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Amerisafe (AMSF)
NASDAQ:AMSF
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Amerisafe
(NASDAQ:AMSF)
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Rating:63Neutral
Price Target:
$35.00
▲(7.59% Upside)
Action:DowngradedDate:02/28/26
The score is driven mainly by decent underlying financial strength (low leverage, consistent profitability) and supportive valuation (moderate P/E and high yield), but is meaningfully offset by weak technicals (price below key moving averages with negative momentum) and earnings-call headwinds around negative rate outlook and elevated claim severity that pressured year-over-year earnings.
Positive Factors
Conservative balance sheet / low leverage
Near-zero leverage and a conservatively positioned balance sheet provide durable financial flexibility for underwriting volatility, large claim shocks, and capital actions. Low debt reduces refinancing risk and supports dividends and reinsurance buying power over the medium term.
Sustained underwriting profitability
A sub-100 combined ratio and high ROE reflect disciplined underwriting, effective claims management and loss control. These underwriting advantages help generate repeatable underwriting income and bolster retained earnings, supporting capital and shareholder returns over multiple years.
Strong premium growth and high retention
High retention and double-digit policy count growth show durable distribution strength and product-market fit in higher-hazard segments. Persistent premium expansion from core channels supports top-line stability and underwriting scale even in a soft rate environment.
Negative Factors
Rising claim severity and frequency of large losses
A growing count of $1M+ claims and a higher accident-year loss pick materially increase reserve risk and earnings volatility. Persistent severity trends can erode underwriting margins, force higher pricing or reinsurance, and lengthen cash outflows for claim settlement over multiple years.
Prolonged soft market / negative filed rates
Sustained negative filed rates compress pricing power across the book and limit the firm's ability to fully offset rising medical and indemnity cost inflation. Over several quarters this structural pricing pressure can reduce underwriting margin potential and challenge rate adequacy.
Weakened cash generation & margin compression
Declining operating and free cash flow alongside margin compression reduces internal funding for claims, dividends and investment in distribution. Weaker cash conversion and compressed underwriting margins limit capital flexibility and heighten sensitivity to reserve development or payout shocks.
Amerisafe (AMSF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$615.61M
Dividend Yield6.64%
Average Volume (3M)130.32K
Price to Earnings (P/E)13.2
Beta (1Y)0.25
Revenue Growth-1.73%
EPS Growth-18.36%
CountryUS
Employees362
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.51
Shares Outstanding18,924,398
10 Day Avg. Volume129,357
30 Day Avg. Volume130,317
Financial Highlights & Ratios
PEG Ratio-1.05
Price to Book (P/B)0.64
Price to Sales (P/S)2.30
P/FCF Ratio81.71
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue1.75
Enterprise Value/Gross Profit3.77
Enterprise Value/Ebitda9.35
Forecast
1Y Price Target
$45.50Price Target Upside39.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)2.28
Revenue Forecast (FY)$334.14M
Amerisafe Business Overview & Revenue Model
Company DescriptionAMERISAFE, Inc., an insurance holding company, underwrites workers' compensation insurance in the United States. The company's workers' compensation insurance policies provide benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. It serves small to mid-sized employers engaged in hazardous industries, including construction, trucking, logging and lumber, agriculture, manufacturing, telecommunications, and maritime. The company was incorporated in 1985 and is based in DeRidder, Louisiana.
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:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveys a cautiously positive outlook: AMERISAFE delivered solid top-line growth (GPW up 11.7% in the quarter; voluntary premium growth ~10%+), maintained strong ROE (18.5%) and a sub-100 combined ratio (91.3%), sustained retention (93.7%) and showed meaningful favorable prior-year development. At the same time, the business faces notable headwinds — a soft market with mid-single-digit negative rate expectations, higher claim severity including more $1M+ claims, medical inflation pressures, a meaningful year-over-year decline in audit premium, and lower full-year investment income — which compressed net income versus 2024 (~15% decline). Overall, the positives (growth, profitability, strong capital and underwriting discipline) outweigh the negatives, though the call emphasizes ongoing vigilance on severity, rates and medical cost inflation.Q4-2025 Updates
Positive Updates
Strong Return on Equity and Conservative Combined Ratio
ROE of 18.5% for FY2025 and a combined ratio of 91.3%, indicating continued underwriting profitability and disciplined underwriting despite market pressure.
Top-Line Growth — Gross Premiums Written
Gross premium written (GPW) grew 11.7% in the quarter and 6.7% for the full year; this marked the seventh consecutive quarter of top-line growth.
