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Trisura Group Ltd (TSE:TSU)
TSX:TSU

Trisura Group Ltd (TSU) AI Stock Analysis

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Trisura Group Ltd

(TSX:TSU)

73Outperform
Trisura Group Ltd demonstrates strong financial health with robust profitability and low leverage, despite revenue challenges. Positive earnings call sentiment and strategic corporate events indicate future growth potential, although valuation is fair. Technical indicators suggest short-term momentum, yet caution is advised due to potential market fluctuations.
Positive Factors
Investment Opportunity
Trisura provides a unique investment opportunity in a pure-play specialty insurer in Canada, one capable of materially outgrowing the larger P&C and life insurance companies.
Net Premiums Growth
Net premiums earned, a better indicator of revenue growth, was up an impressive 87% year-over-year.
Profitability and Growth
A target price of $52.00 supports a BUY rating, based on strong long-term book value growth, operating earnings growth, and a superior ROE.
Negative Factors
Underwriting Income
U.S. Programs experienced weaker net underwriting income due to adverse weather-related claims and some reserve development.

Trisura Group Ltd (TSU) vs. S&P 500 (SPY)

Trisura Group Ltd Business Overview & Revenue Model

Company DescriptionTrisura Group Ltd (TSU) is a specialty insurance provider headquartered in Canada with operations in both Canada and the United States. The company focuses on providing a range of insurance products and services, including surety, risk solutions, corporate insurance, and reinsurance. Trisura aims to offer innovative and comprehensive insurance solutions tailored to meet the specific needs of its clients across various industries.
How the Company Makes MoneyTrisura Group Ltd generates revenue primarily through underwriting and issuing insurance policies and collecting premiums from its clients. The company's key revenue streams include surety bonds, which provide a financial guarantee of performance or compliance, and various forms of corporate insurance products such as directors and officers liability insurance, professional liability insurance, and property and casualty insurance. Trisura also generates income through its reinsurance segment, in which it assumes risk from other insurance companies in exchange for a portion of the premium income. The company's earnings are further influenced by investment income derived from the management of premiums collected until claims are paid out. Significant partnerships with brokers and agents who distribute their products also play a crucial role in driving Trisura's revenue growth.

Trisura Group Ltd Financial Statement Overview

Summary
Trisura Group Ltd presents a robust financial position with strong profitability and low leverage. While revenue decline poses a risk, the company’s solid balance sheet and efficient cash management provide a buffer against market fluctuations. Continuous monitoring of revenue trends will be crucial for sustained growth.
Income Statement
75
Positive
The income statement shows solid gross and net profit margins, indicating strong profitability. However, the significant drop in total revenue from the previous year raises concerns about the company's revenue stability. The company has maintained a positive EBITDA margin, which supports operational efficiency.
Balance Sheet
80
Positive
Trisura Group Ltd displays a strong equity ratio, indicating a healthy proportion of equity to total assets. The debt-to-equity ratio is low, suggesting minimal reliance on debt financing. The return on equity shows improvement, reflecting effective use of shareholder funds.
Cash Flow
70
Positive
The cash flow statement indicates a decrease in free cash flow, suggesting potential challenges in generating cash from operations. However, the company maintains a positive operating cash flow to net income ratio, demonstrating effective cash management relative to net earnings.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
778.83M2.84B526.10M349.88M226.63M
Gross Profit
778.83M2.84B526.10M349.88M226.63M
EBIT
0.002.83B38.08M80.44M39.48M
EBITDA
163.19M94.49M38.39M86.01M43.22M
Net Income Common Stockholders
118.92M66.94M27.80M62.56M32.44M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.36B611.52M1.17B341.32M136.52M
Total Assets
4.59B3.58B4.28B3.00B1.71B
Total Debt
107.57M84.70M86.74M84.68M36.35M
Net Debt
-162.80M-519.32M-319.63M-256.64M-100.17M
Total Liabilities
3.81B2.97B3.80B2.64B1.42B
Stockholders Equity
785.27M619.43M483.29M358.79M289.86M
Cash FlowFree Cash Flow
115.89M257.20M148.80M303.39M82.05M
Operating Cash Flow
119.73M257.91M150.93M306.85M83.34M
Investing Cash Flow
-471.81M-117.34M-241.99M-148.65M-94.40M
Financing Cash Flow
22.04M48.06M141.59M45.15M63.63M

Trisura Group Ltd Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price34.63
Price Trends
50DMA
33.53
Positive
100DMA
35.48
Negative
200DMA
38.72
Negative
Market Momentum
MACD
0.27
Negative
RSI
56.18
Neutral
STOCH
89.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TSU, the sentiment is Neutral. The current price of 34.63 is above the 20-day moving average (MA) of 33.57, above the 50-day MA of 33.53, and below the 200-day MA of 38.72, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 56.18 is Neutral, neither overbought nor oversold. The STOCH value of 89.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:TSU.

