Aspen Insurance Holdings Ltd Class A (AHL) AI Stock Analysis

• Market Cap: $3.36B
• Dividend Yield: N/A
• Average Volume (3M): 772.94K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.36
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 1,128
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 1.22
• Shares Outstanding: 91,838,360
• 10 Day Avg. Volume: 1,803,938
• 30 Day Avg. Volume: 772,942
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 1.74
• Enterprise Value/Gross Profit: 5.98
• Enterprise Value/Ebitda: 10.13
• 1Y Price Target: $38.17
• Price Target Upside: 4.26% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 62 Neutral
• Price Target: $39.00 ▲(6.53% Upside)

Aspen Insurance Holdings Ltd Class A demonstrates strong financial performance with robust revenue growth and profitability, supported by a stable balance sheet. The technical indicators suggest bullish momentum, though caution is advised due to potential overbought conditions. The absence of valuation metrics introduces uncertainty, impacting the overall score.

Positive Factors

Acquisition

The acquisition deal offers a 36% premium to the unaffected share price.

Analyst Recommendation

Analyst recommends a Buy rating for Aspen Insurance Holdings, suggesting potential for improved future operating returns.

Financial Performance

Aspen's recent operating returns have improved and now align with non-life peers, indicating enhanced performance and stability.

Negative Factors

Competitive Landscape

There is a low probability of another bidder emerging since M&A was not a part of the prior investment case.

Market Position

The shares of Aspen were downgraded to Neutral from Buy following the formal announcement of Sompo’s intention to buy the company.

Valuation Concerns

The deal price is below the estimated intrinsic value of Aspen.

Aspen Insurance Holdings Ltd Class A Business Overview & Revenue Model

Company Description

Aspen Insurance Holdings Limited, together with its subsidiaries, engages in the insurance and reinsurance businesses in Australia, Asia, the United Kingdom, Ireland, rest of Europe, the United States, Canada, and internationally. It offers various reinsurance and retrocession products, including property catastrophe reinsurance, other property reinsurance, casualty reinsurance, and specialty reinsurance; and various insurance products, such as first party insurance, specialty insurance, casualty insurance, financial and professional lines insurance, and other insurance. The company offers its products primarily through brokers and reinsurance intermediaries. The company was formerly known as Exali Reinsurance Holdings Ltd and changed its name to Aspen Insurance Holdings Limited in November 2002. Aspen Insurance Holdings Limited was incorporated in 2002 and is headquartered in Hamilton, Bermuda.

How the Company Makes Money

Aspen Insurance Holdings generates revenue primarily through the sale of insurance and reinsurance policies. The company's revenue model is based on underwriting premiums collected from policyholders, which are a key revenue stream. Additionally, Aspen earns investment income from the premiums it collects and holds in reserve before claims are paid out. The company strategically invests these funds in various financial instruments to generate returns. Significant partnerships and relationships with brokers and reinsurance intermediaries enhance its market reach and contribute to earnings. The effective management of claims and risk exposure also plays a crucial role in maintaining profitability, as it allows Aspen to optimize the balance between premiums collected and claims paid out.

Aspen Insurance Holdings Ltd Class A Financial Statement Overview

Summary

Aspen Insurance Holdings Ltd Class A exhibits strong revenue growth and profitability, supported by a stable balance sheet with low leverage. The company has shown significant improvement in cash flow generation, although there are areas for enhancement in cash flow coverage.

Income Statement

Aspen Insurance Holdings Ltd Class A has shown a strong revenue growth rate of 338.86% in the latest year, indicating robust top-line expansion. The gross profit margin stands at 33.56%, and the net profit margin is 15.40%, reflecting solid profitability. The EBIT margin of 16.67% and EBITDA margin of 16.95% suggest efficient operational management. However, the decline in net income from the previous year indicates some challenges in maintaining profitability.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.11, indicating low leverage and financial stability. The return on equity (ROE) is 14.42%, showcasing effective use of equity to generate profits. The equity ratio of 21.42% suggests a strong equity base relative to total assets. Overall, the balance sheet reflects a stable financial position, though there is room for improvement in asset utilization.

Cash Flow

Aspen Insurance Holdings Ltd Class A has achieved a significant free cash flow growth rate of 145.95%, demonstrating improved cash generation capabilities. The operating cash flow to net income ratio of 0.49 and free cash flow to net income ratio of 0.97 indicate efficient cash flow management. However, the relatively low operating cash flow coverage ratio suggests potential challenges in covering net income with operating cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.26B	3.16B	2.89B	2.71B	2.59B	2.80B
Gross Profit	658.00M	1.06B	961.40M	531.00M	478.20M	2.68B
EBITDA	388.30M	535.10M	479.50M	70.10M	114.70M	53.50M
Net Income	388.60M	486.10M	534.70M	51.10M	29.80M	-56.40M
Balance Sheet
Total Assets	16.41B	15.75B	15.22B	15.16B	13.84B	13.09B
Cash, Cash Equivalents and Short-Term Investments	6.21B	5.89B	5.26B	959.20M	6.21B	6.22B
Total Debt	367.40M	375.60M	386.10M	395.40M	415.10M	405.90M
Total Liabilities	13.07B	12.38B	12.32B	12.80B	11.07B	10.20B
Stockholders Equity	3.35B	3.37B	2.91B	2.36B	2.77B	2.89B
Cash Flow
Free Cash Flow	480.30M	537.40M	315.80M	-55.00M	460.20M	-713.40M
Operating Cash Flow	505.70M	554.90M	324.70M	-55.00M	524.70M	-672.70M
Investing Cash Flow	-368.00M	-352.80M	-172.20M	-196.50M	-950.30M	1.15B
Financing Cash Flow	-132.70M	-307.90M	-90.20M	-84.60M	500.00K	223.50M

Aspen Insurance Holdings Ltd Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HG	82 Outperform	$2.43B	6.47	15.86%	―	28.86%	-11.22%
SKWD	79 Outperform	$2.03B	15.86	16.20%	―	22.20%	5.78%
SYBT	73 Outperform	$2.34B	18.23	13.51%	1.56%	13.28%	22.43%
Sector *	68 Neutral	$17.81B	11.87	10.24%	3.74%	9.75%	1.30%
SPNT	66 Neutral	$2.19B	20.90	4.82%	―	-4.56%	-55.48%
ROOT	65 Neutral	$1.43B	19.49	27.52%	―	59.76%	―
AHL	62 Neutral	$3.36B	―	12.50%	―	―	―