Accelerant Holdings Class A (ARX) AI Stock Analysis

• Market Cap: $3.41B
• Dividend Yield: N/A
• Average Volume (3M): 873.40K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 451
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Brokers
• EPS (TTM): 0.38
• Shares Outstanding: 114,578,610
• 10 Day Avg. Volume: 736,062
• 30 Day Avg. Volume: 873,396
• PEG Ratio: -1.04
• Price to Book (P/B): 10.76
• Price to Sales (P/S): 7.52
• P/FCF Ratio: 5.86
• Enterprise Value/Market Cap: 0.44
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 2.79
• Enterprise Value/Ebitda: 12.39
• 1Y Price Target: $19.62
• Price Target Upside: 27.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 0.65
• Revenue Forecast (FY): $1.03B

• Rating: 72 Outperform
• Price Target: $15.50 ▲(0.85% Upside)

Accelerant Holdings Class A demonstrates strong financial performance and positive earnings call sentiment, driving the overall score. Technical analysis and valuation present some uncertainties, but the company's growth trajectory and robust cash flow position it well for future success.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and competitiveness.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, enabling strategic investments and providing a buffer against economic downturns.

Technology Investments

Investments in technology improve operational efficiency and product offerings, strengthening competitive advantage and customer satisfaction.

Negative Factors

FX Impact on Net Income

Negative FX impacts can reduce net income and create earnings volatility, affecting financial predictability and investor confidence.

Dependence on Specific Partners

Reliance on specific partners can pose risks if partnerships change, potentially disrupting revenue streams and strategic initiatives.

Margin Improvement Needs

Improving margins is crucial for sustaining profitability, as it affects the company's ability to reinvest in growth and withstand cost pressures.

Accelerant Holdings Class A Business Overview & Revenue Model

Company Description

Accelerant Holdings, together with its subsidiaries, operate a data-driven risk exchange that connects selected specialty insurance underwriters with risk capital partners. The Exchange Services segment consists of risk exchange, its operating platform that incorporates various technology, data ingestion, and agency operations that serve the needs of its members and risk capital partners. Its Risk capital partners write premiums directly through the Risk Exchange pay us a fixed-percentage, volume-based fee for sourcing, managing, and monitoring the business they write. The MGA Operations segment includes the fees earned by members, predominantly for originating and underwriting a portfolio of insurance policies, reduced by the expenses associated with providing services. The Underwriting segment is involved in underwriting insurance policies and assumption of reinsurance policies issued or accepted by consolidated insurance companies. Its Underwriting segment is a strategic asset that enables access to portfolio for current and prospective risk capital partners. The activities of insurance companies include property and casualty insurance, policy issuance, and reinsurance arrangements. The company focuses on small-to-medium sized commercial clients primarily in the United States, Europe, Canada, and the United Kingdom. The company was founded in 2018 and is based in Grand Cayman, the Cayman Islands.

How the Company Makes Money

Accelerant Holdings generates revenue primarily through the underwriting of insurance policies, where it collects premiums from policyholders in exchange for coverage against specified risks. The company employs a data-driven approach to assess risk accurately, which helps in setting competitive premium rates while maintaining profitability. Additionally, Accelerant may earn income through investment returns on the premiums it collects before claims are paid. Strategic partnerships with other insurance providers and technology firms also contribute to its revenue model, allowing for shared resources and expanded market reach. The ongoing development of proprietary technology and platforms may provide additional revenue opportunities through licensing or service fees.

Accelerant Holdings Class A Financial Statement Overview

Summary

Strong overall fundamentals: income statement shows significant revenue growth and a shift from net loss to net profit (Income Statement Score 82). Cash generation is a standout with robust free cash flow growth and strong conversion of earnings to cash (Cash Flow Score 88). Balance sheet is stable with moderate leverage and improving ROE, though margin improvement and leverage discipline remain areas to monitor (Balance Sheet Score 75).

Income Statement

Accelerant Holdings Class A has shown impressive revenue growth, with a significant increase in total revenue over the past year. The company has transitioned from a net loss to a net profit, indicating improved profitability. Gross profit margins remain strong, although there is room for improvement in EBIT and EBITDA margins. Overall, the income statement reflects a positive growth trajectory and improving profitability.

Balance Sheet

The balance sheet of Accelerant Holdings Class A shows a stable financial position with a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity has turned positive, reflecting improved efficiency in generating profits from shareholders' equity. The equity ratio is healthy, suggesting a strong capital structure. However, there is a need to maintain this stability to mitigate potential risks.

Cash Flow

The cash flow statement reveals robust free cash flow growth, demonstrating strong cash generation capabilities. The free cash flow to net income ratio is high, indicating efficient conversion of profits into cash. Operating cash flow has significantly increased, supporting the company's operational needs. Overall, the cash flow position is strong, providing a solid foundation for future investments and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	823.50M	584.64M	325.50M	213.10M	103.20M
Gross Profit	543.00M	335.94M	195.30M	78.60M	63.50M
EBITDA	122.20M	77.94M	-18.50M	-74.30M	-15.50M
Net Income	-1.40B	27.20M	-48.80M	-91.70M	-21.50M
Balance Sheet
Total Assets	7.86B	6.09B	3.74B	2.20B	1.16B
Cash, Cash Equivalents and Short-Term Investments	1.74B	1.29B	783.40M	509.00M	340.10M
Total Debt	121.90M	121.40M	120.30M	100.50M	49.90M
Total Liabilities	7.16B	5.67B	3.45B	1.85B	899.40M
Stockholders Equity	676.10M	408.70M	310.50M	354.50M	257.90M
Cash Flow
Free Cash Flow	615.70M	751.10M	257.30M	39.00M	98.00M
Operating Cash Flow	624.80M	785.50M	289.90M	65.70M	112.70M
Investing Cash Flow	-387.20M	-380.10M	-11.70M	-147.50M	-132.50M
Financing Cash Flow	323.20M	110.30M	10.30M	254.70M	233.70M

Accelerant Holdings Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARX	72 Outperform	$3.41B	―	―	―	―	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
EHTH	58 Neutral	$118.14M	98.65	5.88%	―	16.79%	―
SLQT	54 Neutral	$293.87M	-53.85	15.11%	―	13.16%	―
HUIZ	46 Neutral	$22.90M	9.27	4.56%	―	19.30%	-17.56%
GOCO	44 Neutral	$38.62M	-0.16	-142.05%	―	7.56%	-344.04%
TIRX	43 Neutral	$12.27M	-0.11	-11.18%	―	624.24%	85.46%