Fairfax Financial Holdings (FFH) AI Stock Analysis

• Market Cap: $55.35B
• Dividend Yield: 0.92%
• Average Volume (3M): 49.37K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.63
• Revenue Growth: 17.40%
• EPS Growth: 11.85%
• Country: CA
• Employees: 47,040
• Sector: Financial
• Sector Strength: 83
• Industry: Insurance - Property & Casualty
• EPS (TTM): 58.61
• Shares Outstanding: 22,639,053
• 10 Day Avg. Volume: 55,378
• 30 Day Avg. Volume: 49,371
• PEG Ratio: 1.11
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.50
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 1.29
• Enterprise Value/Ebitda: 2.85
• 1Y Price Target: $2,594.16
• Price Target Upside: 13.69% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 75 Outperform
• Price Target: C$2,523.00 ▲(10.57%Upside)

Fairfax Financial Holdings demonstrates a robust financial profile with strong revenue growth and profitability. The stock valuation is attractive, and recent corporate events bolster its financial position. However, technical indicators suggest caution due to potential short-term volatility. The earnings call and corporate events provide a positive outlook, despite some operational challenges.

Positive Factors

Financial Performance

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

Underwriting Income

Better underwriting income with a 98.5% combined ratio versus the 100.5% estimate.

Negative Factors

Earnings from Associates

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

Impairment Charges

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

Fairfax Financial Holdings Business Overview & Revenue Model

Company Description

Fairfax Financial Holdings Limited is a Toronto-based holding company engaged in property and casualty insurance and reinsurance. Founded in 1985, Fairfax operates globally through its subsidiaries, providing a wide range of insurance products and services. The company is known for its prudent investment strategies and focus on long-term value creation, with additional interests in various sectors including hospitality, agriculture, and energy through its diversified investment portfolio.

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 presents a strong financial profile with robust revenue growth and profitability. The balance sheet remains stable with moderate leverage, while cash flow generation supports operational needs despite a recent decline in free cash flow. The company should focus on enhancing operational efficiency and cash management to sustain its financial health.

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
	EBIT
4.40B	5.64B	31.40B	1.34B	-1.03B	-4.29B
	EBITDA
5.29B	7.04B	6.09B	2.03B	-100.50M	1.47B
	Net Income Common Stockholders
4.04B	3.87B	4.38B	1.15B	3.40B	37.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.15B	7.28B	7.96B	11.70B	25.34B	16.30B
	Total Assets
91.91B	96.78B	91.99B	92.13B	86.65B	74.05B
	Total Debt
10.35B	13.06B	10.80B	9.32B	7.75B	8.81B
	Net Debt
3.43B	5.83B	5.04B	-2.38B	-17.59B	-7.49B
	Total Liabilities
64.27B	68.43B	64.28B	71.79B	65.33B	56.53B
	Stockholders Equity
22.92B	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: 2281.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 2281.82 is above the 20-day moving average (MA) of 2280.33, above the 50-day MA of 2158.92, and above the 200-day MA of 1942.40, indicating a bullish trend. The MACD of 39.84 indicates Positive momentum. The RSI at 56.63 is Neutral, neither overbought nor oversold. The STOCH value of 21.79 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
IAG	77 Outperform	C$13.04B	14.80	12.54%	2.51%	-7.31%	28.65%
IFC	76 Outperform	C$56.14B	25.40	12.95%	1.59%	4.73%	44.14%
SLF	75 Outperform	$50.38B	16.26	13.18%	3.69%	0.94%	3.50%
FFH	75 Outperform	$55.35B	8.96	17.21%	0.92%	17.40%	11.85%
DFY	74 Outperform	C$8.65B	20.51	13.25%	0.89%	18.15%	18.11%
GWO	68 Neutral	C$47.28B	12.36	14.65%	4.43%	17.48%	25.54%
Sector *	64 Neutral	$12.85B	9.81	7.59%	16985.65%	12.30%	-7.71%

Fairfax Financial Holdings Corporate Events

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.