Enstar Group (ESGR) AI Stock Analysis

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Enstar Group

(NASDAQ:ESGR)

77Outperform

Enstar Group's financial stability, marked by strong profitability, effective cash flow management, and zero leverage risk, forms a solid foundation. Its technical indicators suggest a positive trend, though potential overbought conditions should be monitored. The low P/E ratio indicates undervaluation, making the stock appealing to value investors. Overall, the company exhibits a robust financial position with good growth prospects, though revenue volatility needs attention.

Enstar Group (ESGR) vs. S&P 500 (SPY)

Market Cap

$4.97B

Dividend YieldN/A

Average Volume (3M)118.65K

Price to Earnings (P/E)9.3

Beta (1Y)0.43

Revenue Growth-15.68%

EPS Growth-47.11%

CountryUS

Employees790

SectorFinancial

Sector Strength81

IndustryInsurance - Diversified

Share Statistics

EPS (TTM)35.99

Shares Outstanding14,885,357

10 Day Avg. Volume114,195

30 Day Avg. Volume118,653

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)N/A

Price to Sales (P/S)4.10

Price to Cash Flow (P/CF)10.10

P/FCF Ratio9.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Enstar Group Business Overview & Revenue Model

Company DescriptionEnstar Group Limited (ESGR) is a global insurance group that specializes in acquiring and managing insurance and reinsurance companies in run-off. Established in Bermuda, Enstar focuses on providing innovative capital release solutions to insurers and reinsurers. The company operates across various sectors, including property and casualty insurance, life insurance, and other specialty insurance sectors, offering tailored solutions to optimize financial performance and risk management.

How the Company Makes MoneyEnstar Group makes money primarily through the acquisition and management of insurance and reinsurance portfolios in run-off, which involves assuming the liabilities of these portfolios and managing them to achieve profitable run-off. The company generates revenue from the investment income earned on the reserves and surplus associated with the acquired portfolios. Additionally, Enstar may enhance its earnings through strategic claims management, expense reduction, and capital optimization techniques. The company also enters into reinsurance agreements and other risk-transfer solutions to optimize its risk profile and profitability. Significant partnerships with insurers and reinsurers can contribute to its revenue streams by providing opportunities for portfolio acquisitions and collaborative risk management solutions.

Enstar Group Financial Statement Overview

Summary

Enstar Group demonstrates strong profitability and cash flow generation, important for stability in the insurance industry. The lack of debt is a significant advantage, reducing financial risk. However, revenue volatility and fluctuations in equity require monitoring. Overall, the company is financially solid with a positive growth trajectory.

Income Statement

Positive

Enstar Group shows strong profitability with a Net Profit Margin of 44.8% and a Gross Profit Margin of 100% for 2024. The Revenue Growth Rate is 4.51%, indicating a positive growth trend. However, the company has faced volatility in revenues as seen in previous years, which could be a risk factor. The EBIT margin for 2024 stands at 67.6%, reflecting efficient cost management.

Balance Sheet

Positive

The company has a solid equity base with an Equity Ratio of 29.8% for 2024. The Debt-to-Equity Ratio is 0, indicating no leverage risk, which is a positive aspect in terms of financial stability. Return on Equity is a robust 8.86%, showcasing efficient use of equity. However, fluctuations in equity levels over the years suggest some volatility.

Cash Flow

Positive

The Free Cash Flow to Net Income Ratio is a healthy 0.9 for 2024, indicating strong cash generation relative to profits. The Operating Cash Flow to Net Income Ratio is 0.9, showcasing effective cash flow management. Though there was a decrease in Operating Cash Flow compared to the previous year, Free Cash Flow remains strong, highlighting resilience.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.21B	1.15B	-1.08B	864.00M	2.54B
	Gross Profit
1.21B	1.43B	-1.08B	864.00M	2.54B
	EBIT
814.00M	770.00M	-789.00M	500.00M	1.78B
	EBITDA
1.55B	1.16B	-665.00M	685.00M	1.61B
	Net Income Common Stockholders
540.00M	1.12B	-871.00M	538.00M	1.76B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.00B	832.00M	6.10B	7.34B	4.57B
	Total Assets
20.41B	20.91B	22.15B	24.43B	21.65B
	Total Debt
1.83B	1.83B	2.32B	1.69B	1.37B
	Net Debt
735.00M	1.00B	1.50B	45.00M	472.11M
	Total Liabilities
14.31B	15.27B	17.19B	17.92B	14.59B
	Stockholders Equity
6.09B	5.54B	4.70B	6.10B	6.67B
Cash Flow		Free Cash Flow
483.00M	523.00M	257.00M	3.80B	2.79B
	Operating Cash Flow
483.00M	523.00M	257.00M	3.80B	2.79B
	Investing Cash Flow
286.00M	-148.00M	-919.00M	-2.57B	-2.34B
	Financing Cash Flow
-42.00M	-861.00M	-116.00M	-737.00M	117.41M

Enstar Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price333.70

Price Trends

50DMA

332.29

Positive

100DMA

328.96

Positive

200DMA

326.32

Positive

Market Momentum

MACD

0.61

Negative

RSI

55.80

Neutral

STOCH

76.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESGR, the sentiment is Positive. The current price of 333.7 is above the 20-day moving average (MA) of 332.84, above the 50-day MA of 332.29, and above the 200-day MA of 326.32, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 55.80 is Neutral, neither overbought nor oversold. The STOCH value of 76.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESGR.

