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Skyward Specialty Insurance Group, Inc. (SKWD)
NASDAQ:SKWD
US Market
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Skyward Specialty Insurance Group, Inc. (SKWD) AI Stock Analysis

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SKWD

Skyward Specialty Insurance Group, Inc.

(NASDAQ:SKWD)

Rating:79Outperform
Price Target:
$58.00
▲(15.47% Upside)
Skyward Specialty Insurance Group, Inc. scores well due to its strong financial performance and positive earnings call, highlighting record operating income and strategic growth. Technical analysis suggests neutral momentum, while valuation is fair. The absence of corporate events and dividend yield slightly tempers the overall score.
Positive Factors
Earnings
Skyward produced operating EPS of $0.89 in the second quarter, which beat the Street’s estimate of $0.84.
Growth Potential
Premium growth should continue to benefit from increased demand for specialty and E&S coverage.
Market Position
Skyward is a fast-growing, technology-enabled specialty insurer that focuses on niche markets characterized by complex, hard-to-write risks.
Negative Factors
Growth Outlook
Despite better-than-expected 2025 guidance, there is limited room for incremental upside due to decelerating top-line growth.
Investment Income
Limited upside is expected from investment income due to the yield advantage already present in the portfolio.
Valuation
The stock is currently trading at 16 times 2025 estimates, while peers trade in the high-teens to mid-20s.

Skyward Specialty Insurance Group, Inc. (SKWD) vs. SPDR S&P 500 ETF (SPY)

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

Company DescriptionSkyward 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 MoneySkyward Specialty Insurance Group, Inc. generates revenue primarily through the underwriting and sale of insurance policies. The company's key revenue streams include premiums collected from policyholders in exchange for coverage against specified risks. Additionally, Skyward Specialty earns income from investment activities, where it invests the premiums collected into various financial instruments to generate returns. The company may also engage in reinsurance agreements to manage risk exposure and optimize capital efficiency. Significant partnerships with brokers and agents, who distribute Skyward's specialized insurance products, contribute to the company's market reach and revenue generation.

Skyward Specialty Insurance Group, Inc. Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance with record-breaking operating income and significant growth in key segments like agriculture and credit. The company demonstrated effective cost management and strategic use of technology. However, challenges in the alternative investment portfolio and competitive pressures in the property market posed concerns. Despite these lowlights, the highlights significantly outweighed the negatives, showcasing the company's robust strategy and adaptability.
Q2-2025 Updates
Positive Updates
Record Adjusted Operating Income
Skyward reported adjusted operating income of $37.1 million or $0.89 per diluted share, driven by $31.2 million of pretax underwriting income, marking the best in company history.
Significant Growth in Premiums
Gross written premiums grew 18% for the quarter, with notable growth in agriculture, credit, accident and health, captives, and specialty programs.
Company Best Combined Ratio
The company achieved a combined ratio of 89.4%, the best in its history, which included 1.4 points of catastrophic losses.
Improved Expense Ratio
The expense ratio improved to 28.1%, a 0.9-point improvement over the prior year quarter, aligning with expectations of sub 30s.
Strong Investment Income Excluding Alternatives
Excluding alternative investments, net investment income increased by 23.5% over the prior year due to a 30% increase in income from the fixed income portfolio.
Strategic Use of Technology
The company is leveraging AI and advanced technology through its SkyVantage platform, enhancing underwriting and claims processing capabilities.
Negative Updates
Volatility in Alternative Investments
The reduction in investment income to $18.6 million was impacted by underperformance in the alternative asset portfolio, particularly in oil and gas and real estate holdings.
Challenges in Property Market
The property book faced challenges due to increasingly competitive market conditions, leading to a reduction in growth in this area.
Exposure to Loss Inflation
The company faced challenges from loss inflation, impacting its decision to be selective in growing its casualty business.
Company Guidance
During the second quarter 2025 earnings call for Skyward Specialty, the company reported an adjusted operating income of $37.1 million, or $0.89 per diluted share, with the net income reaching $38.8 million, or $0.93 per diluted share. The quarter saw gross written premiums grow by 18%, driven by substantial contributions from agriculture, credit, accident and health (A&H), captives, and specialty programs. The combined ratio improved to a company-best 89.4%, including 1.4 points of catastrophe losses primarily from storms in the South and Midwest. The non-catastrophe loss ratio of 59.9% marked a 0.7 percentage point improvement compared to 2024. The company maintained a robust reserve position, with incurred but not reported (IBNR) reserves accounting for over 70% of the net reserves. The expense ratio improved by 0.9 points year-over-year to 28.1%, aligning with expectations. Despite a reduction in investment income to $18.6 million due to alternative asset portfolio performance, excluding alternatives, net investment income increased by 23.5% from the previous year, driven by a higher portfolio yield and a 30% increase in income from the fixed income portfolio. The company's financial leverage was modest, with a debt-to-capital ratio just shy of 12%, providing ample debt financing flexibility.