Voluntary Premium Growth and Net Premium Earned
Voluntary premium, the primary GPW component, rose 10.5% in the quarter and 10.2% for the year (vs. 4.6% in 2024). Net premium earned increased 10.7% in the quarter to $73.6M and 4.6% for the year to $283.0M.
Strong Retention and Policy Count Expansion
Renewal retention for policies offered renewal was 93.7% for the quarter; in-force policy count increased 10.2% for the year, evidencing successful distribution and retention efforts.
Favorable Prior-Accident-Year Development
Favorable development from prior accident years totaled $7.6M in the quarter (10.4%) and $33.9M for the full year (12%), helping mitigate current-year loss pressure.
Improving Investment Yield and High-Quality Portfolio
Tax-equivalent book yield increased to 3.83% (up 3 basis points vs. 2024). Investment portfolio is high quality (average AA- rating) with $797M of cash and invested assets and a 4.3-year duration.
Profitability Maintained — Positive Operating Results
Company reported FY2025 net income of $47.1M and net operating income of $41.8M, and Q4 net income of $10.4M ($0.55/share) and operating net income of $9.8M ($0.51/share), demonstrating continued profitability.
Distribution and Operational Efficiency Gains
Improved agency effectiveness: contracted agency count reduced by over one-third in four years while producing more opportunities and binds; operational collaboration (sales, safety, underwriting) described as sustainable and effective.
Niche and Product Mix Growth
Notable growth in select segments: services line increased from 5.3% to 5.8% of the book and agriculture from 6.0% to 7.3%, showing expansion within existing footprints and classes.
Balance Sheet Strength and Capital Actions
Strong capital position highlighted with $797M of invested assets and cash; book value per share reported at $13.39 after a special dividend in December 2025.
Negative Updates
Current Accident Year Loss Ratio and Increased Severity
Current accident year loss ratio was 72% for the full year (up from 71% earlier and higher than prior year assumptions). The company recorded 25 claims with incurred values over $1,000,000 (vs. 18 in prior year), prompting an upward adjustment to the loss pick.
Deterioration in Reported Loss Ratios vs. Prior Year
Reported loss ratio was 64.5% for the quarter (vs. 56.4% in 2024, an increase of 8.1 percentage points) and 60.0% for the year (vs. 58.1% in 2024, up 1.9 percentage points), reflecting pressure from severity and rate environment.
Earnings Decline Year-over-Year
FY2025 net income decreased to $47.1M from $55.4M in 2024 (approximately a 15.0% decline). Net operating income fell to $41.8M from $48.4M (approximately a 13.6% decline), reflecting margin pressure and claim cost headwinds.
Investment Income Weakness on the Year
Net investment income decreased 7.6% for the full year to $27.0M, which weighed on overall earnings despite a modest quarter-over-quarter increase cited for the quarter.
Audit Premiums Moderating
Audit premium and adjustments contributed $12.6M for the full year vs. $20.2M in 2024, a decline of roughly 37.6%, consistent with the expected moderating trend in audit activity.
Ongoing Rate Pressure in Soft Market
Company faces a prolonged soft workers' compensation market with 12 consecutive years of rate declines; filed rates are expected to be negative mid-single-digits for 2026, continuing pricing pressure on loss ratios.
Medical Inflation and Cost Pressures
Management called out persistent medical cost pressures — notably home health and prosthetics (DME) — contributing to higher severity and upward pressure on claim costs.
Net Unrealized Losses on Available Investments
Net unrealized loss on the investment portfolio was $5.5M at quarter end (held-to-maturity securities carried at amortized cost, so unrealized losses do not impact book value but are noted).
Lumpiness and Volatility in Large Claims
Management characterized the increase in $1M+ claims as lumpy frequency of severity; such volatility resulted in reserving and loss-pick changes and introduces earnings unpredictability.
Expense and Operating Margin Pressure
Expense ratio was 29.2% for the quarter and 30.4% for the full year; combined with elevated loss costs, this contributed to compression of underwriting margins versus prior periods.
