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Employers Holdings Inc (EIG)
NYSE:EIG
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Employers Holdings
(NYSE:EIG)
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Rating:69Neutral
Price Target:
$49.00
▲(21.89% Upside)
Action:ReiteratedDate:01/13/26
The score is anchored by strong financial stability (very low leverage) but is held back by weakened recent profitability/cash-flow momentum and earnings-call risk from California cumulative trauma reserve pressures. Technicals are supportive with the stock above key moving averages, while valuation is broadly reasonable with a moderate dividend yield.
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
$903.66M
Dividend Yield2.94%
Average Volume (3M)139.56K
Price to Earnings (P/E)85.4
Beta (1Y)0.43
Revenue Growth1.69%
EPS Growth-52.43%
CountryUS
Employees715
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.66
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 Cap-1.64
Enterprise Value/Revenue-1.64
Enterprise Value/Gross Profit-5.95
Enterprise Value/Ebitda-19.17
Forecast
1Y Price Target
$49.00Price Target Upside21.89% Upside
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., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. It offers workers' compensation insurance to small businesses in low to medium hazard industries. The company markets its products through independent local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Reno, Nevada.
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:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The call balanced clear strategic and capital-strength positives — including significant share repurchases and dividends, an 11% increase in book value per share, expense ratio improvement (down 180 bps), stronger investment yields, a new AI-enabled excess workers’ compensation product with promising early results, and an A rating — against meaningful near-term underwriting headwinds: an 11% decline in gross written premium, an 18.7% increase in losses and LAE, an approximately 49.5% drop in adjusted net income, and a $40M after-tax realized investment loss that depressed quarterly results. Management emphasized disciplined underwriting, targeted California actions, and AI-driven efficiency to restore profitability, but some top-line and underwriting pressure remains and could depress 2026 written premium.Q4-2025 Updates
Positive Updates
Capital Return and Share Repurchases
Returned $215,000,000 to stockholders in 2025 through share repurchases and dividends; repurchased ~2.4M shares in Q4 for $97,000,000 at an average price of $40.94 (≈20% discount to book value) and repurchased an additional 898,594 shares Jan–Feb at $44.28; completed $125,000,000 recapitalization in January; remaining repurchase authorization $53,100,000; Board declared Q1 2026 dividend of $0.32 per share.
Book Value Growth
Book value per share (including gain) increased 11% to $51.31, reflecting capital actions and operational performance.
Expense Ratio Improvement
Expense ratio improved by 180 basis points to 21.7% for 2025, driven by expense management and AI-enabled efficiency initiatives.
Investment Income and Portfolio Rebalancing
Net investment income increased 17.6% to $31.4M (from $26.7M). Weighted average book yield rose to 4.9% from 4.5% (net +40 bps). Investment rebalancing extracted an estimated net present value gain of $16.0M, reduced equity allocation toward target and increased portfolio yield.
Underwriting Expense Reduction
Underwriting expenses decreased 10.0% to $39.8M (from $44.2M) due primarily to expense management including reduced personnel and lower variable costs.
New Product Launch — Excess Workers' Compensation
Launched an excess workers’ compensation product leveraging core expertise and AI to accelerate underwriting and submissions; early market response strong. Management targets this product to reach ~10% of overall written premium over a multi-year horizon (4–7 years) and expects a mid-80s combined ratio at scale with relatively favorable expense and loss characteristics versus guaranteed cost business.
AI Adoption Driving Operational Gains
Aggressive AI adoption accelerated product development and claims platform enhancements (40–50 identified claims use cases, agentic assistants, transcription + LLM workflows), enabling faster launches and expected long-term expense savings and productivity gains.
Financial Strength Rating Reaffirmed
A.M. Best reaffirmed the insurance companies’ financial strength rating of A, supporting the company’s balance-sheet strength and capital strategy.
Negative Updates
Decline in Gross Premiums Written
Gross premiums written fell 11.0% year-over-year to $156.8M from $176.3M, driven by lower new business writings and reduced final audit premiums (partially offset by higher renewal business premium). Management expects written premium to decline in 2026 due to California pricing and underwriting actions.
Increase in Losses and LAE
Losses and loss adjustment expenses rose 18.7% to $134.4M (from $113.2M), primarily due to an increase in the selected accident year 2025 loss and LAE ratio and the absence of favorable development in the quarter.
Adjusted Net Income Decline
Adjusted net income (excl. realized/unrealized investment gains/losses and LPT deferred gain amortization) declined to $14.5M from $28.7M year-over-year, a decrease of approximately 49.5%, reflecting underwriting pressure and fewer favorable reserve developments.
Realized Investment Loss Impacting Quarterly Results
Sale of low-yielding fixed income securities as part of rebalancing produced an after-tax realized loss of $40.0M, which reduced net income and adjusted book value per share during the quarter (though shareholders' equity and book value per share were not impacted by the rebalancing overall).
Elevated California Cumulative Trauma (CT) Claims
CT claim frequency remains elevated in California; while acceleration has flattened, CT incidence is still high versus historical levels. Management has implemented California-specific rate increases and tightened underwriting, actions likely to reduce written premium and limit growth in that state.
