Stewart Information Services (STC) AI Stock Analysis

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Stewart Information Services

(NYSE:STC)

67Neutral

Stewart Information Services receives a score of 67, reflecting a stable financial performance with strong cash flow management and equity position. While technical indicators suggest a bearish sentiment, the company shows promising growth in key segments. The stock's high P/E ratio suggests potential overvaluation, but the dividend yield provides some support. The positive earnings call sentiment and recent dividend declaration enhance the overall outlook, despite existing market challenges.

Stewart Information Services (STC) vs. S&P 500 (SPY)

Market Cap

$1.88B

Dividend Yield2.95%

Average Volume (3M)159.38K

Price to Earnings (P/E)25.8

Beta (1Y)0.70

Revenue Growth11.40%

EPS GrowthN/A

CountryUS

Employees7,000

SectorFinancial

Sector Strength88

IndustryInsurance - Property & Casualty

Share Statistics

EPS (TTM)2.60

Shares Outstanding28,026,117

10 Day Avg. Volume137,767

30 Day Avg. Volume159,385

Financial Highlights & Ratios

PEG Ratio0.18

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.38

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit1.07

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$75.00

Price Target Upside11.99% Upside

Rating ConsensusHold

Number of Analyst Covering1

Stewart Information Services Business Overview & Revenue Model

Company DescriptionStewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services. The company operates in two segments, Title, and Ancillary Services and Corporate. The Title segment is involved in searching, examining, closing, and insuring the condition of the title to real property. This segment also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. The Ancillary Services and Corporate segment provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services to the mortgage industry. The company offers its products and services through its directly owned policy-issuing offices, network of independent agencies, and other businesses within the company. It serves homebuyers and sellers, residential and commercial real estate professionals, title agencies, real estate attorneys and investors, and home builders, as well as mortgage lenders, servicers, brokers, and investors. The company operates in the United States, Canada, the United Kingdom, and Australia. Stewart Information Services Corporation was founded in 1893 and is headquartered in Houston, Texas.

How the Company Makes MoneyStewart Information Services Corporation primarily generates revenue through the issuance of title insurance policies, which protect property buyers and mortgage lenders against potential defects in property titles. The company earns premiums on these policies, which form a significant portion of its revenue. Additionally, Stewart generates income from escrow and closing services, where it charges fees for managing the funds and documentation required for real estate transactions. The company also offers ancillary services, such as property information services, valuations, and underwriting, which contribute to its earnings. Strategic partnerships with real estate agencies, mortgage lenders, and financial institutions further bolster its revenue by expanding its market reach and customer base.

Stewart Information Services Financial Statement Overview

Summary

Stewart Information Services presents a stable financial profile with strong cash flow management and a solid equity position. While profitability metrics show some volatility, the company maintains a strong operational base. Leverage concerns are present but are offset by a robust equity foundation. Continued focus on revenue growth and profitability improvement will be key to enhancing financial performance.

Income Statement

Positive

STC shows a mixed income statement performance with fluctuating revenues. The Gross Profit Margin appears strong, indicating effective cost control. However, the Net Profit Margin and EBIT Margin have exhibited volatility, suggesting variable operational efficiency. The revenue growth has been inconsistent, indicating challenges in sustaining growth momentum.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with a favorable Equity Ratio, highlighting financial stability. However, the Debt-to-Equity Ratio is relatively high, pointing to potential leverage risks. The Return on Equity is modest, indicating stable but not exceptional profitability.

Cash Flow

Positive

Cash flow management is a strength for STC, with consistent Free Cash Flow and positive Operating Cash Flow to Net Income Ratio. The Free Cash Flow Growth Rate is positive, suggesting good cash generation capabilities, although fluctuations in capital expenditures indicate variable investment strategies.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.49B	2.26B	3.07B	3.31B	2.29B
	Gross Profit
2.42B	1.97B	2.42B	2.68B	1.91B
	EBIT
47.16M	0.00	231.57M	417.20M	203.74M
	EBITDA
108.77M	143.04M	308.23M	475.39M	240.34M
	Net Income Common Stockholders
73.31M	30.44M	162.31M	323.22M	154.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.07M	272.39M	272.69M	503.57M	453.36M
	Total Assets
2.73B	2.70B	2.74B	2.81B	1.98B
	Total Debt
456.17M	580.94M	595.01M	632.91M	220.86M
	Net Debt
455.10M	347.58M	346.64M	146.99M	-211.82M
	Total Liabilities
1.32B	1.32B	1.37B	681.69M	966.17M
	Stockholders Equity
1.40B	1.37B	1.36B	1.28B	1.01B
Cash Flow		Free Cash Flow
95.14M	45.25M	143.91M	350.49M	260.81M
	Operating Cash Flow
135.61M	83.04M	191.86M	390.29M	275.81M
	Investing Cash Flow
-87.26M	-29.97M	-300.67M	-645.28M	-231.37M
	Financing Cash Flow
-60.96M	-69.10M	-123.22M	310.37M	54.30M

Stewart Information Services Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price66.97

Price Trends

50DMA

68.43

Negative

100DMA

67.71

Negative

200DMA

69.13

Negative

Market Momentum

MACD

-0.81

Negative

RSI

51.32

Neutral

STOCH

68.97

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STC, the sentiment is Neutral. The current price of 66.97 is above the 20-day moving average (MA) of 65.52, below the 50-day MA of 68.43, and below the 200-day MA of 69.13, indicating a neutral trend. The MACD of -0.81 indicates Negative momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 68.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STC.