Trisura Group Ltd Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSIFC
78
Outperform
C$52.37B23.7213.38%1.69%5.02%77.36%
TSFFH
77
Outperform
C$49.41B8.5416.48%1.04%13.82%-6.68%
TSTSU
73
Outperform
C$1.66B13.9416.93%13.42%72.70%
TSMFC
73
Outperform
$67.76B13.7911.03%4.15%7.64%9.22%
TSSLF
70
Outperform
$44.83B14.8612.87%4.19%-12.72%-0.16%
TSGWO
66
Neutral
C$48.56B12.4815.52%4.36%-2.40%42.24%
63
Neutral
$12.07B9.358.15%79.57%12.85%-5.13%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:TSU
Trisura Group Ltd
34.63
-7.92
-18.61%
TSE:SLF
Sun Life Financial
79.03
11.20
16.52%
TSE:MFC
Manulife Financial
40.39
9.50
30.73%
TSE:FFH
Fairfax Financial Holdings
2,060.01
595.35
40.65%
TSE:GWO
Great-West Lifeco
52.21
13.85
36.11%
TSE:IFC
Intact Financial Corporation
296.20
79.80
36.88%

Trisura Group Ltd Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: 2.73% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presentation was broadly positive, highlighting significant income growth, strong performance in the U.S. Surety business, and positive investment income. However, challenges were noted with exited lines and higher expense ratios, which tempered the overall positive outlook.
Highlights
Strong Financial Performance
Trisura Group Ltd. achieved record operating and reported net income of $136 million and $119 million, respectively, for the year. The company also reported a 26% growth in book value per share and an operating return on equity of 19%.
Significant Growth in U.S. Surety
U.S. Surety business grew 197% in 2024, moving Trisura to a rank in the top 35 of U.S. Sureties from a rank of 51 at the end of 2023.
Positive Investment Income
Net investment income grew by 29.8% year-to-date, with a focus on investment-grade corporate and government bonds contributing to the growth.
Operational Efficiency
An annual combined ratio of 89% was achieved, with specific segments like Trisura Specialty showing an operating combined ratio of 84%.
Expansion in Canadian and U.S. Markets
Continued growth in Canadian and U.S. markets, with an emphasis on expanding primary lines and strategic hires to enhance market presence.
Lowlights
Challenges with Exited Lines
The company faced issues with certain exited lines, resulting in negative reserve developments due to non-renewed and underperforming programs.
Higher Expense Ratios
Higher expense ratios were reported, driven partly by start-up costs associated with U.S. Corporate Insurance and U.S. Surety, as well as greater retention of U.S. programs.
Deceleration in Canadian Fronting Growth
Growth in the Canadian Fronting business decelerated through 2024, turning negative in Q4, attributed to market dynamics and previous strong quarters.
Company Guidance
During the call, Trisura Group Ltd. provided guidance reflecting strong performance in 2024 and a positive outlook for the future. The company reported a 26% growth in book value per share, driven by an annual combined ratio of 89%, record net income of $136 million, and a return on equity of 19%. Specialty Insurance, particularly Surety, Corporate Insurance, and Warranty, showed mid-teens growth, with U.S. Surety expanding by 197% and achieving a 15% annual loss ratio. The operating combined ratio was reported at 81% for ongoing U.S. programs. Trisura aims for over 15% growth in premium, operating return on equity, and book value per share, targeting $1 billion in book value by 2027. The company remains optimistic about expanding its North American Specialty Insurance presence and leveraging market opportunities amid volatility.

Trisura Group Ltd Corporate Events

Business Operations and StrategyFinancial Disclosures
Trisura Group Achieves Record Annual Results and Expands US Market Presence
Positive
Feb 13, 2025

Trisura Group Ltd. reported record-breaking annual financial results for 2024, with operating net income reaching $135.8 million. The company’s growth was driven by strong underwriting, increased net investment income, and strategic expansion in the US market. Despite challenges from non-renewed US programs, Trisura achieved significant increases in book value and net income. The company’s financial health is underscored by a conservative debt-to-capital ratio, supporting its capacity for further growth.

Financial Disclosures
Trisura Group Ltd. Schedules 2024 Earnings Release and Conference Call
Neutral
Feb 6, 2025

Trisura Group Ltd. announced it will release its fourth quarter and annual 2024 results on February 13, 2025, followed by an earnings conference call on February 14, 2025. The announcement highlights the company’s commitment to transparency and provides an opportunity for stakeholders to gain insights into Trisura’s financial performance and strategic direction.

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.