ProAssurance (PRA) AI Stock Analysis

• Market Cap: $1.22B
• Dividend Yield: N/A
• Average Volume (3M): 521.92K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.34
• Revenue Growth: -2.05%
• EPS Growth: N/A
• Country: US
• Employees: 1,036
• Sector: Financial
• Sector Strength: 78
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.52
• Shares Outstanding: 51,413,643
• 10 Day Avg. Volume: 417,185
• 30 Day Avg. Volume: 521,916
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 1.45
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: 19.86
• 1Y Price Target: $26.00
• Price Target Upside: 9.47% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 64 Neutral
• Price Target: $26.00 ▲(9.47% Upside)

ProAssurance's overall stock score is driven by strong technical indicators and positive corporate events, including a strategic merger. However, financial performance challenges, particularly in cash flow and profitability, moderate the score.

Positive Factors

Acquisition

The acquisition transaction value represents a significant premium to the closing price per share of PRA common stock prior to the transaction.

Balance Sheet

Despite a difficult market environment, ProAssurance has maintained a healthy business and strong balance sheet.

Financial Performance

ProAssurance reported 4Q24 operating EPS of $0.36/share, beating expectations and estimates.

Negative Factors

Market Competition

ProAssurance has struggled to grow as it has reacted prudently to protect profitability in its book and patiently awaited a better market environment.

Revenue

The revenue is expected to experience a low single-digit decline, with margins improving but still below the levels of specialty peers.

Stock Rating

The rating has been downgraded to Underperform due to limited upside potential in the stock price while the acquisition by The Doctors Co. is pending regulatory approval.

ProAssurance Business Overview & Revenue Model

Company Description

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare providers and institutions, and attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance, such as guaranteed cost policies, policyholder dividend policies, retrospectively rated policies, and deductible policies, as well as alternative market solutions that include program design, fronting, claims administration, risk management, SPC rental, asset management, and SPC management services for individual companies, agencies, groups, and associations. The company also participates in Lloyd's of London Syndicate 1729, which underwrites property and casualty insurance, and reinsurance. It markets its products through independent agencies and brokers, as well as an internal sales force. The company was founded in 1976 and is headquartered in Birmingham, Alabama.

How the Company Makes Money

ProAssurance generates revenue primarily through the sale of insurance premiums to healthcare professionals and institutions in need of liability coverage. The company collects premiums upfront, which are then invested to generate additional income. Key revenue streams include underwriting profit, which arises from the difference between premiums collected and claims paid out, and investment income derived from managing the reserves set aside for future claims. ProAssurance also benefits from strategic partnerships with healthcare organizations, which can enhance its market reach and customer base, as well as from its expertise in risk management services that help clients mitigate potential claims.

ProAssurance Financial Statement Overview

Summary

ProAssurance shows a stable revenue base with slight growth and improved net profit margin. The balance sheet is strong with low leverage, but cash flow management remains a concern due to consistent negative free cash flow.

Income Statement

ProAssurance shows a stable revenue base with a slight growth of 0.43% in the TTM (Trailing-Twelve-Months) compared to the previous annual period. However, the gross profit margin is exceptionally high, suggesting strong pricing power or cost management. The net profit margin has improved to 3.73% in TTM after a loss in previous years, indicating a positive turnaround. EBIT and EBITDA margins reflect moderate operational efficiency.

Balance Sheet

The company maintains a conservative balance sheet with a debt-to-equity ratio of 0.36, indicating low leverage. The equity ratio stands at 22.32%, showing a solid equity base. Return on Equity (ROE) has improved to 3.43% in TTM, signaling better profitability, though still modest.

