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Employers Holdings (EIG)
:EIG
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Employers Holdings
(NYSE:EIG)
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Rating:67Neutral
Price Target:
$43.00
▲(12.77% Upside)
Employers Holdings' overall stock score is driven by strong financial performance and a fair valuation. However, technical analysis indicates a bearish trend, and the earnings call highlighted significant challenges with California claims, impacting sentiment. The absence of capital expenditures raises concerns about future growth investments.
Positive Factors
Revenue Growth
Employers Holdings achieved a 7% revenue growth in Q3, driven by increased policy count and premium growth, indicating strong market demand and effective business strategies.
Balance Sheet Health
A debt-free balance sheet enhances financial stability, providing flexibility for strategic initiatives and resilience against economic downturns.
Cash Flow Management
Significant growth in operating cash flow demonstrates robust cash generation, supporting ongoing operations and potential future investments.
Negative Factors
California Claims Challenges
The surge in California cumulative trauma claims necessitates reserve adjustments, impacting profitability and highlighting regional risk exposure.
Reserve Adjustments
Significant reserve strengthening due to claim frequency increases affects financial results, indicating potential volatility in future earnings.
Lack of Capital Expenditures
Without capital expenditures, the company may face challenges in sustaining growth and competitiveness, potentially limiting long-term strategic opportunities.
Employers Holdings (EIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$843.64M
Dividend Yield2.99%
Average Volume (3M)139.56K
Price to Earnings (P/E)14.8
Beta (1Y)0.44
Revenue Growth1.69%
EPS Growth-52.43%
CountryUS
Employees715
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)-1.10
Shares Outstanding22,479,107
10 Day Avg. Volume159,467
30 Day Avg. Volume139,559
Financial Highlights & Ratios
PEG Ratio1.86
Price to Book (P/B)1.20
Price to Sales (P/S)1.46
P/FCF Ratio17.95
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue1.10
Enterprise Value/Gross Profit3.99
Enterprise Value/Ebitda12.85
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Employers Holdings Business Overview & Revenue Model
Company DescriptionEmployers Holdings, Inc. (EIG) is a specialty provider of workers' compensation insurance, primarily serving small to mid-sized businesses across various industries in the United States. The company operates through its subsidiaries, offering a range of insurance products and services designed to meet the unique needs of its clients. EIG focuses on delivering value through risk management, claims management, and comprehensive customer support, making it a notable player in the workers' compensation sector.
How the Company Makes MoneyEmployers Holdings generates revenue primarily through the underwriting of workers' compensation insurance policies. The company collects premiums from policyholders in exchange for providing insurance coverage, which constitutes its main revenue stream. Additionally, EIG earns investment income from the funds it holds, which are derived from accumulated premiums and reserves. The company also engages in risk management services and consulting, providing additional revenue through service fees. Strategic partnerships with agents and brokers help expand its market reach, while efficient claims management practices contribute to profitability by controlling costs associated with claims payouts.
Employers Holdings Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted positive developments such as an increase in gross written premiums, strategic capital returns, and the introduction of a new product line. However, these were balanced by significant challenges related to California cumulative trauma claims, which necessitated reserve adjustments and led to a quarterly adjusted net loss. The sentiment of the call reflects a cautious optimism with proactive steps being taken to manage current challenges.Q3-2025 Updates
Positive Updates
Increase in Gross Written Premium
Gross written premium increased by 1.4% compared to 2024 due to increases in renewal business premiums. Net premiums earned were $192.1 million compared to $186.6 million for the prior year, an increase of 3%.
Share Repurchase and Capital Returns
Announced a $125 million debt-funded recapitalization plan and an associated $125 million increase to the existing share repurchase authorization, expanding the share repurchase authority to $250 million. Returned $52.7 million to stockholders through dividends and share repurchases.
Launch of New Product Offering
Commenced the build-out of a new excess workers' compensation offering with plans to start accepting submissions in early 2026, leveraging existing expertise and systems.
Net Investment Income and Gains
Earned $26.1 million of net investment income during the quarter. Net realized and unrealized gains on investments increased to $21.2 million compared to $10.9 million for the prior quarter.
Negative Updates
Increase in Loss and LAE Reserves
Increased prior year reserves by $38.2 million due to the increased frequency of California cumulative trauma claims, with the 2025 loss and LAE ratio increased to 72%.
Impact on Adjusted Net Income
Adjusted net loss was $25.5 million compared to adjusted net income of $20.2 million a year ago, largely impacted by the adjustment in reserves for cumulative trauma claims.
Challenges with California CT Claims
Increased frequency of California cumulative trauma claims affecting reserves, with 90% of CT claims being litigated. This has led to significant reserve strengthening and proactive mitigation strategies.
