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Employers Holdings (EIG)
:EIG
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Employers Holdings
(NYSE:EIG)
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Rating:72Outperform
Price Target:―
Employers Holdings showcases a strong financial foundation with significant revenue and profit growth, underpinned by a debt-free balance sheet and efficient cash management. While technical indicators suggest stability, valuation metrics reflect an attractive investment opportunity. The recent earnings call provides a balanced view of growth potential and challenges, resulting in an overall encouraging but cautious outlook.
Positive Factors
Strong Balance Sheet
A debt-free balance sheet enhances financial stability, allowing the company to navigate economic fluctuations and invest in growth opportunities without the burden of interest payments.
Record Policy Growth
Achieving record policy growth indicates strong market demand and effective sales strategies, which can lead to increased revenue and market share over time.
Increase in Net Investment Income
A significant rise in investment income enhances profitability and provides additional financial resources to support strategic initiatives and shareholder returns.
Negative Factors
Flat Net Premium Growth
Flat net premium growth suggests challenges in expanding the customer base or increasing policy pricing, potentially limiting revenue growth and profitability.
Increased Loss Ratios
Rising loss ratios indicate higher claims costs, which can pressure profit margins and require adjustments in underwriting or pricing strategies to maintain financial performance.
Unrealized Investment Losses
Unrealized investment losses can affect reported earnings and shareholder equity, potentially impacting investor perception and financial flexibility.
Employers Holdings (EIG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$843.64M
Dividend Yield3.04%
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 Profit9.63
Enterprise Value/Ebitda14.35
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 publicly traded company specializing in workers' compensation insurance products and services primarily for small businesses in low to medium hazard industries. The company operates predominantly in the United States and is known for its focus on safety and risk management, offering policies that help employers protect their businesses and employees from workplace-related injuries and illnesses.
How the Company Makes MoneyEmployers Holdings, Inc. generates revenue primarily through the underwriting and sale of workers' compensation insurance policies. The company's revenue model is based on collecting premiums from policyholders, which are calculated based on factors such as the size of the payroll, industry classification, and claims history of the insured businesses. In addition to premiums, EIG also earns investment income from the reserves held to pay future claims. The company's profitability is influenced by its ability to effectively manage claims costs, administrative expenses, and investment returns. Strategic partnerships with independent insurance agencies and brokers are also crucial in expanding EIG's market reach and customer base.
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 across income, balance sheet, and cash flow statements. Revenue growth is steady, the balance sheet is robust with no debt, and cash flow management is efficient, although lack of capital expenditures could impact future growth.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 | 103.40M | 424.50M | 850.90M | 713.50M | 703.10M | 711.40M |
| EBITDA | 69.40M | 146.80M | 0.00 | 627.20M | 169.10M | 165.30M |
| 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 | 2.55B | 1.02B | 913.20M | 208.30M | 85.60M | 187.00M |
| Total Debt | 0.00 | 4.30M | 5.90M | 182.50M | 16.60M | 20.00M |
| 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 | 55.40M | 71.50M | 47.20M | 97.20M | 7.20M | 27.80M |
| Operating Cash Flow | 57.10M | 76.40M | 49.40M | 99.80M | 10.80M | 33.30M |
| 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 | -112.20M |
Employers Holdings Technical Analysis
Negative
38.13
Price Trends
41.56
Negative
42.98
Negative
45.66
Negative
Market Momentum
-1.14
Positive
38.11
Neutral
33.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EIG, the sentiment is Negative. The current price of 38.13 is below the 20-day moving average (MA) of 40.44, below the 50-day MA of 41.56, and below the 200-day MA of 45.66, indicating a bearish trend. The MACD of -1.14 indicates Positive momentum. The RSI at 38.11 is Neutral, neither overbought nor oversold. The STOCH value of 33.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $533.99M | 14.88 | 13.12% | 5.77% | 13.47% | 26.15% | |
72 Outperform | $843.64M | 14.77 | 5.86% | 3.04% | 1.69% | -52.43% | |
72 Outperform | $759.06M | 15.36 | 16.95% | 11.37% | -1.73% | -18.36% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
60 Neutral | $691.80M | 16.13 | 10.46% | 2.77% | 4.44% | 22.40% | |
55 Neutral | $898.26M | -85.19 | 25.65% | ― | 34.48% | ― | |
51 Neutral | $255.11M | ― | -6.97% | 0.72% | -19.08% | 56.21% |
* Financial Sector Average
EIG
Employers Holdings
38.27
-13.72
-26.39%
AMSF
Amerisafe
40.06
-14.20
-26.17%
ITIC
Investors Title Company
274.54
37.20
15.67%
TIPT
Tiptree Financial
18.28
-3.20
-14.90%
JRVR
James River Group
5.31
-1.19
-18.31%
HIPO
Hippo Holdings
34.60
6.45
22.91%
Employers Holdings Corporate Events
Executive/Board Changes
Employers Holdings Appoints Marvin Pestcoe to Board
Neutral
Mar 3, 2025
On March 3, 2025, Employers Holdings, Inc. announced the appointment of Marvin Pestcoe to its Board of Directors, where he will also serve on the Audit Committee and the Board Governance and Nominating Committee. Pestcoe brings over 40 years of experience in insurance, reinsurance, and investments, having held executive roles at Langhorne Re, Partner Re, and Swiss Re New Markets. His extensive expertise is expected to significantly benefit the company. Concurrently, long-serving board members Michael J. McSally and James R. Kroner announced their retirement from the board, effective the same day, after years of distinguished service.
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.