Kestrel Group (KG) AI Stock Analysis

• Market Cap: $76.26M
• Dividend Yield: N/A
• Average Volume (3M): 16.87K
• Price to Earnings (P/E): 1.3
• Beta (1Y): 1.54
• Revenue Growth: -66.75%
• EPS Growth: -50.53%
• Country: US
• Employees: 42
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Reinsurance
• EPS (TTM): -2.29
• Shares Outstanding: 7,741,943
• 10 Day Avg. Volume: 18,544
• 30 Day Avg. Volume: 16,868
• PEG Ratio: 0.00
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 1.72
• P/FCF Ratio: -0.61
• Enterprise Value/Market Cap: 3.09
• Enterprise Value/Revenue: 5.23
• Enterprise Value/Gross Profit: 5.66
• Enterprise Value/Ebitda: 4.74
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: $9.00 ▼(-4.26% Downside)
• Action: Reiterated Date: 03/15/26
• Date: Action: Reiterated 03/15/26

The score is held back primarily by weak cash flow generation and ongoing leverage/balance-sheet volatility, despite improved reported profitability in 2025. Technicals also remain bearish with the stock trading below all key moving averages, while valuation is hard to assess due to a negative P/E and no dividend yield data.

Positive Factors

Profitability rebound (2025)

A material profitability rebound in 2025 shows the business can generate significant earnings when conditions align. Durable impact: stronger reported profits can rebuild capital, support underwriting flexibility and reduce reliance on external funding if management maintains disciplined pricing and reserve practices.

Leverage materially improved

A sharp reduction in debt-to-equity cuts solvency risk and improves financial flexibility for a reinsurer. Over 2–6 months this improvement supports better access to reinsurance markets and counterparties, and reduces refinancing pressure, aiding durable capital stability if the trend holds.

Stronger equity and ROE

Higher ROE and strengthened equity indicate improved returns on capital and a firmer capital base. This can support long-term growth funding and insurer credibility with cedants and counterparties, provided earnings quality and reserve adequacy remain consistent.

Negative Factors

Consistent negative cash flow

Persistent negative operating and free cash flow, including a -$96.1M outflow in 2025, means earnings are not converting to cash. This undermines liquidity and the ability to fund claims, buy reinsurance, or pay down debt, creating structural funding risk if it persists.

Earnings driven by non-core items

Reported 2025 profitability appears influenced by non-recurring items, producing outsized margins. Reliance on non-core gains reduces predictability of underwriting performance and weakens confidence that current profits are sustainable across cycles.

Balance-sheet volatility remains

Large swings in assets, equity and leverage point to an unstable balance-sheet trajectory. For a reinsurer, this raises sensitivity to reserve revisions, pricing cycles and valuation changes, threatening long-term capital adequacy and counterparty trust if volatility continues.

Kestrel Group Business Overview & Revenue Model

Company Description

Kestrel Group Ltd. engages in provides reinsurance products and services to regional and specialty property and casualty insurers. It operates through the following segments: Legacy Reinsurance, Insurance Programs, and Corporate. The Legacy Reinsurance segment focuses on the results of operations of all businesses of the company and its subsidiaries. The Insurance Programs segment refers to the results of operations of all businesses of Kestrel Group LLC. The Corporate segment relates to the general corporate and management-related expenses of the company and its subsidiaries. The company is headquartered in Hamilton, Bermuda.

Kestrel Group Financial Statement Overview

Summary

Despite a strong 2025 profit rebound (income statement score 62) and improved leverage versus 2024, the balance sheet remains meaningfully levered (balance sheet score 48) and cash conversion is a major weakness with consistently negative operating/free cash flow, including -$96.1M in 2025 (cash flow score 22). Overall results appear volatile and potentially influenced by non-core items, limiting confidence in durability.

Income Statement

Profitability improved materially in 2025, with revenue up 24% and net income surging to $46.7M, translating to an unusually high net margin (well above 100%), which suggests earnings were likely driven by non-core items rather than pure underwriting performance. Results have been volatile across the cycle (large losses in 2022–2023 followed by profitability in 2024–2025), and revenue has been uneven over time, which limits confidence in the durability of the current run-rate despite the strong latest-year rebound.

Balance Sheet

Leverage remains a key risk factor. Debt-to-equity improved to ~1.38x in 2025 from a very elevated ~5.68x in 2024, but it is still meaningful for a reinsurance profile where capital strength matters. Equity appears to have strengthened in 2025 and return on equity rose to ~36%, yet the sharp year-to-year swings in assets, equity, and leverage point to a less stable balance sheet trajectory and potentially higher sensitivity to valuation or reserve changes.

Cash Flow

Cash generation is the weakest area: operating cash flow and free cash flow were negative in every year shown, including -$96.1M in 2025 (worse than net income), indicating earnings are not converting into cash. While free cash flow growth is shown as positive, it is improving from deeply negative levels and does not change the fact that the business has consistently burned cash, which can pressure liquidity and capital flexibility if it persists.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	34.05M	5.25M	1.33M	58.13M	98.72M
Gross Profit	25.06M	1.85M	-2.20M	58.13M	98.72M
EBITDA	59.56M	141.76K	-4.45M	-41.06M	38.24M
Net Income	46.73M	324.27K	-4.22M	-60.35M	25.62M
Balance Sheet
Total Assets	548.76M	4.70M	954.60M	1.85B	2.32B
Cash, Cash Equivalents and Short-Term Investments	16.95M	4.29M	5.55M	46.62M	66.09M
Total Debt	176.46M	255.28M	314.00K	255.57M	255.35M
Total Liabilities	420.47M	699.48M	705.44M	1.56B	1.94B
Stockholders Equity	128.28M	45.19M	249.16M	284.58M	384.26M
Cash Flow
Free Cash Flow	-96.14M	-67.45M	-2.49M	-195.93M	-394.43M
Operating Cash Flow	-96.14M	-67.45M	-2.49M	-195.93M	-394.43M
Investing Cash Flow	146.94M	77.74M	0.00	188.79M	464.06M
Financing Cash Flow	-40.00M	-3.73M	0.00	-10.98M	-138.90M

Kestrel Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KG, the sentiment is Negative. The current price of 9.4 is below the 20-day moving average (MA) of 13.05, below the 50-day MA of 11.70, and below the 200-day MA of 19.63, indicating a bearish trend. The MACD of -0.75 indicates Positive momentum. The RSI at 32.74 is Neutral, neither overbought nor oversold. The STOCH value of 9.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KG.

Kestrel Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HG	82 Outperform	$2.83B	4.91	22.09%	―	22.79%	-5.17%
GLRE	71 Outperform	$543.40M	6.59	11.10%	―	5.83%	-101.38%
SPNT	71 Outperform	$2.38B	5.55	20.87%	―	7.87%	-4.68%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
JRVR	63 Neutral	$282.25M	6.16	7.44%	0.63%	-19.08%	56.21%
KG	46 Neutral	$76.26M	1.26	33.48%	―	-66.75%	-50.53%
OXBR	44 Neutral	$7.28M	-18.54	-50.32%	―	―	55.30%