Stewart Information Services Risk Analysis

Stewart Information Services disclosed 22 risk factors in its most recent earnings report. Stewart Information Services 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

Stewart Information Services Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFCS	76 Outperform	$727.01M	11.98	8.18%	2.23%	14.41%	―
UVE	75 Outperform	$710.37M	11.05	16.95%	2.54%	7.24%	-9.28%
HCI	72 Outperform	$1.59B	16.62	28.26%	1.08%	36.21%	18.17%
SAFT	69 Neutral	$1.16B	16.21	8.66%	4.64%	21.61%	273.90%
STC	67 Neutral	$1.88B	25.77	5.31%	2.95%	11.40%	―
Sector *	64 Neutral	$12.64B	9.74	8.05%	17044.60%	12.66%	-4.62%
ACIC	56 Neutral	$564.73M	7.46	37.69%	―	1.00%	-77.16%

* Financial Sector Average

Performance Comparison

STC

Stewart Information Services

66.97

5.70

9.30%

SAFT

Safety Insurance Group

77.58

0.09

0.12%

UFCS

United Fire Group

28.63

5.96

26.29%

UVE

Universal Insurance Holdings

25.24

5.91

30.57%

ACIC

American Coastal Insurance

11.69

1.73

17.37%

HCI

HCI Group

147.69

38.47

35.22%

Stewart Information Services Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 0.31%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

Stewart Information Services demonstrated considerable growth in several key areas, including their title and real estate solutions segments, as well as a strong performance in domestic commercial business. However, they also faced significant challenges, such as a difficult housing market, increased operating expenses, and regulatory fee cuts in Texas. Despite these challenges, the company maintains a positive outlook due to growth in strategic segments and recognition as a top workplace.

Q1-2025 Updates

Positive Updates

Growth in Title and Real Estate Solutions Segments

The title segment grew by 11% and the real estate solutions segment by 17% in the first quarter of 2025.

Domestic Commercial Business Expansion

Domestic commercial business grew 39% in Q1 2025 compared to Q1 2024, with growth in asset classes such as retail, mixed-use, and energy.

Agency Services Growth

Gross agency revenue grew by 11% year-over-year and net revenue by 14%, driven by an increase in commercial transactions and expanding agent partnerships.

International Revenue Increase

Non-commercial international revenue grew by 16% compared to the previous year, with a focus on expanding in Canada.

Recognition as a Top Workplace

Stewart was awarded the Top Workplace Award by USA Today, highlighting the company's positive work environment.

Negative Updates

Challenging Housing Market Conditions

Existing home sales were down 3.6% from the previous year, with interest rates between 6.6% to 7%, contributing to a difficult housing market.

Increased Operating Expenses

Higher expenses in the real estate solutions segment due to increased costs of credit data and higher outside data and service fees in commercial operations.

Flat Residential Revenue

Residential revenue remained flat due to a 9% decrease in closed orders, primarily because of lower residential transactions.

Texas Department of Insurance Fee Cut

A surprising 10% fee cut by the Texas Department of Insurance, affecting about 15% of Stewart's total revenues.

Company Guidance

In the first quarter of 2025, Stewart Information Services reported a solid performance amidst a challenging housing market, marked by interest rates between 6.6% and 7% and declining existing home sales. The company's title segment grew by 11%, driven by a 39% increase in domestic commercial business, while its real estate solutions segment saw a 17% growth. Stewart's agency services expanded, with gross agency revenue increasing by 11% and net revenue by 14%. Despite market volatility, the company's first-quarter net income was $3 million, or $0.11 per diluted share, on total revenues of $612 million. Adjusted net income was $7 million, or $0.25 per diluted share. Stewart anticipates continued growth and improved market conditions in the second half of 2025, focusing on strategic growth initiatives and leveraging its strong leadership team to maintain its position as a top workplace.

Stewart Information Services Corporate Events

Dividends

Stewart Information Services Declares Q1 2025 Dividend

Positive

Mar 3, 2025

On March 3, 2025, Stewart Information Services Corporation announced that its Board of Directors declared a cash dividend of $0.50 per share for the first quarter of 2025. This dividend is payable on March 31, 2025, to stockholders of record as of March 17, 2025, reflecting the company’s ongoing commitment to providing value to its shareholders.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.