ProAssurance (PRA) AI Stock Analysis

• Market Cap: $1.17B
• Dividend Yield: N/A
• Average Volume (3M): 435.81K
• Price to Earnings (P/E): 27.6
• Beta (1Y): 0.34
• Revenue Growth: -1.00%
• EPS Growth: N/A
• Country: US
• Employees: 1,036
• Sector: Financial
• Sector Strength: 78
• Industry: Insurance - Property & Casualty
• EPS (TTM): 0.13
• Shares Outstanding: 51,070,244
• 10 Day Avg. Volume: 354,526
• 30 Day Avg. Volume: 435,806
• PEG Ratio: -19.76
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.01
• Enterprise Value/Market Cap: 1.78
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 1.82
• Enterprise Value/Ebitda: 7.37
• 1Y Price Target: $25.00
• Price Target Upside: 9.51% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 60 Neutral
• Price Target: $24.00 ▲(5.12%Upside)

ProAssurance's overall score reflects a balance of factors. The acquisition by The Doctors Company is a significant positive, potentially leading to strategic benefits. However, high valuation metrics and cash flow issues pose risks. Technical analysis provides a mixed outlook, suggesting caution in the near term.

Positive Factors

Acquisition

The acquisition offer for ProAssurance includes a significant premium being paid, with the offer being 100% in cash.

Financial Performance

ProAssurance reported operating EPS that beat expectations and estimates, reflecting strong financial performance.

Market Valuation

ProAssurance's shares are trading at a significant 40%+ discount to ex-AOCI book value, which is seen as an overreaction.

Negative Factors

Legal and Inflation Challenges

Large verdicts and broader severity inflation are considered headwinds for the company.

Market Competition

ProAssurance has been playing defense amidst a difficult market backdrop, struggling to grow due to strong competition.

Revenue and Margins

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

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 makes money primarily through the underwriting of insurance policies and the management of investment portfolios. The company's key revenue streams include premium income from selling professional liability insurance policies to healthcare providers and institutions. Additionally, ProAssurance generates investment income from its portfolio, which includes fixed-income securities and equities. The company's earnings are further supported by strategic partnerships and affiliations with healthcare organizations, which enable it to expand its market presence and customer base. ProAssurance's revenue model is also influenced by factors such as underwriting discipline, risk assessment capabilities, and claims management efficiency.

ProAssurance Financial Statement Overview

Summary

ProAssurance demonstrates a recovery in profitability with a stable revenue stream and a strong balance sheet characterized by low leverage. However, cash flow management remains a concern due to consistent negative free cash flow, which impacts long-term stability.

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	1.13B	1.13B	1.14B	1.10B	1.08B	886.86M
Gross Profit	1.14B	1.13B	1.14B	1.10B	1.08B	886.86M
EBITDA	73.32M	80.83M	10.02M	53.62M	203.89M	-180.18M
Net Income	42.30M	52.74M	-38.60M	-402.00K	144.12M	-175.73M
Balance Sheet
Total Assets	5.53B	5.57B	5.63B	5.70B	6.19B	4.65B
Cash, Cash Equivalents and Short-Term Investments	3.95B	309.80M	65.90M	275.27M	4.19B	3.01B
Total Debt	440.42M	442.26M	444.31M	446.99M	445.83M	304.83M
Total Liabilities	4.29B	4.37B	4.52B	4.60B	4.76B	3.31B
Stockholders Equity	1.23B	1.20B	1.11B	1.10B	1.43B	1.35B
Cash Flow
Free Cash Flow	-19.08M	-19.73M	-54.67M	-34.19M	70.13M	84.86M
Operating Cash Flow	-10.68M	-10.71M	-49.88M	-29.84M	73.97M	92.34M
Investing Cash Flow	2.66M	-13.89M	141.14M	-62.00M	-85.53M	-8.48M
Financing Cash Flow	-13.85M	-10.97M	-55.31M	-21.80M	-60.62M	-43.45M

ProAssurance Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 22.83
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 22.83 is below the 20-day moving average (MA) of 23.00, below the 50-day MA of 23.05, and above the 200-day MA of 18.02, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 41.10 is Neutral, neither overbought nor oversold. The STOCH value of 40.00 is Neutral, 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
UFCS	79 Outperform	$725.35M	11.23	8.51%	2.25%	14.60%	―
SAFT	76 Outperform	$1.17B	16.12	8.75%	4.57%	19.05%	40.69%
HMN	74 Outperform	$1.75B	15.55	8.97%	3.26%	6.67%	77.17%
BOW	70 Outperform	$1.22B	28.53	14.40%	―	50.21%	37.28%
Sector *	67 Neutral	$16.66B	11.44	9.71%	3.91%	11.61%	-10.70%
HCI	64 Neutral	$1.74B	14.61	28.75%	1.06%	20.89%	3.25%
PRA	60 Neutral	$1.17B	27.65	3.60%	―	-1.00%	―

ProAssurance Corporate Events

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.

The most recent analyst rating on (PRA) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on ProAssurance stock, see the PRA Stock Forecast page.

ProAssurance Reports Strong Q3 2023 Financial Results

ProAssurance announced its financial results for the third quarter of 2023, highlighting a significant increase in net income compared to the same period last year. The company attributes this growth to improved underwriting results and favorable investment returns, which have positively impacted its financial stability and market position.

The most recent analyst rating on (PRA) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on ProAssurance stock, see the PRA Stock Forecast page.

ProAssurance Reports Q1 2025 Net Loss Amid Acquisition News

ProAssurance reported a net loss of $5.8 million for the first quarter of 2025, despite achieving an operating income of $6.8 million. The company highlighted stable net premiums in its Medical Professional Liability business and a slight increase in the Workers’ Compensation Insurance segment. The announcement also noted an 8% increase in renewal premiums for the Specialty P&C segment and a focus on maintaining price adequacy and disciplined underwriting. Additionally, ProAssurance announced an agreement for acquisition by The Doctors Company, expected to close in the first half of 2026.