Palomar Holdings Inc (PLMR)
NASDAQ:PLMR
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Palomar Holdings
(NASDAQ:PLMR)
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Rating:77Outperform
Price Target:
$137.00
▲(6.74% Upside)
Action:ReiteratedDate:02/25/26
PLMR scores well primarily on strong financial performance (expanding margins, solid ROE, and strong cash generation) and supportive earnings-call guidance for continued growth in 2026. The score is tempered by currently weak technical momentum (below key moving averages with negative MACD) and identifiable near-term underwriting/expense headwinds outlined in guidance, while valuation appears reasonable at ~16.8x earnings.
Positive Factors
Strong cash generation
Consistently high operating and free cash flow (~$409M in 2025) implies durable earnings quality and internal funding for growth, reinsurance, and M&A. Strong cash conversion reduces reliance on external capital and supports capital returns or opportunistic investments over the next 2–6 months.
Negative Factors
Rising loss ratio guidance
A materially higher guided loss ratio signals underwriting profitability is expected to compress as crop and casualty mix grows. Persistently higher loss trends reduce underwriting margins over the medium term and require sustained pricing or portfolio actions to restore prior profitability levels.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently high operating and free cash flow (~$409M in 2025) implies durable earnings quality and internal funding for growth, reinsurance, and M&A. Strong cash conversion reduces reliance on external capital and supports capital returns or opportunistic investments over the next 2–6 months.
Read all positive factors
Palomar Holdings (PLMR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.43B
Dividend YieldN/A
Average Volume (3M)215.90K
Price to Earnings (P/E)18.2
Beta (1Y)0.36
Revenue Growth54.41%
EPS Growth52.71%
CountryUS
Employees253
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)2.24
Shares Outstanding26,689,745
10 Day Avg. Volume163,116
30 Day Avg. Volume215,903
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)3.81
Price to Sales (P/S)4.10
P/FCF Ratio8.78
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue3.97
Enterprise Value/Gross Profit7.07
Enterprise Value/Ebitda13.10
Forecast
1Y Price Target
$165.80Price Target Upside29.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)9.45
Revenue Forecast (FY)$2.52B
Palomar Holdings Business Overview & Revenue Model
Company Description
Palomar Holdings, Inc., an insurance holding company, provides specialty property insurance to residential and commercial customers. The company offers personal and commercial specialty property insurance products, including residential and commer...
How the Company Makes Money
Palomar Holdings generates revenue primarily through the underwriting of specialty insurance policies. The company collects premiums from policyholders in exchange for providing coverage against specific risks, such as earthquakes and hurricanes. ...
Palomar Holdings Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based financial and operational progress: robust top-line growth (+32% GWP), significant earnings expansion (+62% adjusted net income), attractive returns (ROE ~26%), improved reinsurance economics, successful acquisitions and growing scale/talent. Challenges include commercial earthquake rate pressure (rates down ~15%), a higher Q4 loss ratio driven by casualty and crop growth, near-term expense pressure, and modest 2026 accretion from the Gray Surety acquisition due to financing costs. Management provided positive 2026 guidance (midpoint implying ~24% adjusted net income growth) and clear strategic plans (AI, integration, disciplined underwriting), suggesting the positives materially outweigh the headwinds.Positive Updates
Record Full-Year Financial Performance
Full-year 2025 gross written premium grew 32% to $2.0 billion; adjusted net income increased 62% to $216.1 million; adjusted diluted EPS rose 54% to $7.86; adjusted return on equity was 25.9% (up from 22.2% in 2024).
Negative Updates
Commercial Earthquake Rate Pressure
Commercial earthquake experienced rates down ~15% and the commercial earthquake book remains pressured by elevated competition; management expects this competitive pressure could persist through much of 2026; Q4 earthquake premium declined 2% YoY (muted by a one-time 2024 unearned premium benefit).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Financial Performance
Full-year 2025 gross written premium grew 32% to $2.0 billion; adjusted net income increased 62% to $216.1 million; adjusted diluted EPS rose 54% to $7.86; adjusted return on equity was 25.9% (up from 22.2% in 2024).
