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American Coastal Insurance (ACIC)
NASDAQ:ACIC
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American Coastal Insurance
(NASDAQ:ACIC)
Rating:63Neutral
Price Target:
$11.50
▲(6.09%Upside)
American Coastal Insurance (ACIC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$520.28M
Dividend YieldN/A
Average Volume (3M)266.19K
Price to Earnings (P/E)7.2
Beta (1Y)0.55
Revenue Growth12.19%
EPS Growth5.12%
CountryUS
Employees65
SectorFinancial
Sector Strength75
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.42
Shares Outstanding48,353,413
10 Day Avg. Volume180,861
30 Day Avg. Volume266,191
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.98
Price to Sales (P/S)0.00
P/FCF Ratio3.60
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit-504.52
Enterprise Value/Ebitda1.16
Forecast
1Y Price Target
$15.00Price Target Upside38.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
American Coastal Insurance Business Overview & Revenue Model
Company DescriptionAmerican Coastal Insurance (ACIC) is a specialized insurance provider focusing on offering comprehensive coverage solutions for homeowners and businesses located in coastal regions. With a commitment to safeguarding properties against the unique risks associated with coastal living, ACIC provides policies that cover a range of perils, including hurricanes, floods, and windstorms. The company operates primarily within the insurance sector, delivering tailored insurance products that address the specific needs of coastal communities.
How the Company Makes MoneyAmerican Coastal Insurance (ACIC) generates revenue primarily through the sale of insurance policies. The company collects premiums from its customers in exchange for providing coverage against specific risks. These premiums constitute the primary revenue stream for ACIC. The company may also invest the premiums it collects into various financial instruments, potentially generating additional income from investment returns. Additionally, ACIC may engage in strategic partnerships with reinsurance firms to mitigate its own risk exposure, allowing it to maintain financial stability while expanding its customer base. Factors such as climate change and regulatory environments can influence the company's earnings, as they impact both the demand for insurance products and the overall risk profile of the areas covered by ACIC policies.
American Coastal Insurance Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -9.06%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in the first quarter with significant growth in premiums, improved financial metrics, and enhanced reinsurance program. Despite some increased costs and competitive market challenges, the positive aspects, including strong equity growth and reduced reinsurance rates, outweigh the negatives.Q1-2025 Updates
Positive Updates
Strong First Quarter Performance
American Coastal achieved a target combined ratio of 65% and a core return on equity of over 34%.
Growth in Policies and Premiums
Policies in-force grew approximately 6% since year-end, with gross premiums written increasing by over 7% year-over-year.
Reinsurance Program Improvements
The core catastrophe reinsurance program renewal is 100% placed except for a new top layer, increasing first event limit by approximately 16% and aggregate protection by about 32% year-over-year.
Decrease in Risk-Adjusted Reinsurance Rate
Risk-adjusted reinsurance rate decreased estimated at approximately 12%, with variations between layers from 10% to 22%.
Strong Financial Metrics
Net income for the first quarter was $21.3 million, with net premium earned growing by 9% to $68.3 million.
Improved Cash Position
Cash investments grew by 5.2% to $540.8 million, bolstered by higher-than-expected proceeds from the Interboro sale.
Increase in Stockholders’ Equity
Stockholders’ equity increased by 10.7% to $260.9 million, with a 10.4% increase in book value per share from year-end 2024.
Negative Updates
Decrease in Core Income
Core income decreased by $3.7 million year-over-year due to increased policy acquisition costs.
Increased Operating Expenses
Operating expenses increased by $12.1 million, primarily due to a 144.8% increase in policy acquisition costs.
Competitive Apartment Market
The apartment market is more competitive than expected, limiting hyper-growth opportunities.
Company Guidance
During the first quarter of fiscal year 2025, American Coastal Insurance Corporation achieved several key metrics that highlight its strong performance. The company reported a target combined ratio of 65% and a core return on equity exceeding 34%. It saw a 6% growth in policies in-force since year-end, with premiums totaling approximately $661 million as of March 31, 2025. Gross premiums written increased by over 7% compared to the previous year, supported by a renewal account retention rate of 88%. The company's catastrophe reinsurance program, effective June 1, 2025, is projected to increase its first event limit by approximately 16%, from $1.16 billion to around $1.35 billion, and aggregate protection for multiple events is expected to rise by about 32%. Additionally, the first event retention is anticipated to increase from approximately $20.5 million to $29.75 million. The risk-adjusted reinsurance rate decreased by approximately 12%, with variations across layers ranging from 10% to 22%. Overall, the company is well-positioned to continue its growth initiatives in 2025, supported by a 10.7% increase in stockholders’ equity and a book value per share growth of 10.4% from the previous year-end.American Coastal Insurance Financial Statement Overview
Summary
