Will Palomar Holdings Pull Off a Surprise This Earnings Season?

Palomar Holdings, Inc. PLMR is expected to register an improvement in its top and bottom lines when it reports second-quarter 2025 results on Aug. 4, after the closing bell.

The Zacks Consensus Estimate for PLMR’s second-quarter revenues is pegged at $186.21 million, indicating a 42.1% increase from the year-ago reported figure.

The consensus estimate for the bottom line is pegged at $1.68 per share. The estimate suggests a year-over-year increase of 34.4%. The Zacks Consensus Estimate for PLMR’s second-quarter earnings has moved south by 1.2% in the past 60 days.

What the Zacks Model Unveils for PLMR

Our proven model predicts an earnings beat for PLMR this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) that increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: PLMR has an Earnings ESP of +0.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Palomar Holdings, Inc. Price and EPS Surprise

Palomar Holdings, Inc. price-eps-surprise | Palomar Holdings, Inc. Quote

Zacks Rank: PLMR carries a Zacks Rank #3.

Factors Likely to Shape PLMR’s Q2 Results

Palomar’s second-quarter earnings are likely to have benefited from its fee-based revenue stream.

Palomar’s premium in the to-be-reported quarter is likely to have benefited from increased volume of policies in the majority of lines of business, driven by new business generated with existing partners, strong premium retention rates for existing business, expansion of distribution footprint, as well as new partnerships. 

The company’s intensified focus on the crop business is likely to have aided its performance. 

The Zacks Consensus Estimate for premiums earned is pegged at $174 million. Our estimate is pegged at $172.4 million.

Investment income is likely to have increased, driven by a higher average balance of investments, as well as higher yields on invested assets. The Zacks Consensus Estimate is pegged at $12.06 million. Our estimate is pegged at $9.6 million.

A premium increase, higher net investment income, and commission and other income are expected to have driven total revenues in the to-be-reported quarter.

The insurer has a reinsurance policy in place, which is likely to have limited its catastrophe loss, aiding improvement in the combined ratio. The Zacks Consensus Estimate for the combined ratio is pegged at 78. Our estimate is pegged at 78.9.

Total expenses are likely to have increased due to higher losses and loss adjustment expenses, interest and acquisition expenses, and other underwriting expenses. Our estimate for total expense is $136.9 million. The loss ratio is likely to reflect rate increases and prudent underwriting. Our loss ratio estimate is pegged at 35.5. The company expects the expense ratio to be a little bit higher in the second quarter. Our expense ratio estimate is pegged at 43.4.

Other Stocks to Consider

Here are three other insurance stocks you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:

American International Group, Inc. AIG has an Earnings ESP of +0.18% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $1.58 per share, indicating a year-over-year increase of 36.2%. 

AIG’s earnings beat estimates in three of the last four quarters while missing in one.

Assurant, Inc. AIZ has an Earnings ESP of +1.99% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $4.43 per share, implying an increase of 8.5% from the year-ago reported figure.

AIZ’s earnings beat estimates in each of the last four quarters.

MarketAxess Holdings Inc. MKTX has an Earnings ESP of +0.95% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $1.94 per share, implying an increase of 12.7% from the year-ago reported figure.

MKTX’s earnings beat estimates in each of the last four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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