 4.74B | 2.89B | 3.04B |
| EBITDA | 5.60B | 5.35B | 4.85B | 3.61B | 1.72B | 2.32B |
| Net Income | 4.69B | 4.40B | 4.31B | 4.44B | 1.48B | 2.16B |
Balance Sheet | ||||||
| Total Assets | 71.55B | 67.06B | 70.91B | 58.91B | 47.99B | 45.10B |
| Cash, Cash Equivalents and Short-Term Investments | 1.11B | 11.54B | 9.31B | 8.05B | 6.50B | 7.14B |
| Total Debt | 4.29B | 2.73B | 2.73B | 2.73B | 2.73B | 2.72B |
| Total Liabilities | 47.52B | 42.85B | 50.09B | 40.55B | 35.07B | 31.55B |
| Stockholders Equity | 24.03B | 24.21B | 20.82B | 18.35B | 12.91B | 13.55B |
Cash Flow | ||||||
| Free Cash Flow | 6.05B | 6.13B | 6.62B | 5.70B | 3.76B | 3.39B |
| Operating Cash Flow | 6.10B | 6.17B | 6.67B | 5.75B | 3.82B | 3.43B |
| Investing Cash Flow | -3.97B | -4.04B | -4.46B | -5.47B | -3.10B | -2.14B |
| Financing Cash Flow | -1.92B | -1.89B | -1.93B | -69.00M | -706.00M | -1.23B |
Arch Capital Group Technical Analysis
Neutral
103.36
Price Trends
96.59
Positive
95.92
Positive
94.81
Positive
Market Momentum
1.40
Positive
52.13
Neutral
35.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACGL, the sentiment is Neutral. The current price of 103.36 is above the 20-day moving average (MA) of 101.72, above the 50-day MA of 96.59, and above the 200-day MA of 94.81, indicating a neutral trend. The MACD of 1.40 indicates Positive momentum. The RSI at 52.13 is Neutral, neither overbought nor oversold. The STOCH value of 35.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $35.12B | 7.76 | 20.48% | ― | -0.21% | 31.57% | |
78 Outperform | $38.44B | 9.09 | 22.99% | 1.65% | 5.95% | 39.99% | |
77 Outperform | $24.34B | 16.15 | 13.23% | 2.92% | 3.72% | 41.16% | |
74 Outperform | $10.52B | 9.23 | 18.74% | 8.77% | 12.13% | 29.71% | |
70 Outperform | $41.66B | 13.74 | 7.70% | 2.34% | -2.31% | 26.43% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
56 Neutral | $13.01B | -16.96 | -219.79% | 2.31% | -19.35% | -175.55% |
* Financial Sector Average
ACGL
Arch Capital Group
101.12
12.46
14.05%
AIG
American International Group
78.79
2.18
2.84%
HIG
Hartford Insurance
142.90
17.52
13.98%
ORI
Old Republic International
43.33
9.76
29.08%
PFG
Principal Financial
115.13
41.71
56.81%
EQH
Equitable Holdings
48.00
-1.60
-3.22%
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...
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.