Fairfax Financial Holdings (FFH) AI Stock Analysis

• Market Cap: $58.98B
• Dividend Yield: 0.88%
• Average Volume (3M): 46.72K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.62
• Revenue Growth: 17.40%
• EPS Growth: 11.85%
• Country: CA
• Employees: 47,040
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Property & Casualty
• EPS (TTM): 58.24
• Shares Outstanding: 22,635,054
• 10 Day Avg. Volume: 48,207
• 30 Day Avg. Volume: 46,721
• PEG Ratio: -0.20
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.10
• Enterprise Value/Market Cap: 0.21
• Enterprise Value/Revenue: 0.11
• Enterprise Value/Gross Profit: 0.40
• Enterprise Value/Ebitda: 0.88
• 1Y Price Target: $2,635.08
• Price Target Upside: 8.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 80 Outperform
• Price Target: C$2,801.00 ▲(14.84%Upside)

Fairfax Financial Holdings demonstrates a robust financial profile supported by strong revenue growth and profitability. Technical analysis indicates bullish momentum, while valuation metrics suggest potential undervaluation. Positive corporate events and a confident earnings call further enhance its attractiveness, though challenges in cash flow management and international operations warrant attention.

Positive Factors

Financial Performance

Increased target multiple reflecting continued good operating income visibility and continued solid BVPS growth.

Investment Gains

Net investment gains much better on better net gain on equities, with significant gains on convertible bonds and equity warrants.

Underwriting Income

Better underwriting income, at US$658mm versus US$329mm estimate, with an 89.5% combined ratio versus a 94.9% estimate, underscoring excellent underwriting discipline.

Negative Factors

Division Performance

Other division lower than expected, largely on one-time non-cash impairment charges.

Earnings from Associates

Earnings from associates are weaker than expected, which can be unpredictable.

Fairfax Financial Holdings Business Overview & Revenue Model

Company Description

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Insurance and Reinsurance, Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it retails home improvement goods, toys and baby products, golf equipment, sports apparel and accessories, housewares and home décors, and tableware and gifts; invests in retail business; and owns and operates holiday resorts. Further, the company provides integrated travel and travel-related financial services; originates, processes, and distributes pulses and staple foods; creates, produces, and distributes entertainment content; and provision of pet medical insurance and database services, as well as media and marketing solutions. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

How the Company Makes Money

Fairfax Financial Holdings makes money primarily through its insurance and reinsurance operations. The company earns premiums by underwriting property and casualty insurance policies globally. In addition to its core insurance business, Fairfax generates significant revenue from its investment activities, leveraging its insurance float to invest in stocks, bonds, and alternative assets. Investment income and capital gains from these activities contribute considerably to Fairfax’s earnings. The company’s revenue model is bolstered by strategic acquisitions and partnerships that enhance its insurance capabilities and expand its investment opportunities. Fairfax's diversified investment approach and focus on value investing are key factors in its financial performance.

Fairfax Financial Holdings Financial Statement Overview

Summary

Fairfax Financial Holdings shows strong revenue growth and profitability, with a stable balance sheet and moderate leverage. However, there are areas for improvement in operating efficiency and cash management due to a decline in free cash flow.

Income Statement

Fairfax Financial Holdings exhibits strong revenue growth with a TTM (Trailing-Twelve-Months) revenue of $30.03 billion, up from the previous annual revenue of $28.45 billion, indicating a growth rate of 5.57%. The net profit margin stands at 13.47% for TTM, reflecting robust profitability. However, the EBIT margin has decreased from 19.82% in 2023 to 14.64% in TTM, suggesting some pressure on operating efficiency. Overall, the company demonstrates solid revenue momentum and profitability, with some areas for operational improvement.

Balance Sheet

The balance sheet of Fairfax Financial Holdings shows a healthy equity base with a stockholders' equity of $24.07 billion. The debt-to-equity ratio is 0.51, which is fairly moderate and indicates a balanced approach to leveraging. The equity ratio of 24.35% reflects adequate financial stability. However, the total debt has increased slightly over the period, and while it is not concerning, maintaining a check on debt levels will be crucial to sustaining financial stability.