Commission Expense Increase and Competitive Pressure
Commission expense increased 5.7% to $25.8M (driven by nonrecurring adjustments). Management noted the market remains competitive nationally even as certain state markets (notably parts of the West) are hardening, and competitors are still taking share in some segments.
Equity Allocation Above Target Prior to Rebalancing
Equity investments had appreciated to 16% of the investment portfolio versus a target allocation of ~10%, requiring rebalancing that generated realized losses to align allocation and raise portfolio yield.
Company Guidance
The company guided that written premium will likely decline in 2026 as California-specific cumulative trauma pricing and tighter underwriting take hold, even as renewal payrolls were basically flat and renewal rates rose a little over 5% in Q4; management expects the expense ratio to continue improving from 21.7% (down 180 bps in 2025) driven by AI initiatives. Capital actions will remain opportunistic: the firm completed $215.0M of share repurchases and regular dividends in 2025, repurchased ~2.4M shares in Q4 for $97.0M at an average $40.94 and a further 898,594 shares at $44.28 through Feb 18, leaving $53.1M of buyback authorization and an expectation of a return to more normal repurchase levels in 2026; the Board also declared a Q1 2026 dividend of $0.32 per share (record Mar 4, payable Mar 18). Management reiterated solid reserving (book value per share up 11% to $51.31), and said the new excess workers’ comp product targets a mid‑80s combined ratio and could represent roughly 10% of written premium over 4–7 years. Finally, the investment rebalancing raised weighted‑average book yield to 4.9% (from 4.5%), increased portfolio yield by ~40 bps, reduced equity allocation (equities ~16% vs ~10% target), extracted an estimated NPV gain of $16M and incurred an after‑tax realized fixed‑income loss of $40M.Employers Holdings Financial Statement Overview
Summary
Exceptionally conservative balance sheet (minimal debt vs. >$1B equity) provides strong resilience, but recent operating results have softened: TTM profitability and margins stepped down meaningfully vs. 2024 and free cash flow declined ~28.5% despite remaining positive.Income Statement
Revenue has been relatively steady with modest growth (TTM (Trailing-Twelve-Months) up ~1.7% vs. 2024 up ~3.5%), but profitability has weakened meaningfully in TTM: net margin fell to ~6.9% from ~13.5% in 2024 and operating profitability also compressed (EBIT margin ~8.5% vs. ~16.7% in 2024). Longer-term results show the business can generate solid profits (2020–2024 generally strong), but the latest TTM step-down is a notable near-term concern.62
Positive
Balance Sheet
The balance sheet is very conservatively levered: total debt is minimal (~$4.1M in TTM (Trailing-Twelve-Months)) against over $1.0B of equity, translating to extremely low leverage (debt-to-equity ~0.004). Assets and equity have been stable, supporting financial flexibility. Return on equity is positive but has cooled in TTM (~5.9%) versus 2024 (~11.1%), reflecting the recent earnings pressure rather than balance-sheet risk.90
Very Positive
Cash Flow
Cash generation remains positive, with TTM (Trailing-Twelve-Months) operating cash flow of ~$57.1M and free cash flow of ~$53.4M. Free cash flow tracks net income well (TTM free cash flow at ~94% of net income), which is a clear strength. However, free cash flow declined sharply versus the prior period (TTM growth ~-28.5%), signaling weaker cash momentum despite continued profitability.58
Neutral
| 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
Negative
40.20
Price Trends
43.38
Negative
41.69
Negative
43.11
Negative
Market Momentum
-0.90
Positive
35.60
Neutral
29.03
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 40.2 is below the 20-day moving average (MA) of 43.17, below the 50-day MA of 43.38, and below the 200-day MA of 43.11, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 35.60 is Neutral, neither overbought nor oversold. The STOCH value of 29.03 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $424.46M | 11.66 | 13.12% | 4.20% | 13.47% | 26.15% | |
73 Outperform | $704.93M | 14.30 | 16.95% | 6.64% | -1.73% | -18.36% | |
69 Neutral | $903.66M | 85.41 | 5.86% | 2.94% | 1.69% | -52.43% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $627.50M | 14.70 | 10.46% | 1.31% | 4.44% | 22.40% | |
63 Neutral | $730.92M | 7.82 | 25.65% | ― | 34.48% | ― | |
60 Neutral | $306.59M | -3.21 | -6.97% | 0.63% | -19.08% | 56.21% |
* Financial Sector Average
EIG
Employers Holdings
40.20
-9.15
-18.55%
AMSF
Amerisafe
37.25
-10.56
-22.10%
ITIC
Investors Title Company
224.87
-2.56
-1.13%
TIPT
Tiptree Financial
16.59
-5.13
-23.62%
JRVR
James River Group
6.67
1.93
40.72%
HIPO
Hippo Holdings
28.85
0.98
3.52%
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.
The most recent analyst rating on (EIG) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Employers Holdings stock, see the EIG Stock Forecast page.
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.