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Kingsway Financial Services (KFS)
NYSE:KFS
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Kingsway Financial Services
(NYSE:KFS)
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Rating:47Neutral
Price Target:
$12.50
▼(-5.09% Downside)
Kingsway Financial Services' overall stock score reflects significant financial and valuation challenges, which are partially offset by positive earnings call highlights. The company's financial performance and valuation are the most significant concerns, while the earnings call provides some optimism with strong revenue growth and strategic acquisitions.
Positive Factors
Revenue Growth
The significant revenue growth, particularly in the KSX segment, indicates strong market demand and effective business strategies, positioning the company for sustained expansion.
Successful Acquisitions
Strategic acquisitions enhance Kingsway's portfolio, potentially increasing market share and diversifying revenue streams, which supports long-term growth.
Improved Cash Position
An improved cash position enhances financial flexibility, allowing the company to invest in growth opportunities and manage debt more effectively.
Negative Factors
Profitability Challenges
Ongoing profitability issues, despite strong gross margins, suggest operational inefficiencies that could hinder long-term financial health.
Cash Flow Issues
Persistent cash flow challenges may limit the company's ability to fund operations and growth initiatives, impacting its financial stability.
Pressure on Key Segments
External pressures on key segments like nursing and diagnostics could constrain revenue and profitability, posing risks to future performance.
Kingsway Financial Services (KFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$388.59M
Dividend YieldN/A
Average Volume (3M)75.96K
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth14.24%
EPS Growth-67.80%
CountryUS
Employees433
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)-0.10
Shares Outstanding28,956,152
10 Day Avg. Volume75,042
30 Day Avg. Volume75,957
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)13.66
Price to Sales (P/S)2.02
P/FCF Ratio635.75
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue2.97
Enterprise Value/Gross Profit2.97
Enterprise Value/Ebitda76.05
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Kingsway Financial Services Business Overview & Revenue Model
Company DescriptionKingsway 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 MoneyKFS generates revenue through multiple streams, primarily from its insurance underwriting and reinsurance operations. The company earns premiums from policyholders, which serve as a significant source of income. Additionally, KFS invests the funds received from premiums in various financial instruments, generating investment income. Another key revenue stream is the management fees charged for its investment management services. Partnerships with various insurance brokers and financial institutions enhance KFS's distribution capabilities, further driving revenue growth. The company's strategic focus on risk management and investment strategies allows it to optimize its earnings while maintaining a strong financial position.
Kingsway Financial Services Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 25, 2026
Earnings Call Sentiment Positive
The call highlighted significant revenue growth and successful acquisitions, particularly in the KSX segment. The company demonstrated robust performance in its Extended Warranty segment with increased cash sales. However, there were concerns regarding onetime expenses and pressures in the nursing and diagnostics sectors. Overall, the positives in growth and acquisition success outweigh the challenges faced.Q3-2025 Updates
Positive Updates
Significant Revenue Growth
Revenues were up 37% year-over-year, with the KSX segment achieving revenue growth of 104% and adjusted EBITDA growth of 90%.
Successful Acquisitions
Kingsway completed four acquisitions during the quarter, including Southside Plumbing, marking the third addition under the Kingsway Skilled Trades platform in 2025.
Extended Warranty Segment Performance
The Extended Warranty segment produced top line revenue growth of 2% with resilient cash flow, and cash sales accelerated from up 9.2% year-over-year in Q2 to up 14.2% year-over-year in Q3.
Strong Cash Position and Managing Debt
The company's cash position increased to $9.3 million, up from $5.5 million at year-end 2024, despite an increase in net debt due to recent acquisitions.
Positive Business Momentum
Roundhouse and Kingsway Skilled Trades have performed well since acquisition, and Image Solutions saw sequential EBITDA growth.
Negative Updates
Onetime Expenses Impacting KSX Segment
The KSX segment faced onetime expenses, including a $325,000 noncash item due to a hospital system client's bankruptcy, impacting EBITDA figures.
Pressure on Secure Nursing and Digital Diagnostics
Hospitals are under pressure from reimbursement issues which could affect the nurse staffing and digital diagnostics businesses.
Extended Warranty Adjusted EBITDA Decline
Adjusted EBITDA for the Extended Warranty segment was $800,000 compared to $2.1 million a year ago, despite an increase in cash sales.