Company Guidance
During the Q3 2025 earnings call, Employers Holdings, Inc. provided detailed guidance on their financial performance and strategic initiatives. The company reported a 1.4% increase in gross written premiums to $183.9 million, largely driven by renewal business premium growth. Net premiums earned rose by 3% to $192.1 million. However, their losses and loss adjustment expenses surged to $186.6 million, up from $117.7 million a year ago, primarily due to increased cumulative trauma (CT) claims in California. The company adjusted its accident year 2025 loss and LAE ratio to 72% from 69% to account for these claims. Employers Holdings highlighted a $125 million debt-funded recapitalization plan, increasing its share repurchase authorization to $250 million, with $65 million already utilized. The company also announced an expansion into the excess workers' compensation market, aiming for submissions by early 2026. They emphasized aggressive claims handling and litigation management, particularly in the California CT environment, while maintaining a commitment to providing care for injured workers. The company declared a fourth-quarter dividend of $0.32 per share and remains optimistic about future prospects, despite current challenges.Employers Holdings Financial Statement Overview
Summary
Employers Holdings demonstrates strong financial performance with consistent revenue and profit growth, a robust balance sheet free of debt, and efficient cash flow management. The company is well-positioned in the insurance industry, with stable margins and a strategic cash position. However, the absence of capital expenditures raises questions about future growth investments.Income Statement
Employers Holdings shows a solid revenue growth rate of 3.51% from 2023 to 2024, indicating a positive trajectory. The company maintains a strong gross profit margin at 100% due to its business model, which is typical in the insurance industry. The net profit margin remains stable at around 13.47% in 2024. However, the absence of EBITDA data for 2024 limits a complete profitability analysis. Overall, the income statement reflects a healthy financial position with consistent growth and profitability.74
Positive
Balance Sheet
Employers Holdings has a strong balance sheet with no total debt reported in 2024 and a debt-to-equity ratio of 0, indicating no reliance on leverage. The equity ratio of 30.18% in 2024 shows a solid equity base. ROE is stable at 11.10% in 2024, suggesting efficient use of shareholder equity to generate profits. The company's financial stability is reinforced by a significant cash position, enhancing its ability to manage liabilities effectively.82
Very Positive
Cash Flow
The company exhibits a significant growth in operating cash flow from 2023 to 2024, increasing by 75.51%, which is a positive indicator of cash-generating capability. The free cash flow to net income ratio is strong at 73.10% in 2024, reflecting efficient cash flow management. However, the absence of capital expenditures in 2024 raises questions about future investment in growth. Overall, the cash flows indicate robust operational performance with strategic cash usage.71
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 904.80M | 880.70M | 850.90M | 713.50M | 703.10M | 711.40M |
| Gross Profit | 249.60M | 323.30M | 345.20M | 226.60M | 311.80M | 330.20M |
| EBITDA | 77.50M | 150.40M | 159.00M | 64.60M | 154.90M | 156.30M |
| Net Income | 62.50M | 118.60M | 118.10M | 48.40M | 119.30M | 119.80M |
Balance Sheet | ||||||
| Total Assets | 3.53B | 3.54B | 3.55B | 3.72B | 3.78B | 3.92B |
| Cash, Cash Equivalents and Short-Term Investments | 1.09B | 1.02B | 913.20M | 2.39B | 2.43B | 2.67B |
| Total Debt | 4.10M | 4.20M | 5.90M | 196.10M | 16.60M | 39.90M |
| Total Liabilities | 2.49B | 2.47B | 2.54B | 2.77B | 2.57B | 2.71B |
| Stockholders Equity | 1.04B | 1.07B | 1.01B | 944.20M | 1.21B | 1.21B |
Cash Flow | ||||||
| Free Cash Flow | 53.40M | 71.50M | 47.20M | 97.20M | 7.20M | 27.50M |
| Operating Cash Flow | 57.10M | 76.40M | 49.40M | 99.80M | 10.80M | 33.00M |
| Investing Cash Flow | 97.40M | -159.70M | 377.30M | -146.10M | -1.70M | 84.30M |
| Financing Cash Flow | -131.00M | -74.80M | -289.50M | 60.40M | -94.40M | -111.90M |
Employers Holdings Technical Analysis
Positive
38.13
Price Trends
40.00
Positive
41.02
Positive
44.22
Negative
Market Momentum
0.37
Negative
68.68
Neutral
91.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EIG, the sentiment is Positive. The current price of 38.13 is below the 20-day moving average (MA) of 39.73, below the 50-day MA of 40.00, and below the 200-day MA of 44.22, indicating a neutral trend. The MACD of 0.37 indicates Negative momentum. The RSI at 68.68 is Neutral, neither overbought nor oversold. The STOCH value of 91.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EIG.
Employers Holdings Risk Analysis
Employers Holdings disclosed 22 risk factors in its most recent earnings report. Employers Holdings 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
Employers Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $472.95M | 13.18 | 13.12% | 4.21% | 13.47% | 26.15% | |
72 Outperform | $786.69M | 15.92 | 16.95% | 6.53% | -1.73% | -18.36% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $843.64M | 14.77 | 5.86% | 2.99% | 1.69% | -52.43% | |
64 Neutral | $708.06M | 16.51 | 10.46% | 1.34% | 4.44% | 22.40% | |
63 Neutral | $898.26M | -85.19 | 25.65% | ― | 34.48% | ― | |
60 Neutral | $310.27M | ― | -6.97% | 0.59% | -19.08% | 56.21% |
* Financial Sector Average
EIG
Employers Holdings
42.11
-9.01
-17.63%
AMSF
Amerisafe
39.18
-11.18
-22.20%
ITIC
Investors Title Company
250.56
-6.27
-2.44%
TIPT
Tiptree Financial
17.92
-3.36
-15.79%
JRVR
James River Group
6.75
2.16
47.06%
HIPO
Hippo Holdings
31.07
2.85
10.10%
Employers Holdings Corporate Events
Stock BuybackDividendsFinancial Disclosures
Employers Holdings Declares Dividend Amid Financial Adjustments
Neutral
Oct 30, 2025
On October 29, 2025, Employers Holdings, Inc. declared a regular quarterly dividend of $0.32 per share, payable on November 26, 2025. The company also approved a $125 million increase to its share repurchase program, intending to fund this through various debt sources. The third quarter of 2025 saw the company report a net loss of $8.3 million, despite a 1% increase in gross premiums written and a 3% increase in net premiums earned. The company took significant actions to strengthen its reserves, particularly addressing increases in California cumulative trauma claims. The recapitalization plan is expected to optimize capital structure, reduce cost of capital, and enhance shareholder value.
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.