Why Kinsale Capital Group (KNSL) Shares Are Trading Lower Today

What Happened?

Shares of specialty insurance provider Kinsale Capital Group (NYSE:KNSL) fell 8.1% in the afternoon session after its third-quarter results, while strong, failed to meet the market's lofty expectations. 

The company reported impressive results for the third quarter, with revenue of $497.5 million and adjusted earnings per share of $5.21, beating analysts' expectations by 10.9% and 8%, respectively. Revenue grew 19% year-over-year, driven by a 17.8% increase in net premiums earned. However, despite the strong top- and bottom-line performance, the company's book value per share of $80.19 came in slightly below consensus estimates. For a highly-valued stock like Kinsale, even minor blemishes can trigger a sell-off, and it appears investors were expecting a flawless report.

The shares closed the day at $422.38, down 6.8% from previous close.

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What Is The Market Telling Us

Kinsale Capital Group’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 22 days ago when the stock gained 3% on the news that Truist Securities reiterated its "Buy" rating and a $560 price target on the stock following positive meetings with the company's management. The investment firm noted that Kinsale's leadership expressed optimism that property insurance markets would normalize faster than expected. This confidence was backed by double-digit growth in the company's third-quarter property premium in key states like Texas and Florida. Furthermore, Kinsale executives affirmed their long-term top-line growth target of 10% to 20%. Truist's analysis also suggested that data from the excess and surplus (E&S) insurance market pointed to Kinsale's third-quarter growth accelerating significantly compared to prior periods.

Kinsale Capital Group is down 7% since the beginning of the year, and at $422.38 per share, it is trading 19.4% below its 52-week high of $524.22 from December 2024. Investors who bought $1,000 worth of Kinsale Capital Group’s shares 5 years ago would now be looking at an investment worth $2,032.

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