Company Guidance
In the Kingsway Third Quarter 2025 Earnings Call, CEO JT Fitzgerald highlighted several key metrics reflecting the company's robust performance. Kingsway's revenues increased by 37% year-over-year, with the KSX segment achieving a substantial 104% growth in revenue and a 90% rise in adjusted EBITDA. This segment became the primary revenue source for the first time, marking a significant milestone. Meanwhile, the Extended Warranty segment saw a modest revenue increase of 2%, but cash sales accelerated by 14.2% compared to the previous year, demonstrating solid cash flow and resilient modified cash EBITDA. The company also reported a trailing 12-month adjusted run rate EBITDA between $20.5 million and $22.5 million. Additionally, Kingsway completed four acquisitions during the quarter, including the notable acquisition of Southside Plumbing for a maximum purchase price of $6.75 million, which contributed to a total net debt of $61.4 million at quarter-end. The call emphasized the company's strategic focus on disciplined execution and scaling the KSX portfolio to sustain long-term growth.Kingsway Financial Services Financial Statement Overview
Summary
Kingsway Financial Services is facing significant financial challenges. Despite a strong gross profit margin, the company struggles with profitability, as indicated by a negative net profit margin and low EBIT and EBITDA margins. The balance sheet shows reduced debt levels, but the negative return on equity and cash flow issues highlight operational inefficiencies and poor cash flow management.Income Statement
Kingsway Financial Services shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 88.15%, which is strong, but the company is struggling with profitability as evidenced by a negative net profit margin of -8.81%. Revenue growth is positive at 9% TTM, but the EBIT and EBITDA margins are low, indicating operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a significant reduction in debt levels from previous years, with a current debt-to-equity ratio of 0.06 TTM, which is a positive sign. However, the return on equity is negative at -51.48%, indicating that the company is not generating sufficient returns on shareholders' equity. The equity ratio is not explicitly calculated, but the low debt levels suggest improved financial stability.40
Negative
Cash Flow
Cash flow analysis shows challenges, with negative operating and free cash flows TTM. The free cash flow to net income ratio is high at 9.34, indicating that cash flow issues are impacting profitability. The operating cash flow to net income ratio is negative, highlighting cash flow management issues.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 128.06M | 112.53M | 107.66M | 114.69M | 81.41M | 68.60M |
| Gross Profit | 128.06M | 112.53M | 107.66M | 114.69M | 81.41M | 68.60M |
| EBITDA | 5.00M | 3.53M | 36.12M | 49.50M | 4.60M | 0.00 |
| Net Income | -10.61M | -9.27M | 23.56M | 24.72M | -342.00K | -6.72M |
Balance Sheet | ||||||
| Total Assets | 235.13M | 186.62M | 197.72M | 285.65M | 475.63M | 452.47M |
| Cash, Cash Equivalents and Short-Term Investments | 9.29M | 13.63M | 15.18M | 64.33M | 12.80M | 35.25M |
| Total Debt | 1.03M | 60.22M | 45.61M | 103.31M | 96.58M | 271.50M |
| Total Liabilities | 199.31M | 168.31M | 173.11M | 263.53M | 460.88M | 433.81M |
| Stockholders Equity | 16.65M | 16.66M | 27.71M | 21.68M | 773.00K | 4.51M |
Cash Flow | ||||||
| Free Cash Flow | -1.13M | 358.00K | -26.39M | 11.89M | -6.74M | 1.46M |
| Operating Cash Flow | -117.16K | 1.07M | -26.19M | -14.57M | -5.91M | 1.67M |
| Investing Cash Flow | -30.05M | -16.85M | 6.46M | 100.94M | -8.60M | 4.01M |
| Financing Cash Flow | 31.94M | 11.44M | -39.96M | -37.93M | -540.00K | 13.60M |
Kingsway Financial Services Technical Analysis
Positive
13.17
Price Trends
12.97
Positive
13.67
Negative
13.17
Positive
Market Momentum
0.11
Negative
54.57
Neutral
46.48
Neutral
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 13.17 is above the 20-day moving average (MA) of 12.99, above the 50-day MA of 12.97, and above the 200-day MA of 13.17, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 54.57 is Neutral, neither overbought nor oversold. The STOCH value of 46.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KFS.
Kingsway Financial Services Risk Analysis
Kingsway Financial Services disclosed 33 risk factors in its most recent earnings report. Kingsway Financial Services 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
Kingsway Financial Services Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $679.48M | 24.75 | 6.11% | ― | 0.20% | -20.57% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $186.91M | -1.76 | -268.06% | ― | -12.43% | 66.92% | |
50 Neutral | $694.79M | -17.34 | ― | ― | ― | ― | |
49 Neutral | $213.34M | -14.50 | -2.60% | ― | 2.07% | -117.51% | |
47 Neutral | $388.59M | -31.67 | -39.82% | ― | 14.24% | -67.80% | |
44 Neutral | $100.14M | -0.98 | -52.02% | ― | -81.31% | 87.13% |
* Consumer Cyclical Sector Average
KFS
Kingsway Financial Services
13.42
5.43
67.96%
CRMT
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25.72
-21.76
-45.83%
CARS
Cars
11.36
-6.11
-34.97%
RDNW
RideNow Group
4.91
0.81
19.76%
UXIN
Uxin
3.37
-0.79
-18.99%
VRM
Vroom, Inc.
19.26
-5.38
-21.83%
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.