Arch Capital Trades Above 50-Day SMA: Time to Buy ACGL Stock?

Arch Capital Group Ltd. ACGL has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend. Its share price as of Thursday was $91.88, down 9.6% from its 52-week high of $101.66.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

ACGL’s Price Performance

Arch Capital shares have lost 7.8% in the past year against the industry’s growth of 4.1%.

Arch Capital has outperformed its peers, Skyward Specialty Insurance Group, Inc. SKWD and Kinsale Capital Group, Inc. KNSL, which have lost 13% and 25.7%, respectively, in the past year.

Average Target Price for ACGL Suggests Upside

Based on short-term price targets offered by 18 analysts, the Zacks average price target is $106.67 per share. The average suggests a potential 17% upside from the last closing price.

Return on Capital of ACGL

Arch Capital’s trailing 12-month return on equity is 16.3%, ahead of the industry average of 8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.

ACGL Growth Projection

The Zacks Consensus Estimate for Arch Capital’s 2025 revenues is pegged at $18.72 billion, implying a year-over-year improvement of 12.6%. 

The consensus estimate for 2026 earnings per share and revenues indicates a year-over-year increase of 4.5% and 4.8%, respectively, from the corresponding 2025 estimates. Earnings have grown 33.5% in the past five years, better than the industry average of 20.9%.

Earnings Surprise History

Arch Capital surpassed earnings estimates in each of the last four quarters, the average being 18.19%.

Optimistic Analyst Sentiment on ACGL

Six of the seven analysts covering the stock have lowered estimates for 2025, while six of the eight analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 6.4% and 1.9% north, respectively, in the last 30 days.

Key Points to Note for ACGL Stock

Arch Capital’s well-rounded product portfolio and consistent premium growth highlight the strength of its organic drivers. Rate increases, new business inflows, and expansion within existing accounts continue to fuel its momentum. Additionally, its ability to scale organically across specialty insurance and reinsurance underscores sustained growth potential.

Building on this momentum, Arch Capital has delivered steady premium acceleration, with net premiums written registering a 12.9% CAGR from 2018 to 2024. The combination of firm market rates, inflation-led demand and disciplined underwriting has strengthened growth across P&C lines.

Arch Capital is also benefiting from favorable dynamics in the P&C market, where a hardening environment is supporting higher premiums and stronger demand for coverage. While industry-wide pressures such as catastrophe losses and inflation have intensified claims costs, they have also driven rate momentum. With its underwriting discipline, global distribution and focus on specialty lines, Arch Capital is well-placed to capitalize on these conditions.

End Notes

Overall, Arch Capital continues to benefit from strong organic growth drivers, steady premium momentum, and a solid competitive position in key markets. 

Arch Capital boasts a strong product portfolio and has a solid track record of premium growth, as well as favorable return on capital. Both the Insurance and Reinsurance segments should continue to witness significant growth from increases in most lines of business. A robust capital position over the years reflects its financial flexibility.

Coupled with its solid growth projections, optimistic analyst sentiment and favorable ROE, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arch Capital has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.

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

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