Company Guidance
Management gave limited forward guidance: they expect 2026 filed rate changes to be negative in the mid-single-digit range and said they are inclined to carry a 72% accident‑year loss pick into 2026 (up from 71%), noting continued pressure from rising severity (25 claims >$1.0M in the year) and mid‑single‑digit underlying loss cost trends; retention was strong at 93.7% in Q4, gross premium written grew 11.7% in the quarter (6.7% full year) with voluntary premium up 10.5% (Q) and 10.2% (FY) and audit premium adding $3.5M (Q) / $12.6M (FY), net premium earned was $73.6M (Q) / $283.0M (FY), wage growth was 6.1% in Q4, combined ratio finished at 91.3% with ROE of 18.5%, net income was $10.4M ($0.55 diluted) in the quarter and $47.1M for the year (operating net income $9.8M / $0.51 Q, $41.8M FY), book value per share was $13.39 after a special dividend, invested assets totaled roughly $797M, and the tax‑equivalent book yield rose to 3.83% with a portfolio duration of 4.3 years.Amerisafe Financial Statement Overview
Summary
Steady revenues and consistently positive earnings with a very low-leverage balance sheet support the score, but it is held back by recent margin compression, declining operating/free cash flow in 2024–2025, and a sharp 2025 ROE deterioration plus noted 2025 balance-sheet comparability concerns.Income Statement
Revenue has been relatively stable over the last several years, with only modest growth in 2024 and a step-up in 2025. Profitability remains solid, with healthy gross and operating margins and consistently positive net income. The key weakness is margin compression versus earlier years (notably lower net and operating margins in 2024–2025 compared with 2020–2022), and some year-to-year volatility in reported margins indicates earnings quality is not perfectly steady.66
Positive
Balance Sheet
The balance sheet is conservatively positioned with essentially no debt in recent years and a near-zero debt-to-equity profile, which reduces financial risk. Returns on equity were strong in 2021–2024 but dropped sharply in 2025, signaling weaker profitability relative to the equity base. Also, there is a large inconsistency in reported total assets and equity in 2025 versus prior years, which raises comparability and reliability concerns for trend analysis.78
Positive
Cash Flow
Cash generation is positive, with free cash flow consistently covering a large portion of net income across the period. However, operating cash flow and free cash flow declined meaningfully in 2024 and again in 2025, and free cash flow growth is negative in the most recent year. The 2025 cash conversion (free cash flow relative to net income) weakened versus prior years, pointing to less efficient cash generation recently.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 317.25M | 309.11M | 306.91M | 294.69M | 316.01M |
| Gross Profit | 147.31M | 128.09M | 306.91M | 142.38M | 155.22M |
| EBITDA | 58.85M | 70.15M | 0.00 | 68.95M | 80.47M |
| Net Income | 47.15M | 55.44M | 62.11M | 55.60M | 65.76M |
Balance Sheet | |||||
| Total Assets | 222.87M | 1.16B | 1.23B | 1.27B | 1.40B |
| Cash, Cash Equivalents and Short-Term Investments | 61.93M | 130.55M | 133.43M | 396.71M | 70.72M |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 395.00K |
| Total Liabilities | -907.67M | 900.45M | 936.71M | 951.85M | 1.00B |
| Stockholders Equity | 1.13B | 257.34M | 292.45M | 317.43M | 399.32M |
Cash Flow | |||||
| Free Cash Flow | 8.92M | 23.35M | 29.29M | 26.11M | 36.68M |
| Operating Cash Flow | 11.07M | 24.19M | 29.84M | 28.19M | 37.98M |
| Investing Cash Flow | 68.42M | 72.37M | 43.88M | 75.43M | 70.96M |
| Financing Cash Flow | -61.61M | -91.20M | -96.51M | -112.87M | -99.97M |
Amerisafe Technical Analysis
Negative
32.53
Price Trends
37.88
Negative
38.55
Negative
40.81
Negative
Market Momentum
-0.84
Positive
21.38
Positive
7.15
Positive
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 32.53 is below the 20-day moving average (MA) of 37.60, below the 50-day MA of 37.88, and below the 200-day MA of 40.81, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 21.38 is Positive, neither overbought nor oversold. The STOCH value of 7.15 is Positive, 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $615.61M | 13.17 | 16.95% | 6.64% | -1.73% | -18.36% | |
63 Neutral | $644.14M | 15.01 | 10.46% | 1.31% | 4.44% | 22.40% | |
63 Neutral | $728.64M | 13.45 | 25.65% | ― | 34.48% | ― | |
60 Neutral | $321.76M | -3.36 | -6.97% | 0.63% | -19.08% | 56.21% | |
59 Neutral | $929.51M | 90.07 | 5.86% | 2.94% | 1.69% | -52.43% |
* Financial Sector Average
AMSF
Amerisafe
32.53
-16.54
-33.70%
EIG
Employers Holdings
41.35
-9.28
-18.33%
TIPT
Tiptree Financial
17.03
-5.68
-25.01%
JRVR
James River Group
7.00
2.14
44.03%
HIPO
Hippo Holdings
28.76
0.12
0.42%
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.