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Fidelis Insurance Holdings Ltd. (FIHL)
NYSE:FIHL
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Fidelis Insurance Holdings Ltd.
(NYSE:FIHL)
70Outperform
Positive Factors
Earnings
Fidelis Insurance Holdings Ltd. reported operating EPS of $0.92, beating both analyst estimates and consensus.
Financial Performance
Gross written premiums increased 22% in the quarter, beating our +11% projection, with strong growth in both Reinsurance and Insurance.
Market Position
Fidelis is well-positioned to benefit from prevailing hard market conditions in specialty insurance and reinsurance lines.
Negative Factors
Expense Management
Higher expense ratio and novel capital structure of Fidelis are expected to take time for some investors to get comfortable valuing.
Financial Challenges
The uniqueness of Fidelis’ bifurcated balance sheet/MGU structure has caused investors to exercise caution.
Operational Challenges
Fidelis announced surprise 4Q reserve additions for aviation/war claims of ~$287m, which negatively impacts the 2024 full year operating RoE by ~8pts, to an estimated ~5%.
Fidelis Insurance Holdings Ltd. (FIHL) vs. S&P 500 (SPY)
Market Cap
$1.75B
Dividend Yield2.65%
Average Volume (3M)767.01K
Price to Earnings (P/E)15.9
Beta (1Y)0.50
Revenue Growth-32.79%
EPS Growth-94.89%
CountryUS
Employees98
SectorFinancial
Sector Strength79
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)0.93
Shares Outstanding111,773,340
10 Day Avg. Volume626,668
30 Day Avg. Volume767,006
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.53
Price to Cash Flow (P/CF)2.20
P/FCF Ratio2.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.22Price Target Upside27.54% Upside
Rating ConsensusHold
Number of Analyst Covering9
Fidelis Insurance Holdings Ltd. Business Overview & Revenue Model
Company DescriptionFidelis Insurance Holdings Ltd. (FIHL) is a global provider of specialty insurance and reinsurance solutions. The company focuses on offering a range of bespoke insurance products across various sectors, including property, energy, marine, and aviation. By leveraging deep industry expertise and a strong underwriting approach, FIHL delivers tailored risk management solutions to meet the specific needs of its clients.
How the Company Makes MoneyFidelis Insurance Holdings Ltd. makes money primarily through underwriting premiums for insurance and reinsurance products. The company generates revenue by assessing and pricing risk for its clients and charging premiums accordingly. FIHL's key revenue streams include premiums from direct insurance contracts and reinsurance agreements, where it assumes part of the risk from other insurance companies. Additionally, the company invests the premiums received in various financial instruments to earn investment income, which contributes to its overall profitability. Significant partnerships with brokers and strategic alliances with other insurers enhance its market reach and support revenue growth.
Fidelis Insurance Holdings Ltd. Financial Statement Overview
Summary
Fidelis Insurance Holdings Ltd. displays a robust financial health profile despite revenue challenges. The income statement shows moderate profitability with a net income margin of 4.68%. The balance sheet is solid, with low leverage and a strong equity position. Cash flow metrics are particularly strong, indicating effective capital management and liquidity.Income Statement
Fidelis Insurance Holdings Ltd. has experienced volatility in its revenue and net income over the years. The latest annual revenue shows a decline from the previous year, but the company managed to maintain profitability with a net income margin of approximately 4.68% in the latest year. Despite this, the absence of EBIT in the most recent year suggests operational challenges. The company's EBITDA margin stands at 6.45%, indicating moderate operational efficiency.72
Positive
Balance Sheet
The company maintains a strong equity position with an equity ratio of approximately 20.81%, showcasing a stable financial foundation. The debt-to-equity ratio is low at 0.18, indicating prudent financial leverage and a conservative capital structure. However, a reduction in total assets compared to the previous year highlights the need for careful asset management.75
Positive
Cash Flow
Fidelis Insurance Holdings Ltd. demonstrates robust cash flow management with a significant operating cash flow to net income ratio of 5.45, reflecting strong cash generation capabilities relative to earnings. The free cash flow has shown substantial growth, indicating effective capital expenditure management and liquidity position. The free cash flow to net income ratio is a healthy 5.41, further supporting the company's strong cash flow stance.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.30B | 2.42B | 3.59B | 1.50B | 1.19B | 782.60M | Gross Profit |
| 2.30B | 2.42B | 3.60B | 1.50B | 1.19B | 782.60M | EBIT |
| 687.20M | 0.00 | 2.09B | 1.65B | 67.70M | 114.70M | EBITDA |
| 309.90M | 156.20M | 2.08B | 119.50M | 118.60M | 154.00M | Net Income Common Stockholders |
| 463.80M | 113.30M | 2.13B | 1.65B | 68.30M | 126.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 1.11B | 1.32B | 3.30B | 2.83B | 2.52B | Total Assets |
| 0.00 | 11.77B | 7.68B | 8.07B | 7.05B | 5.32B | Total Debt |
| 0.00 | 448.90M | 514.60M | 476.00M | 478.30M | 456.50M | Net Debt |
| 0.00 | -294.10M | -264.20M | -514.50M | 153.20M | -510.70M | Total Liabilities |
| -2.02B | 9.32B | 5.23B | 6.27B | 5.03B | 3.34B | Stockholders Equity |
| 2.02B | 2.45B | 2.45B | 1.80B | 2.01B | 1.98B |
| Cash Flow | Free Cash Flow | ||||
| 681.00M | 613.60M | 488.80M | 724.10M | 356.00M | 314.10M | Operating Cash Flow |
| 689.50M | 618.20M | 495.20M | 742.90M | 363.10M | 316.10M | Investing Cash Flow |
| -364.80M | -475.80M | -834.90M | 214.40M | -1.11B | -481.30M | Financing Cash Flow |
| -142.70M | -153.90M | -106.90M | -16.20M | -11.10M | 948.00M |
Fidelis Insurance Holdings Ltd. Technical Analysis
Negative
15.07
Price Trends
15.66
Positive
16.96
Negative
17.16
Negative
Market Momentum
0.21
Negative
63.78
Neutral
90.27
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FIHL, the sentiment is Negative. The current price of 15.07 is below the 20-day moving average (MA) of 15.73, below the 50-day MA of 15.66, and below the 200-day MA of 17.16, indicating a neutral trend. The MACD of 0.21 indicates Negative momentum. The RSI at 63.78 is Neutral, neither overbought nor oversold. The STOCH value of 90.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FIHL.
