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Amerisafe (AMSF)
NASDAQ:AMSF
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Amerisafe
(NASDAQ:AMSF)
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Rating:72Outperform
Price Target:―
Amerisafe's stock score reflects a solid financial foundation with zero debt and a strong equity position, though it faces challenges in profitability and cash flow growth. Technical indicators show a bearish trend, impacting near-term sentiment. Valuation metrics are fair, and the earnings call highlights both operational strengths and financial challenges.
Positive Factors
Financial Stability
Amerisafe's zero-debt position enhances its financial flexibility and stability, allowing it to navigate economic uncertainties without the burden of interest obligations.
Gross Written Premiums Growth
Growth in gross written premiums suggests effective market penetration and demand for Amerisafe's insurance products, supporting long-term revenue growth.
Policy Retention
High policy retention rates indicate strong customer loyalty and satisfaction, which can lead to sustained revenue streams and reduced costs associated with acquiring new customers.
Negative Factors
Cash Flow Decline
A decline in free cash flow indicates challenges in cash generation, which could hinder Amerisafe's capacity to fund operations and growth without external financing.
Increased Expenses
Rising expenses can pressure profit margins and reduce financial efficiency, potentially limiting Amerisafe's ability to invest in strategic growth areas.
Decreased Net Income
The significant drop in net income reflects challenges in profitability, which could impact the company's ability to reinvest in growth initiatives and maintain competitive positioning.
Amerisafe (AMSF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$828.18M
Dividend Yield10.53%
Average Volume (3M)104.22K
Price to Earnings (P/E)16.5
Beta (1Y)0.23
Revenue Growth-0.86%
EPS Growth-11.19%
CountryUS
Employees362
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.53
Shares Outstanding18,990,652
10 Day Avg. Volume180,210
30 Day Avg. Volume104,224
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue2.73
Enterprise Value/Gross Profit3.91
Enterprise Value/Ebitda13.03
Forecast
1Y Price Target
$65.00Price Target Upside50.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Amerisafe Business Overview & Revenue Model
Company DescriptionAmerisafe, Inc. (AMSF) is a specialty provider of workers' compensation insurance focused primarily on small to mid-sized employers engaged in high-hazard industries. These industries include construction, trucking, logging, agriculture, and manufacturing, where the risk of workplace injuries is significantly higher. Headquartered in DeRidder, Louisiana, Amerisafe operates across the United States, offering tailored insurance solutions designed to meet the unique needs of businesses operating in these sectors.
How the Company Makes MoneyAmerisafe generates revenue primarily through underwriting workers' compensation insurance policies. The company's key revenue stream is the collection of premiums from policyholders, which are calculated based on the level of risk associated with the insured's industry and the size of their workforce. Amerisafe's profitability is influenced by its ability to accurately assess risks, set appropriate premium rates, and manage claims efficiently. The company also earns investment income from its portfolio, which consists of premiums collected and held in reserve to pay future claims. Strategic partnerships with independent insurance agencies and brokers help Amerisafe expand its market reach and maintain a steady flow of new business.
Amerisafe Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with significant growth in premiums, favorable loss experience, and strong financial performance, despite some challenges like increased expenses and a competitive market environment.Q2-2025 Updates
Positive Updates
Growth in Premiums and Policy Count
AMERISAFE reported a 12.8% growth in voluntary premiums for policies written in the quarter and a 3.4% increase in in-force policy count, supported by new business growth and 93.8% renewal retention.
Favorable Loss Experience
AMERISAFE's frequency was down compared to the second quarter of 2024, with a current accident year loss ratio of 71%. The company also reported $8.6 million of favorable development in the quarter.
Share Repurchase Program and Dividend
The Board of Directors approved a $25 million share repurchase program and declared a regular quarterly cash dividend of $0.39 per share.
Strong Financial Performance
The company reported net income of $14 million or $0.73 per diluted share for the second quarter of 2025, an increase from $11 million or $0.57 per diluted share in the same quarter of 2024.
High-Quality Investment Portfolio
AMERISAFE maintains a high-quality investment portfolio with an average AA- credit rating and a tax equivalent book yield of 3.85%.
Negative Updates
Increase in Expense Ratio
Total underwriting and other expenses increased, resulting in an expense ratio of 31.3% compared with 29.8% in the year-ago quarter.
Decrease in Net Investment Income
Net investment income decreased by 10.2% to $6.7 million, driven by a decrease in investable assets following the payment of a special dividend.
Potential Market Challenges
While AMERISAFE is well-positioned, the market remains competitive with challenges such as mid-single digit declines in workers' compensation approved loss costs and a reported 6% increase in medical severity for 2024.
