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Skyward Specialty Insurance Group, Inc. (SKWD)
NASDAQ:SKWD
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Skyward Specialty Insurance Group, Inc.
(NASDAQ:SKWD)
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Rating:79Outperform
Price Target:
$56.00
▲(19.10% Upside)
Skyward Specialty Insurance Group, Inc. scores well due to its strong financial performance, strategic acquisition, and positive earnings call highlights. However, technical indicators suggest a bearish trend, and the absence of a dividend yield limits its appeal to income investors. The company's strategic initiatives and robust financial health position it well for future growth, despite current market challenges.
Positive Factors
Revenue Growth
The 18% growth in gross written premiums highlights Skyward's ability to expand its market reach and enhance its revenue base, indicating strong demand for its specialized insurance products.
Strategic Acquisition
The acquisition of Apollo Group Holdings enhances Skyward's presence in U.S. specialty markets, providing strategic alignment and financial benefits, which strengthens its competitive position.
Technological Advancements
The use of AI and advanced technology in underwriting and claims processing improves operational efficiency and customer service, providing a competitive edge in the insurance industry.
Negative Factors
Volatility in Alternative Investments
Volatility in alternative investments, particularly in oil and gas and real estate, can impact overall investment returns, posing a risk to financial stability and cash flow predictability.
Challenges in Property Market
Increasing competition in the property market limits growth opportunities, potentially affecting Skyward's ability to expand its property insurance segment and maintain market share.
Exposure to Loss Inflation
Exposure to loss inflation pressures Skyward to be selective in growing its casualty business, which could constrain expansion and profitability in this segment over the long term.
Skyward Specialty Insurance Group, Inc. (SKWD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.94B
Dividend YieldN/A
Average Volume (3M)498.04K
Price to Earnings (P/E)14.8
Beta (1Y)0.47
Revenue Growth22.20%
EPS Growth5.78%
CountryUS
Employees580
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.89
Shares Outstanding40,486,656
10 Day Avg. Volume580,108
30 Day Avg. Volume498,039
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)2.55
Price to Sales (P/S)1.76
P/FCF Ratio6.73
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue2.02
Enterprise Value/Gross Profit7.23
Enterprise Value/Ebitda14.38
Forecast
1Y Price Target
$60.14Price Target Upside27.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
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 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.85
Very Positive
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.78
Positive
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.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.26B | 1.15B | 895.40M | 636.40M | 535.82M | 447.89M |
| Gross Profit | 351.22M | 327.89M | 271.65M | 168.20M | 134.35M | 48.73M |
| EBITDA | 176.63M | 165.59M | 124.02M | 60.29M | 58.53M | -83.02M |
| Net Income | 131.97M | 118.83M | 85.98M | 39.40M | 38.32M | -74.64M |
Balance Sheet | ||||||
| Total Assets | 4.34B | 3.73B | 2.95B | 2.36B | 2.12B | 1.95B |
| Cash, Cash Equivalents and Short-Term Investments | 1.77B | 1.18B | 863.92M | 774.17M | 664.74M | 299.41M |
| Total Debt | 100.00M | 119.54M | 128.69M | 128.61M | 128.53M | 128.45M |
| Total Liabilities | 3.44B | 2.94B | 1.51B | 1.94B | 1.69B | 1.65B |
| Stockholders Equity | 899.91M | 794.00M | 661.03M | 421.66M | 426.08M | 393.52M |
Cash Flow | ||||||
| Free Cash Flow | 370.09M | 300.89M | 335.03M | 206.61M | 173.13M | 42.64M |
| Operating Cash Flow | 374.83M | 305.12M | 338.19M | 208.94M | 175.28M | 44.71M |
| Investing Cash Flow | -315.17M | -243.69M | -493.81M | -193.38M | -183.01M | -74.93M |
| Financing Cash Flow | 5.23M | -4.23M | 130.95M | 2.18M | 1.38M | 56.30M |
Skyward Specialty Insurance Group, Inc. Technical Analysis
Negative
47.02
Price Trends
49.08
Negative
54.01
Negative
51.95
Negative
Market Momentum
-0.69
Negative
43.60
Neutral
68.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKWD, the sentiment is Negative. The current price of 47.02 is below the 20-day moving average (MA) of 47.93, below the 50-day MA of 49.08, and below the 200-day MA of 51.95, indicating a bearish trend. The MACD of -0.69 indicates Negative momentum. The RSI at 43.60 is Neutral, neither overbought nor oversold. The STOCH value of 68.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | 1.06B | 12.46 | 8.54% | 5.08% | 18.52% | 65.66% | |
79 Outperform | $1.94B | 14.75 | 16.20% | ― | 22.20% | 5.78% | |
73 Outperform | 2.43B | 15.99 | 24.25% | 0.85% | 9.62% | -18.69% | |
70 Outperform | 894.28M | 18.56 | ― | ― | 41.00% | 61.54% | |
68 Neutral | 1.43B | 19.48 | 34.89% | ― | 59.76% | ― | |
55 Neutral | 3.80B | -18.22 | -38.70% | ― | 22.91% | 4.95% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
SKWD
Skyward Specialty Insurance Group, Inc.
47.02
6.29
15.44%
SAFT
Safety Insurance Group
71.19
-6.92
-8.86%
STC
Stewart Information Services
74.32
1.70
2.34%
HCI
HCI Group
187.56
81.76
77.28%
ROOT
Root
92.57
54.79
145.02%
SLDE
Slide Insurance Holdings, Inc.
14.96
-8.34
-35.79%
Skyward Specialty Insurance Group, Inc. Corporate Events
M&A TransactionsBusiness Operations and Strategy
Skyward Specialty Insurance Acquires Apollo Group Holdings
Positive
Sep 8, 2025
On September 2, 2025, Skyward Specialty Insurance Group, Inc. announced its agreement to acquire 100% of Apollo Group Holdings Limited for $555 million, with the transaction expected to close in the first quarter of 2026. This acquisition aligns with Skyward Specialty’s strategy to enhance its presence in U.S. specialty markets by integrating Apollo’s innovative underwriting platform, which operates at Lloyd’s of London, and is expected to deliver significant financial benefits and strategic alignment for both companies.
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.