Kingsway Financial Services (KFS) AI Stock Analysis

• Market Cap: $413.47M
• Dividend Yield: N/A
• Average Volume (3M): 95.84K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.64
• Revenue Growth: 5.53%
• EPS Growth: -124.90%
• Country: US
• Employees: 433
• Sector: Consumer Cyclical
• Sector Strength: 69
• Industry: Auto - Dealerships
• EPS (TTM): -0.13
• Shares Outstanding: 28,873,415
• 10 Day Avg. Volume: 81,028
• 30 Day Avg. Volume: 95,839
• PEG Ratio: <0.01
• Price to Book (P/B): 8.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.32
• Enterprise Value/Market Cap: 0.54
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 3.50
• Enterprise Value/Ebitda: 13.28
• 1Y Price Target: $13.50
• Price Target Upside: -5.73% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 61 Neutral
• Price Target: $17.00 ▲(18.72%Upside)

Kingsway Financial Services' stock is rated at 61, reflecting significant financial challenges tempered by strong technical momentum and strategic acquisitions. While the company's leverage and profitability issues are concerning, recent acquisitions and positive technical indicators suggest potential for recovery. Valuation remains a risk, with the negative P/E ratio highlighting ongoing financial struggles.

Kingsway Financial Services Business Overview & Revenue Model

Company Description

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty business services, asset management, and real estate businesses. The company operates through three segments: Extended Warranty, Leased Real Estate, and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also sells new home warranty products, as well as offers uninsured warrant administration services to homebuilders and homeowners; markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies. The Leased Real Estate segment owns a parcel of real property consisting of approximately 192 acres located in the State of Texas. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, SEC reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. The company offers its products and services through credit unions, dealers, homebuilders, and consumers. Kingsway Financial Services Inc. was incorporated in 1989 and is based in Itasca, Illinois.

How the Company Makes Money

Kingsway Financial Services generates revenue through its portfolio of subsidiaries, which primarily operate in the extended warranty and insurance sectors. The company's revenue streams include premiums collected from insurance policies, fees from vehicle service contracts, and other financial products it offers. KFS also benefits from investment income derived from managing its subsidiaries' assets. The company strategically acquires businesses that complement its existing operations, enabling it to expand its service offerings and customer base, which in turn contributes to its earnings. Significant partnerships with automotive dealers, manufacturers, and other financial institutions enhance its distribution channels and market reach, further supporting its revenue model.

Kingsway Financial Services Financial Statement Overview

Summary

Kingsway Financial Services is experiencing financial difficulties. Despite strong gross profit margins, the company faces issues with high leverage, negative cash flows, and profitability challenges.

Income Statement

Kingsway Financial Services shows an inconsistent revenue growth pattern with a recent decline in EBIT and Net Income. Gross Profit margin is strong at 56.0% TTM, but the negative EBIT and Net Income margins indicate profitability challenges. The company needs to address operational inefficiencies to improve margins.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.17 TTM, indicating significant leverage. While the equity ratio is relatively low at 10.3%, the company's ROE is negative due to recent losses. Improving equity levels and managing debt could enhance financial stability.

Cash Flow

Cash flow analysis shows negative operating cash flow and free cash flow TTM, reflecting cash management issues. The operating cash flow to net income ratio is negative, indicating cash flow challenges relative to earnings. Strategic improvements in cash generation are needed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	112.79M	109.38M	107.66M	114.69M	94.78M	65.72M
Gross Profit	63.16M	82.65M	76.03M	90.61M	87.72M	63.02M
EBITDA	3.56M	2.16M	5.93M	30.13M	3.24M	14.11M
Net Income	-10.23M	-9.27M	23.56M	24.72M	1.86M	-5.42M
Balance Sheet
Total Assets	192.12M	186.62M	197.72M	285.65M	475.63M	452.47M
Cash, Cash Equivalents and Short-Term Investments	13.76M	5.49M	9.26M	64.33M	12.80M	14.53M
Total Debt	62.40M	60.22M	45.61M	103.31M	295.19M	271.50M
Total Liabilities	170.65M	168.31M	173.11M	263.53M	412.96M	387.00M
Stockholders Equity	19.70M	16.66M	27.71M	21.68M	773.00K	4.51M
Cash Flow
Free Cash Flow	-10.43M	358.00K	-26.39M	11.89M	-6.74M	1.46M
Operating Cash Flow	-9.62M	1.07M	-26.19M	-14.57M	-5.91M	1.67M
Investing Cash Flow	-10.28M	-16.85M	6.46M	100.94M	-8.60M	4.01M
Financing Cash Flow	14.72M	11.44M	-39.96M	-37.93M	-540.00K	13.60M

Kingsway Financial Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KFS, the sentiment is Positive. The current price of 14.32 is below the 20-day moving average (MA) of 14.46, above the 50-day MA of 12.94, and above the 200-day MA of 9.47, indicating a neutral trend. The MACD of 0.41 indicates Positive momentum. The RSI at 52.84 is Neutral, neither overbought nor oversold. The STOCH value of 13.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KFS.

Kingsway Financial Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CARS	78 Outperform	$809.35M	19.15	9.35%	―	2.24%	-57.33%
CRMT	67 Neutral	$453.08M	26.16	3.45%	―	-2.26%	―
CANG	64 Neutral	$552.12M	6.63	0.12%	―	40.31%	-204.86%
Sector *	62 Neutral	$16.95B	10.84	-7.26%	3.63%	1.71%	-25.14%
KFS	61 Neutral	$413.47M	―	-46.36%	―	5.53%	-124.90%
RMBL	47 Neutral	$94.27M	―	-130.43%	―	-14.45%	78.09%
SDA	41 Neutral	$245.32M	―	-167.38%	―	―	―

Kingsway Financial Services Corporate Events

Kingsway Financial Completes Acquisition of Roundhouse Electric

On July 1, 2025, Kingsway Financial Services Inc., through its subsidiary Longhorns Acquisition LLC, completed the acquisition of Roundhouse Electric & Equipment Co., Inc., a Texas corporation. The transaction involved a combination of cash and debt financing, with Kingsway granting rollover phantom equity rights valued at approximately $3.5 million and paying cash consideration based on an enterprise valuation of $22.35 million. This strategic acquisition is expected to enhance Kingsway’s market position and operational capabilities in the electric equipment industry. Additionally, Kingsway and Roundhouse entered into a new secured term credit facility with Main Street Bank, comprising a $11 million term loan, a revolving credit facility, and a non-revolving equipment guidance line of credit, which will support the financial structuring of the acquisition.

Kingsway Financial Hosts Investor Day at NYSE

On May 18, 2025, Kingsway Financial Services, Inc. announced the posting of an investor presentation on its website. The company also revealed plans to host an Investor Day at the New York Stock Exchange on May 19, 2025, which will be live-streamed for participants.

Kingsway Financial Services Raises $2M via Preferred Stock

On May 8, 2025, Kingsway Financial Services Inc., a Delaware corporation, conducted a private placement of 80,000 shares of a newly created Class D Preferred Stock, raising $2,000,000. This stock, offered without registration under the Securities Act, features conversion options into common stock, preferential dividends, and specific redemption terms, positioning it as a senior class of capital stock. The issuance is expected to impact the company’s financial structure by introducing a new class of preferred stock with fixed, cumulative dividends and a liquidation preference, potentially affecting stakeholders’ interests and the company’s capital strategy.