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 some volatility, the company's conservative leverage and strong cash position provide a cushion against potential risks.
Income Statement
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.21B1.15B895.40M636.40M535.82M447.89M
Gross Profit533.61M327.89M895.40M636.40M535.82M447.89M
EBITDA169.11M165.59M124.02M60.29M58.05M-84.01M
Net Income124.10M118.83M85.98M39.40M38.32M-74.64M
Balance Sheet
Total Assets4.03B3.73B2.95B2.36B2.12B1.95B
Cash, Cash Equivalents and Short-Term Investments1.24B1.18B863.92M774.17M664.74M299.41M
Total Debt119.55M119.54M128.69M128.61M128.53M128.45M
Total Liabilities3.18B2.94B1.51B1.94B1.69B1.65B
Stockholders Equity850.72M794.00M661.03M421.66M426.08M393.52M
Cash Flow
Free Cash Flow303.44M300.89M335.03M206.61M173.13M42.64M
Operating Cash Flow307.61M305.12M338.19M208.94M175.28M44.71M
Investing Cash Flow-274.61M-243.69M-493.81M-193.38M-183.01M-74.93M
Financing Cash Flow5.23M-4.23M130.95M2.18M1.38M56.30M

Skyward Specialty Insurance Group, Inc. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price50.23
Price Trends
50DMA
51.35
Negative
100DMA
55.07
Negative
200DMA
52.36
Negative
Market Momentum
MACD
-0.40
Negative
RSI
52.02
Neutral
STOCH
40.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKWD, the sentiment is Neutral. The current price of 50.23 is above the 20-day moving average (MA) of 49.02, below the 50-day MA of 51.35, and below the 200-day MA of 52.36, indicating a neutral trend. The MACD of -0.40 indicates Negative momentum. The RSI at 52.02 is Neutral, neither overbought nor oversold. The STOCH value of 40.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SKWD.

Skyward Specialty Insurance Group, Inc. Risk Analysis

Skyward Specialty Insurance Group, Inc. disclosed 40 risk factors in its most recent earnings report. Skyward Specialty Insurance Group, Inc. 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

Skyward Specialty Insurance Group, Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$2.07B16.1516.20%22.20%5.78%
74
Outperform
$1.09B12.6110.08%4.95%18.52%65.66%
73
Outperform
$2.26B15.4523.90%0.94%9.62%-18.69%
70
Outperform
$1.05B21.1213.23%41.00%61.54%
68
Neutral
$18.06B11.9710.24%3.74%9.75%1.30%
65
Neutral
$1.45B19.4927.52%59.76%
55
Neutral
$3.75B-35.10%22.91%4.95%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SKWD
Skyward Specialty Insurance Group, Inc.
50.23
8.02
19.00%
SAFT
Safety Insurance Group
72.58
-6.50
-8.22%
HCI
HCI Group
170.56
71.79
72.68%
LMND
Lemonade
50.25
32.11
177.01%
ROOT
Root
92.64
55.05
146.45%
BOW
Bowhead Specialty Holdings Inc.
31.05
-0.11
-0.35%

Skyward Specialty Insurance Group, Inc. Corporate Events

Executive/Board ChangesShareholder Meetings
Skyward Specialty Elects Directors and Approves Compensation
Neutral
May 13, 2025

On May 7, 2025, Skyward Specialty Insurance Group, Inc. held its Annual Meeting of Shareholders. During the meeting, Marcia Dall and Anthony J. Kuczinski were elected as directors, and the compensation of named executive officers was approved. The company decided to hold annual advisory votes on executive compensation until 2031. Additionally, Ernst & Young LLP was ratified as the independent auditors for the fiscal year ending December 31, 2025.

The most recent analyst rating on (SKWD) stock is a Buy with a $54.00 price target. To see the full list of analyst forecasts on Skyward Specialty Insurance Group, Inc. stock, see the SKWD Stock Forecast page.

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.Date of analysis: Sep 05, 2025