Skyward Specialty Insurance Group, Inc. (SKWD) AI Stock Analysis

• Market Cap: $2.10B
• Dividend Yield: N/A
• Average Volume (3M): 511.07K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.33
• Revenue Growth: 28.17%
• EPS Growth: 28.63%
• Country: US
• Employees: 580
• Sector: Financial
• Sector Strength: 86
• Industry: Insurance - Property & Casualty
• EPS (TTM): 2.88
• Shares Outstanding: 40,330,643
• 10 Day Avg. Volume: 654,034
• 30 Day Avg. Volume: 511,067
• PEG Ratio: 0.64
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.74
• Price to Cash Flow (P/CF): 22.80
• P/FCF Ratio: 21.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $56.67
• Price Target Upside: 7.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

Skyward Specialty Insurance Group, Inc. is well-positioned within the insurance industry, supported by robust financial performance and strategic growth initiatives. The company's prudent financial management and growth in premiums and income are significant strengths. While technical indicators show moderate bullish momentum, the fair valuation and absence of dividends may limit appeal. Challenges in underwriting and increased reserves present manageable risks.

Positive Factors

Earnings Performance

Skyward should continue to outperform earnings expectations given the favorable outlook for both top-line growth and margin performance.

Market Conditions

Skyward has a well-rounded and defensible portfolio of niche product lines that are benefiting from macro tailwinds as the broader E&S/specialty markets enjoy some of the best market conditions in decades.

Technology and Efficiency

By leveraging technology across all aspects of its business, Skyward is able to enhance risk selection and better manage claims, thereby boosting efficiency and returns.

Negative Factors

E&S Pricing Pressure

Excess and surplus (E&S) pricing could decelerate faster, pressuring top-line growth for Skyward.

Growth Challenges

Despite better-than-expected 2025 guidance, there is limited room for incremental upside due to decelerating top-line growth.

Valuation Concerns

Valuation appears full given growth outlook, making it difficult to support further multiple expansion.

Skyward Specialty Insurance Group, Inc. Business Overview & Revenue Model

Company Description

Skyward Specialty Insurance Group, Inc., an insurance holding company, engages in underwriting commercial property and casualty insurance coverages in the United States. The company offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.

How the Company Makes Money

Skyward Specialty Insurance Group, Inc. generates revenue primarily through the underwriting of specialty insurance policies. The company earns money by collecting premiums from policyholders in exchange for coverage against specified risks. These premiums serve as the primary revenue stream for the company. Skyward also invests a portion of the premiums collected in various financial instruments to generate investment income, which contributes to overall earnings. Additionally, the company may form strategic partnerships with other insurance providers or reinsurers to expand its product offerings and manage risk effectively, further influencing its revenue generation.

Skyward Specialty Insurance Group, Inc. Financial Statement Overview

Summary

Skyward Specialty Insurance Group, Inc. demonstrates strong financial health with significant revenue and profit growth, efficient equity utilization, and robust cash flow generation. While operational efficiency has shown volatility, the company's conservative leverage and strong cash position provide a cushion against potential risks, positioning it well in the insurance industry.

Income Statement

Skyward Specialty Insurance Group, Inc. has demonstrated strong revenue growth, with a TTM (Trailing-Twelve-Months) revenue increase of 28.5% compared to the previous year. The gross profit margin remains robust at 100% due to the nature of the insurance industry. Net profit margin improved to 10.3%, showcasing enhanced profitability. However, the lack of EBIT in the previous year indicates potential volatility in operational efficiency.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.15, indicating conservative leverage. The return on equity has improved to 14.96%, reflecting efficient use of shareholders' equity. However, the equity ratio stands at 21.29%, suggesting a moderate reliance on liabilities to finance assets.

Cash Flow

Skyward shows a solid cash flow position with a high free cash flow to net income ratio of 2.53, indicating strong cash generation relative to accounting profits. However, the operating cash flow to net income ratio of 2.57 suggests the need for careful management of operating activities to sustain cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.15B	895.40M	642.42M	535.82M	447.89M
	Gross Profit
1.15B	895.40M	642.42M	535.82M	447.89M
	EBIT
0.00	0.00	56.19M	48.75M	-94.66M
	EBITDA
165.59M	0.00	61.32M	58.05M	-84.01M
	Net Income Common Stockholders
118.83M	85.98M	39.40M	38.32M	-74.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.18B	863.92M	774.17M	206.38M	299.41M
	Total Assets
3.73B	2.95B	2.37B	2.12B	1.95B
	Total Debt
119.54M	128.69M	128.61M	128.53M	128.45M
	Net Debt
-2.07M	62.80M	83.17M	86.42M	64.99M
	Total Liabilities
2.94B	1.51B	1.95B	1.69B	1.65B
	Stockholders Equity
794.00M	661.03M	421.66M	426.08M	303.22M
Cash Flow		Free Cash Flow
300.89M	335.03M	206.61M	173.13M	42.64M
	Operating Cash Flow
305.12M	338.19M	208.94M	175.28M	44.71M
	Investing Cash Flow
-243.69M	-493.81M	-193.38M	-183.01M	-74.93M
	Financing Cash Flow
-4.23M	130.95M	2.18M	1.38M	56.30M

Skyward Specialty Insurance Group, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.53
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKWD, the sentiment is Positive. The current price of 52.53 is above the 20-day moving average (MA) of 51.61, above the 50-day MA of 50.29, and above the 200-day MA of 45.26, indicating a bullish trend. The MACD of 1.13 indicates Negative momentum. The RSI at 64.14 is Neutral, neither overbought nor oversold. The STOCH value of 67.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKWD.

Skyward Specialty Insurance Group, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SKWD	79 Outperform	$2.10B	18.25	16.27%	―	28.17%	28.63%
SAFT	74 Outperform	$1.13B	15.88	8.66%	4.74%	21.61%	273.90%
HCI	72 Outperform	$1.56B	16.31	28.26%	1.10%	36.21%	18.17%
ROOT	70 Outperform	$1.80B	76.66	10.41%	―	158.57%	―
BOW	70 Outperform	$1.24B	31.92	13.60%	―	50.21%	37.28%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
LMND	54 Neutral	$1.90B	―	-31.05%	―	20.94%	16.23%

Skyward Specialty Insurance Group, Inc. Corporate Events

Skyward Specialty Insurance Reports Strong Growth and Agreements

On January 31, 2025, Skyward Re, a subsidiary of Skyward Specialty Insurance Group, commuted its Loss Portfolio Transfer and Adverse Development and Retrocession Agreement with R&Q Re, receiving $11.7 million in cash and strengthening loss reserves by $25.3 million. The company reported strong preliminary fourth quarter 2024 results with a 20.8% increase in gross written premiums to $388.4 million and net income of $14.4 million. Looking ahead to 2025, Skyward Specialty anticipates net income between $138.0 million and $150.0 million and a combined ratio between 91.0% and 92.0%, reflecting a positive outlook for continued growth and strategic investments in its business divisions.