Cash Flow

ProAssurance faces challenges in cash flow generation with negative operating and free cash flow in the TTM. The free cash flow to net income ratio is negative, highlighting cash flow issues despite positive net income. The company must address these cash flow inefficiencies to ensure sustainable growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.12B	1.13B	1.14B	1.10B	1.12B	886.86M
Gross Profit	930.89M	253.34M	1.14B	1.10B	1.08B	886.86M
EBITDA	81.51M	103.17M	10.02M	52.22M	203.89M	-180.18M
Net Income	48.71M	52.74M	-38.60M	-402.00K	144.12M	-175.73M
Balance Sheet
Total Assets	5.49B	5.57B	5.63B	5.70B	6.19B	4.65B
Cash, Cash Equivalents and Short-Term Investments	298.87M	3.89B	65.90M	275.27M	4.19B	3.01B
Total Debt	15.95M	442.26M	444.31M	446.99M	445.83M	304.83M
Total Liabilities	4.21B	4.37B	4.52B	4.60B	4.76B	3.31B
Stockholders Equity	1.28B	1.20B	1.11B	1.10B	1.43B	1.35B
Cash Flow
Free Cash Flow	-32.20M	-19.73M	-54.67M	-34.19M	70.13M	84.86M
Operating Cash Flow	-25.89M	-10.71M	-49.88M	-29.84M	73.97M	92.34M
Investing Cash Flow	46.88M	10.67M	141.14M	-62.00M	-85.53M	-8.48M
Financing Cash Flow	-16.26M	-10.97M	-55.31M	-21.80M	-60.62M	-43.45M

ProAssurance Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.75
• 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 PRA, the sentiment is Neutral. The current price of 23.75 is below the 20-day moving average (MA) of 23.89, above the 50-day MA of 23.68, and above the 200-day MA of 20.05, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 44.90 is Neutral, neither overbought nor oversold. The STOCH value of 12.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRA.

ProAssurance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HMN	82 Outperform	$1.87B	13.67	10.91%	2.99%	6.01%	72.52%
UFCS	79 Outperform	$783.62M	8.64	11.68%	2.11%	14.28%	148.61%
SAFT	74 Outperform	$1.10B	12.95	10.08%	4.99%	18.52%	65.66%
HCI	73 Outperform	$2.16B	14.77	23.90%	0.94%	9.62%	-18.69%
BOW	70 Outperform	$1.02B	21.33	13.23%	―	41.00%	61.54%
Sector *	68 Neutral	$17.95B	11.54	10.27%	3.74%	9.64%	1.17%
PRA	64 Neutral	$1.22B	25.14	4.05%	―	-2.05%	―

ProAssurance Corporate Events

ProAssurance Reports Strong Q2 2025 Financial Results

On August 5, 2025, ProAssurance Corporation reported its financial results for the second quarter of 2025, highlighting a net income of $21.9 million and operating income of $26.8 million. The company demonstrated progress in achieving premium rate levels suitable for the challenging medical professional liability market, with a stable net premium written of $135.9 million. The quarter also saw a 10% increase in Specialty P&C renewal premiums and an improvement in the consolidated Non-GAAP combined ratio by 9.5 percentage points compared to the previous year. Additionally, the company announced a merger with The Doctors Company, which received stockholder approval and early termination of the waiting period under the Hart-Scott-Rodino Act, with the transaction expected to close in the first half of 2026.

ProAssurance Merger Advances with FTC Approval

On March 19, 2025, ProAssurance Corporation and The Doctors Company entered into a merger agreement, with ProAssurance becoming a wholly owned subsidiary of The Doctors Company. The U.S. Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period on July 2, 2025, satisfying a key condition for the merger’s completion, expected in the first half of 2026. Both companies will continue to operate independently until the merger is finalized, pending remaining regulatory approvals.

ProAssurance Stockholders Approve Acquisition by The Doctors Company

On June 24, 2025, ProAssurance Corporation announced that its stockholders approved the proposed acquisition by The Doctors Company, with over 99% of shares voting in favor. The transaction, expected to close in the first half of 2026, is subject to regulatory approvals and customary conditions. Upon completion, ProAssurance will become a wholly owned subsidiary of The Doctors Company, and its stock will be delisted from the New York Stock Exchange. The merger aims to combine the strengths of both companies to better serve healthcare providers, leveraging their shared history in the medical professional liability market.