Company Guidance
During the AMERISAFE Second Quarter 2025 Earnings Call, the guidance provided highlighted several key financial metrics and strategic initiatives. The company reported a 12.8% growth in voluntary premiums for policies written in the quarter and a 3.4% increase in in-force policy count, supported by a 93.8% renewal retention rate. The industry's combined ratio remained below 100% for 2024, but AMERISAFE noted a potential shift in the market cycle due to factors like California's 8.7% increase in approved loss costs and a 6% rise in medical severity reported by NCCI. AMERISAFE's current accident year loss ratio stood at 71%, and the company experienced $8.6 million in favorable development. The Board reauthorized a $25 million share repurchase program and declared a regular quarterly cash dividend of $0.39 per share. Financially, net income for the quarter was $14 million, or $0.73 per diluted share, and operating net income was $10 million, or $0.53 per diluted share. Gross written premiums increased by 4.3% year-over-year, reaching $79.7 million, despite audit premium headwinds. The expense ratio was 31.3%, reflecting ongoing growth investments, while the effective tax rate stood at 20.1%. AMERISAFE's investment portfolio, predominantly high-quality with an average AA- credit rating, contributed to a tax-equivalent book yield of 3.85%. The company also repurchased 63,000 shares at an average cost of $44.55 during the quarter, supporting a book value per share increase to $13.96. AMERISAFE's capital position remains strong, with a statutory surplus of $257 million.Amerisafe Financial Statement Overview
Summary
Amerisafe demonstrates strong financial stability with zero debt and a healthy equity position, but faces challenges in maintaining profitability margins and cash flow growth. The company is well-positioned in terms of financial health but could benefit from strategies to boost revenue growth and cash flow efficiency.Income Statement
Amerisafe's income statement shows a stable revenue base with a gross profit margin of approximately 89.8% in 2024. However, the net profit margin decreased from 20.2% in 2023 to 17.9% in 2024, indicating a slight decline in profitability. The company experienced a modest revenue growth rate of 0.7% from 2023 to 2024, which suggests stability but limited growth potential. EBIT and EBITDA margins are unavailable for 2024, affecting the assessment of operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with zero total debt in 2024, resulting in a debt-to-equity ratio of 0, which is excellent for financial stability. The return on equity (ROE) decreased to 21.5% in 2024 from 21.2% in 2023, but remains robust. The equity ratio is 22.2% in 2024, showing a consistent reliance on equity financing. The absence of debt enhances financial flexibility.80
Positive
Cash Flow
Cash flow analysis indicates a decrease in free cash flow from $29.3M in 2023 to $23.3M in 2024, resulting in a negative free cash flow growth rate of -20.2%. The operating cash flow to net income ratio is 0.44 in 2024, highlighting a need for improved cash generation relative to profits. The free cash flow to net income ratio stands at 0.42, suggesting that cash management strategies could be optimized.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 306.44M | 309.04M | 306.91M | 294.69M | 316.01M | 339.50M |
| Gross Profit | 214.05M | 277.54M | 306.91M | 142.38M | 155.22M | 339.50M |
| EBITDA | 64.19M | 70.15M | 0.00 | 68.95M | 80.47M | 106.92M |
| Net Income | 50.42M | 55.44M | 62.11M | 55.60M | 65.76M | 86.60M |
Balance Sheet | ||||||
| Total Assets | 1.16B | 1.16B | 1.23B | 1.27B | 1.40B | 1.47B |
| Cash, Cash Equivalents and Short-Term Investments | 355.18M | 351.80M | 355.75M | 396.71M | 70.72M | 61.76M |
| Total Debt | 0.00 | 428.00K | 267.00K | 336.00K | 395.00K | 499.00K |
| Total Liabilities | 889.54M | 900.45M | 936.71M | 951.85M | 1.00B | 1.03B |
| Stockholders Equity | 265.57M | 257.34M | 292.45M | 317.43M | 399.32M | 438.82M |
Cash Flow | ||||||
| Free Cash Flow | 7.92M | 23.35M | 29.29M | 26.11M | 36.68M | 62.48M |
| Operating Cash Flow | 9.04M | 24.19M | 29.84M | 28.19M | 37.98M | 63.40M |
| Investing Cash Flow | 99.67M | 72.37M | 43.88M | 75.43M | 70.96M | 43.37M |
| Financing Cash Flow | -90.86M | -91.20M | -96.51M | -112.87M | -99.97M | -88.83M |
Amerisafe Technical Analysis
Negative
43.10
Price Trends
44.83
Negative
44.85
Negative
47.27
Negative
Market Momentum
-0.38
Positive
42.14
Neutral
40.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMSF, the sentiment is Negative. The current price of 43.1 is below the 20-day moving average (MA) of 44.78, below the 50-day MA of 44.83, and below the 200-day MA of 47.27, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 42.14 is Neutral, neither overbought nor oversold. The STOCH value of 40.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMSF.
Amerisafe Risk Analysis
Amerisafe disclosed 30 risk factors in its most recent earnings report. Amerisafe 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
Amerisafe Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | 3.05B | 8.33 | 15.61% | ― | 9.99% | 11.47% | |
72 Outperform | 994.78M | 10.16 | ― | 2.93% | 2.32% | -11.91% | |
72 Outperform | 495.68M | 14.76 | 12.34% | 6.03% | 15.28% | 26.05% | |
72 Outperform | $828.18M | 16.54 | 17.80% | 10.53% | -0.86% | -11.19% | |
59 Neutral | 714.38M | 15.57 | 11.66% | 2.57% | 6.22% | 79.14% | |
51 Neutral | 255.79M | -1.78 | -14.35% | 0.72% | -20.88% | 1.34% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
AMSF
Amerisafe
43.77
-0.66
-1.49%
EIG
Employers Holdings
42.31
-4.05
-8.74%
AMBC
Ambac Financial
9.54
-1.69
-15.05%
TIPT
Tiptree Financial
19.05
0.01
0.05%
JRVR
James River Group
5.57
-0.65
-10.45%
HIPO
Hippo Holdings
35.44
18.27
106.41%
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.