American Coastal Insurance shows improving financial health with a recovery trajectory in revenue and profitability, strong gross profit margins, and positive cash flow development. However, historical volatility and declining equity ratios necessitate caution.Income Statement
American Coastal Insurance has shown a volatile revenue trend with a significant decline from 2020 to 2022, followed by a recovery in 2023 and 2024. The gross profit margin remains strong at 100%, but the net profit margin has been inconsistent, with a notable improvement in 2024. EBIT and EBITDA margins have fluctuated, indicating operational challenges.55
Neutral
Balance Sheet
The company maintains a moderate debt-to-equity ratio, reflecting a balanced approach to leverage. However, the equity ratio has been declining, suggesting increased liabilities relative to assets. Return on equity has improved recently, but historical performance shows volatility, indicating potential risks in financial stability.60
Neutral
Cash Flow
Cash flow from operations has improved significantly in 2024, turning positive after negative figures in previous years. Free cash flow has also shown a positive trend, enhancing liquidity. However, the operating cash flow to net income ratio indicates variability, reflecting potential cash management challenges.65
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 296.66M | 286.54M | 455.42M | 634.53M | 846.66M |
| Gross Profit | 296.66M | 286.54M | 455.42M | 634.53M | 846.66M |
| EBITDA | 113.66M | 107.69M | 1.95M | 10.32M | -111.81M |
| Net Income | 75.72M | 309.91M | -468.00M | -57.92M | -131.31K |
Balance Sheet | |||||
| Total Assets | 1.22B | 1.06B | 2.84B | 2.70B | 2.85B |
| Cash, Cash Equivalents and Short-Term Investments | 285.04M | 153.76M | 606.36M | 875.63M | 1.18B |
| Total Debt | 152.34M | 149.46M | 154.16M | 158.50M | 160.35M |
| Total Liabilities | 980.45M | 891.62M | 3.02B | 2.37B | 2.43B |
| Stockholders Equity | 235.66M | 168.76M | -180.18M | 312.41M | 395.75M |
Cash Flow | |||||
| Free Cash Flow | 243.49M | -136.20M | -176.16M | -300.66M | -21.32M |
| Operating Cash Flow | 243.51M | -136.00M | -173.11M | -295.39M | -10.47M |
| Investing Cash Flow | -179.21M | -2.54M | 236.84M | 251.38M | 36.57M |
| Financing Cash Flow | -13.84M | 26.77M | -25.39M | -12.21M | -11.65M |
American Coastal Insurance Technical Analysis
Neutral
10.84
Price Trends
10.92
Negative
11.28
Negative
11.68
Negative
Market Momentum
<0.01
Negative
51.69
Neutral
35.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACIC, the sentiment is Neutral. The current price of 10.84 is above the 20-day moving average (MA) of 10.76, below the 50-day MA of 10.92, and below the 200-day MA of 11.68, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.69 is Neutral, neither overbought nor oversold. The STOCH value of 35.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ACIC.
American Coastal Insurance Risk Analysis
American Coastal Insurance disclosed 30 risk factors in its most recent earnings report. American Coastal Insurance reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Coastal Insurance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $641.47M | 13.22 | 13.78% | 2.63% | 17.35% | -13.53% | |
74 Outperform | $660.47M | 8.55 | 27.59% | ― | 11.41% | 53.85% | |
69 Neutral | $700.52M | 10.99 | 16.95% | 2.57% | 7.24% | -9.28% | |
67 Neutral | ¥718.95B | 10.85 | 7.55% | 3.30% | 7.89% | 15.53% | |
65 Neutral | $450.44M | 15.80 | 4.14% | 4.42% | -10.61% | -19.48% | |
65 Neutral | $451.64M | 10.05 | 7.04% | ― | 5.21% | -57.04% | |
63 Neutral | $520.28M | 7.15 | 31.11% | ― | 12.19% | 5.12% |
* Financial Sector Average
Performance Comparison
ACIC
American Coastal Insurance
10.90
0.45
4.31%
GBLI
Global Indemnity
31.70
1.46
4.83%
GLRE
Greenlight Capital Re
13.30
0.47
3.66%
UVE
Universal Insurance Holdings
25.12
6.58
35.49%
HRTG
Heritage Insurance Holdings
21.54
14.48
205.10%
FSBC
Five Star
30.85
3.32
12.06%
American Coastal Insurance Corporate Events
Business Operations and Strategy
American Coastal Insurance Renews Reinsurance Program
Positive
May 29, 2025
On June 1, 2025, American Coastal Insurance Corp. renewed its core catastrophe reinsurance program, increasing its occurrence-based limit by 3.9% to approximately $1.676 billion for the 2025/26 period. This renewal enhances ACIC’s coverage, ensuring sufficient protection against significant events, including a 1-in-201-year event, and reflects a strategic adjustment in retention levels, impacting stakeholders by increasing financial resilience against future catastrophic losses.
The most recent analyst rating on (ACIC) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on American Coastal Insurance stock, see the ACIC Stock Forecast page.
Executive/Board ChangesShareholder Meetings
American Coastal Insurance Holds 2025 Annual Meeting
Neutral
May 22, 2025
American Coastal Insurance held its 2025 Annual Meeting where stockholders voted on four proposals. The meeting resulted in the election of Class A directors for a two-year term and the ratification of Deloitte & Touche, LLP as the independent registered public accounting firm for the fiscal year ended December 31, 2025. Additionally, stockholders recommended the compensation of the Company’s named executive officers.
The most recent analyst rating on (ACIC) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on American Coastal Insurance stock, see the ACIC Stock Forecast page.
Financial Disclosures
American Coastal Insurance Reports Q1 2025 Financial Results
Neutral
May 8, 2025
American Coastal Insurance Corporation reported its financial results for the first quarter ended March 31, 2025, showing a 7.2% increase in gross premiums written compared to the previous year. However, despite the growth in premiums, the company experienced a 9.5% decline in consolidated net income, reflecting challenges in maintaining profitability.
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.