Shares of Universal Insurance Holdings (UVE) have been strong performers lately, with the stock up 22.8% over the past month. The stock hit a new 52-week high of $32.42 in the previous session. Universal Insurance has gained 52.2% since the start of the year compared to the 13.7% gain for the Zacks Finance sector and the 6.8% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on October 23, 2025, Universal Insurance reported EPS of $1.36 versus consensus estimate of $1.1.
For the current fiscal year, Universal Insurance is expected to post earnings of $4.63 per share on $1.53 in revenues. This represents a 158.66% change in EPS on a 0.85% change in revenues. For the next fiscal year, the company is expected to earn $2.86 per share on $1.52 in revenues. This represents a year-over-year change of -38.23% and -0.94%, respectively.
Valuation Metrics
Universal Insurance may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Universal Insurance has a Value Score of A. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 6.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11X. On a trailing cash flow basis, the stock currently trades at 14.4X versus its peer group's average of 12.4X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Universal Insurance an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Universal Insurance currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Universal Insurance passes the test. Thus, it seems as though Universal Insurance shares could have potential in the weeks and months to come.
How Does UVE Stack Up to the Competition?
Shares of UVE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is United Fire Group, Inc (UFCS). UFCS has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. United Fire Group, Inc beat our consensus estimate by 57.89%, and for the current fiscal year, UFCS is expected to post earnings of $3.03 per share on revenue of $1.37 billion.
Shares of United Fire Group, Inc have gained 1.8% over the past month, and currently trade at a forward P/E of 10.34X and a P/CF of 10.29X.
The Insurance - Property and Casualty industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UVE and UFCS, even beyond their own solid fundamental situation.
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UNIVERSAL INSURANCE HOLDINGS INC (UVE): Free Stock Analysis Report United Fire Group, Inc (UFCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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