Enstar Group Risk Analysis

Enstar Group disclosed 57 risk factors in its most recent earnings report. Enstar Group 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

Enstar Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESGR	77 Outperform	$4.97B	9.27	9.91%	―	-15.68%	-47.11%
IGIC	75 Outperform	$1.12B	8.35	22.41%	0.34%	13.29%	17.14%
ORI	74 Outperform	$9.50B	12.55	14.17%	2.86%	10.83%	20.74%
FIHL	70 Outperform	$1.84B	16.75	4.63%	2.42%	-32.79%	-94.89%
AIG	68 Neutral	$47.41B	16.28	7.10%	1.94%	-28.56%	1.14%
AEG	63 Neutral	$10.00B	14.19	9.36%	4.66%	-5.03%	―
Sector *	63 Neutral	$12.33B	9.59	8.02%	79.26%	12.87%	-4.61%

* Financial Sector Average

Performance Comparison

ESGR

Enstar Group

333.70

45.40

15.75%

AEG

Aegon

6.45

0.55

9.32%

AIG

American International Group

81.22

8.26

11.32%

ORI

Old Republic International

37.28

9.68

35.07%

IGIC

International General Insurance Holdings

24.87

11.73

89.27%

FIHL

Fidelis Insurance Holdings Ltd.

16.47

-2.57

-13.50%

Enstar Group Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: 0.30% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call conveyed a generally positive sentiment, highlighting strong financial metrics, strategic expansions, and robust capital positions, despite some adverse developments and unrealized losses.

Highlights

Strong Return on Equity

Enstar achieved a return on equity (ROE) of 2.4% and an adjusted ROE of 2.6% in Q1 2024.

Growth in Book Value

Book value grew by 1.7%, with fully diluted book value per share increasing by 1.4% to $349.41 and $341.53, respectively.

Positive Total Investment Returns

Total investment returns amounted to $222 million, driven by $160 million of net investment income and favorable returns on noncore equity of $104 million.

Strategic Expansion with SiriusPoint

Enstar announced a loss portfolio transfer agreement with SiriusPoint, reinsuring $400 million of workers' compensation business.

Strong Capital Position

Enstar's capital and liquidity position remains strong with a group capital solvency ratio of 195% and a fully unutilized $800 million revolving credit agreement.

S&P Rating Endorsement

Cavello Bay, Enstar's primary reinsurer, received an A rating with a stable outlook from S&P, recognizing Enstar's leadership in the legacy market.

Lowlights

Adverse Development in Environmental and Casualty Lines

The company experienced adverse development in environmental and casualty lines due to larger losses on excess policies.

Unrealized Losses Impact Book Value

Cumulative unrealized loss and fair value changes in the maturity portfolio and funds held stand at $789 million, adversely impacting book value by approximately $54 per share.

Company Guidance

During the Q1 2024 earnings call for Enstar (ESGR), the executives provided guidance highlighting several key metrics. The company achieved a return on equity (ROE) of 2.4% and an adjusted ROE of 2.6%, with a notable 1.7% growth in book value and a 1.4% increase in fully diluted book value per share, bringing them to $349.41 and $341.53, respectively. Enstar reported $119 million in net income attributable to ordinary shareholders, driven by $222 million in total investment returns and $160 million in net investment income. The company also recorded $24 million in runoff liability earnings, demonstrating their robust claims management capabilities. Despite a cumulative unrealized loss of $789 million impacting book value by approximately $54 per share, Enstar's capital position remains strong with an estimated group capital solvency ratio of 195% and an $800 million revolving credit facility fully available. These metrics reflect Enstar's strategic focus on delivering value through disciplined legacy solutions and managing macroeconomic challenges effectively.

Enstar Group Corporate Events

Executive/Board Changes

Enstar Group Launches 2025 Incentive Compensation Program

Neutral

Mar 3, 2025

On February 27, 2025, Enstar Group Limited’s Board of Directors approved a new Annual Incentive Compensation Program for 2025, following the expiration of the previous program at the end of 2024. This program, managed by the Compensation Committee, will offer cash bonuses to senior executives and other participants based on various performance and management factors, with awards determined within 60 days after the year-end.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.