Cash Flow

The cash flow analysis highlights a positive free cash flow of $2.65 billion in TTM, although it has decreased from $3.59 billion in 2023, indicating a decline in free cash flow growth. The operating cash flow to net income ratio stands at 0.76, demonstrating reasonable cash generation relative to net income. While the company maintains a positive cash flow, the decline in free cash flow growth suggests potential challenges in cash management or increased capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.03B	28.45B	31.83B	25.82B	25.80B	19.79B
Gross Profit	31.59B	28.45B	25.80B	25.82B	25.80B	19.79B
EBITDA	5.29B	7.04B	6.09B	2.03B	-100.50M	1.47B
Net Income	4.04B	3.87B	4.38B	1.15B	3.40B	37.40M
Balance Sheet
Total Assets	98.90B	96.78B	91.99B	92.13B	86.65B	74.05B
Cash, Cash Equivalents and Short-Term Investments	7.27B	7.28B	7.96B	11.70B	25.34B	16.30B
Total Debt	12.17B	13.06B	10.80B	9.32B	7.75B	8.81B
Total Liabilities	70.70B	68.43B	64.28B	71.79B	65.33B	56.53B
Stockholders Equity	24.07B	24.07B	22.95B	16.68B	16.39B	13.86B
Cash Flow
Free Cash Flow	2.65B	3.59B	-553.50M	-4.84B	6.29B	-133.50M
Operating Cash Flow	3.09B	3.99B	-39.40M	-4.42B	6.64B	139.80M
Investing Cash Flow	-799.60M	-1.32B	92.00M	384.80M	1.84B	-46.80M
Financing Cash Flow	-2.38B	-1.56B	-1.07B	-1.29B	-1.19B	436.90M

Fairfax Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2438.98
• 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 TSE:FFH, the sentiment is Positive. The current price of 2438.98 is above the 20-day moving average (MA) of 2370.41, above the 50-day MA of 2271.94, and above the 200-day MA of 2002.14, indicating a bullish trend. The MACD of 55.20 indicates Negative momentum. The RSI at 63.77 is Neutral, neither overbought nor oversold. The STOCH value of 53.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FFH.

Fairfax Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFH	80 Outperform	$58.98B	9.55	17.21%	0.88%	17.40%	11.85%
Sector *	64 Neutral	$6.68B	10.87	6.50%	5.06%	24.88%	-1.54%
SLF		$37.26B	16.70	13.18%	3.89%	―	―
IAG	81 Outperform	C$13.53B	15.36	12.54%	3.34%	-7.31%	28.65%
DFY	80 Outperform	C$9.52B	21.50	13.25%	1.32%	18.15%	18.11%
IFC	76 Outperform	C$55.70B	25.20	12.95%	1.71%	4.73%	44.14%
GWO	73 Outperform	C$48.07B	12.57	14.65%	6.53%	17.48%	25.54%

Fairfax Financial Holdings Corporate Events

Fairfax Financial Appoints Amitabh Kant as Senior Advisor to Boost Indian Investments

Fairfax Financial Holdings has appointed Mr. Amitabh Kant as a Senior Advisor, leveraging his extensive experience in economic development and transformative initiatives in India. This strategic move is expected to enhance Fairfax’s investment approach in India, aligning with the country’s ambitious economic goals and benefiting stakeholders by supporting sectors critical to India’s growth, such as infrastructure and financial services.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$1850.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Fairfax Financial Holdings Prices $900 Million Senior Notes Offering

Fairfax Financial Holdings Limited announced the pricing of a private offering of senior notes totaling US$900 million, with the proceeds intended for refinancing, repaying, or redeeming existing obligations, as well as potential acquisitions or investments. This strategic move aims to strengthen Fairfax’s financial position and flexibility, potentially impacting its market operations and providing opportunities for growth and investment.

The most recent analyst rating on (TSE:FFH) stock is a Buy with a C$1850.00 price target. To see the full list of analyst forecasts on Fairfax Financial Holdings stock, see the TSE:FFH Stock Forecast page.

Fairfax Financial Holdings Reports Strong Q1 2025 Earnings Amid Investment Gains

Fairfax Financial Holdings reported a significant increase in net earnings for the first quarter of 2025, reaching $945.7 million compared to $776.5 million in the same period of 2024. This growth was driven by substantial net gains on investments, despite a decrease in adjusted operating income and significant catastrophe losses from California wildfires. The company’s property and casualty insurance and reinsurance operations maintained a strong performance with a consolidated combined ratio of 98.5% and underwriting profit of $96.9 million. The company also saw growth in gross and net premiums written, reflecting new business and rate increases.

Fairfax Financial to Discuss Q1 2025 Results in Upcoming Conference Call

Fairfax Financial Holdings Limited announced a conference call scheduled for May 2, 2025, to discuss its first quarter results for 2025. This call will provide insights into the company’s financial performance and strategic direction, potentially impacting stakeholders’ perspectives on Fairfax’s market positioning and operational strategies.

Fairfax Financial Successfully Elects Directors at Annual Meeting

Fairfax Financial Holdings Limited announced the successful election of its twelve nominee directors during the Annual Shareholders’ Meeting held on April 10, 2025. The voting results indicate strong support for the nominees, reflecting confidence in the company’s leadership and strategic direction, which could positively influence its market position and stakeholder relations.

Fairfax Financial Holdings Announces Details of Hybrid Annual Shareholders’ Meeting

Fairfax Financial Holdings Limited has announced the details of its upcoming hybrid annual shareholders’ meeting, which will be held both in-person and virtually on April 10, 2025. The meeting will include a presentation by Chairman and CEO Prem Watsa, followed by a Q&A session. Shareholders can attend and vote through a web-based platform, and are encouraged to submit questions in advance. This hybrid format aims to increase accessibility and engagement among stakeholders.