Fidelis Insurance Holdings Ltd. Risk Analysis
Fidelis Insurance Holdings Ltd. disclosed 95 risk factors in its most recent earnings report. Fidelis Insurance Holdings Ltd. 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
Fidelis Insurance Holdings Ltd. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.06B | 7.89 | 22.41% | 0.38% | 13.29% | 17.14% | |
79 Outperform | $34.37B | 8.17 | 22.02% | ― | 26.24% | -3.87% | |
78 Outperform | $9.15B | 11.42 | 14.17% | 3.07% | 13.41% | 55.56% | |
77 Outperform | $4.95B | 9.24 | 9.91% | ― | -15.68% | -47.11% | |
76 Outperform | $4.24B | 97.45 | 60.58% | ― | 20.37% | 111.74% | |
70 Outperform | $1.75B | 15.93 | 4.63% | 2.65% | -32.79% | -94.89% | |
64 Neutral | $13.44B | 9.41 | 9.19% | 4.92% | 16.30% | -8.66% |
* Financial Sector Average
Performance Comparison
FIHL
Fidelis Insurance Holdings Ltd.
15.67
-2.49
-13.71%
ACGL
Arch Capital Group
91.48
4.65
5.36%
ESGR
Enstar Group
332.54
47.71
16.75%
ORI
Old Republic International
37.03
9.94
36.69%
IGIC
International General Insurance Holdings
23.50
10.42
79.66%
GSHD
GooseHead Insurance
113.05
57.10
102.06%
Fidelis Insurance Holdings Ltd. Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 5.31% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture for Fidelis Insurance Group. While the company achieved strong premium growth and increased investment income, significant challenges were highlighted, including adverse developments in the aviation segment and losses from natural disasters. The high combined ratio also reflects underlying profitability issues. Although there are positive signs in terms of growth and capital management, the negative aspects weigh heavily on the overall sentiment.Highlights
Strong Premium Growth
Fidelis Insurance Group reported a 23% growth in gross premiums written, totaling $4.4 billion for the year 2024. This was driven by the direct property, marine, and structured credit insurance portfolios, as well as the reinsurance book.
Investment Income Increase
Net investment income increased by 59% from 2023, reaching $191 million. This was attributed to an increase in investable assets and a higher earned yield on the fixed income portfolio and cash balances.
Capital Management and Shareholder Returns
Fidelis returned $152 million of excess capital to shareholders through dividends and share buyback programs, reflecting an active capital management strategy.
Lowlights
Adverse Prior Year Development in Aviation
The company incurred $287 million in net prior year development in the aviation and aerospace line due to the ongoing Russia-Ukraine conflict, impacting results significantly.
California Wildfire Losses
Fidelis expects catastrophe losses related to the recent California wildfires to be between $160 million and $190 million net of recoveries, reflecting the increasing impact of climate change on industry losses.
High Combined Ratio
The company reported a combined ratio of 128% for the fourth quarter, driven by adverse prior year development and large loss ratios in the insurance segment, posing a challenge to profitability.
Company Guidance
During the fourth quarter of 2024, Fidelis Insurance Group reported a combined ratio of 99.7%, operating net income of $137 million, and an operating return on average equity of 5.6%. The company experienced $287 million in net prior year development in its aviation and aerospace line due to the ongoing Russia-Ukraine conflict, impacting results. Excluding this adverse development, Fidelis would have exceeded its long-term return targets. Fidelis achieved gross premiums written growth of 23% to $4.4 billion, with an RPI of 111% for the year. The company returned $152 million to shareholders through dividends and share buybacks and reported net investment income of $191 million, a 59% increase from the previous year. Despite the impact of recent California wildfires, Fidelis maintains a strong capital position, supporting strategic growth and capital management initiatives.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.