Read all positive updates
Company Guidance
Palomar's 2026 guidance calls for adjusted net income of $260 million to $275 million (midpoint implying ~24% growth and an adjusted ROE >20%), and incorporates the Gray Surety acquisition; the company says the range includes $8–12 million of catastrophe losses (Mac noted a $10 million midpoint) and assumes a ~10% risk‑adjusted reduction in excess‑of‑loss property catastrophe reinsurance at the 6/1 renewal. Management expects the net earned premium ratio to rise from 44.9% in 2025 into the upper‑40s in 2026, loss ratio (including catastrophes) to be in the mid‑to‑upper‑30s (vs. 28.5% in 2025), an adjusted combined ratio in the mid‑70s (2025: 72.7%), improvements versus 2025 acquisition and other underwriting expense ratios (12.1% and 8.0%, respectively), continued quarterly seasonality driven by crop, and the guidance assumes modest 2026 accretion from Gray Surety with buy financing of ~$300 million (term loan SOFR+1.75%).Palomar Holdings Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
78
Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 875.97M | 553.86M | 375.93M | 327.09M | 247.79M |
| Gross Profit | 647.37M | 269.45M | 195.59M | 137.64M | 110.90M |
| EBITDA | 262.65M | 157.44M | 111.92M | 72.54M | 60.72M |
| Net Income | 197.07M | 117.57M | 79.20M | 52.17M | 45.85M |
Balance Sheet | |||||
| Total Assets | 2.23B | 2.26B | 1.71B | 1.31B | 925.73M |
| Cash, Cash Equivalents and Short-Term Investments | 725.15M | 550.86M | 695.35M | 583.17M | 482.97M |
| Total Debt | 7.09M | 0.00 | 52.60M | 36.40M | 3.47M |
| Total Liabilities | 1.28B | 1.53B | 1.24B | 921.70M | 531.57M |
| Stockholders Equity | 942.67M | 729.03M | 471.25M | 384.75M | 394.17M |
Cash Flow | |||||
| Free Cash Flow | 408.98M | 260.91M | 109.35M | 163.65M | 82.96M |
| Operating Cash Flow | 409.12M | 261.16M | 116.11M | 169.58M | 87.81M |
| Investing Cash Flow | -353.98M | -306.24M | -128.48M | -156.81M | -58.19M |
| Financing Cash Flow | -28.79M | 73.77M | -3.94M | 5.02M | -13.04M |
Palomar Holdings Technical Analysis
Positive
128.35
Price Trends
123.02
Positive
125.42
Positive
125.42
Positive
Market Momentum
0.09
Negative
62.23
Neutral
87.88
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLMR, the sentiment is Positive. The current price of 128.35 is above the 20-day moving average (MA) of 120.16, above the 50-day MA of 123.02, and above the 200-day MA of 125.42, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 62.23 is Neutral, neither overbought nor oversold. The STOCH value of 87.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PLMR.
Palomar Holdings Risk Analysis
Palomar Holdings disclosed 53 risk factors in its most recent earnings report. Palomar Holdings 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
Palomar Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.01B | 5.59 | 38.04% | 0.82% | 8.71% | 17.26% | |
77 Outperform | $3.43B | 18.22 | 22.79% | ― | 54.41% | 52.71% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
58 Neutral | $722.07M | 27.78 | 10.96% | ― | 38.50% | ― | |
57 Neutral | $4.50B | -58.89 | -31.19% | ― | 30.53% | 21.82% | |
56 Neutral | $1.85B | -74.49 | 9.03% | 3.15% | 4.51% | -8.29% |
* Financial Sector Average
PLMR
Palomar Holdings
128.35
-14.64
-10.24%
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Palomar Holdings Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Palomar Highlights Strong Q4 Results and Gray Surety Acquisition
Positive
Feb 23, 2026
On February 23, 2026, Palomar Holdings, Inc. updated its investor presentation, highlighting fourth-quarter gross written premium of $492.6 million, up 31.8% year on year, and adjusted net income of $61.1 million, a 48% gain that translated into a...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Palomar Holdings completes Gray Surety acquisition and financing
Positive
Feb 2, 2026
On February 2, 2025, Palomar Holdings announced it had completed the acquisition of The Gray Casualty Surety Company, effective January 31, 2026, and closed a new $450 million unsecured credit facility, effective January 27, 2026, consisting of a...
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.