It has been about a month since the last earnings report for Everest Group (EG). Shares have added about 3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Everest Group due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Everest Group, Ltd. before we dive into how investors and analysts have reacted as of late.
EG Q3 Earnings & Revenues Miss Estimates on Poor Underwriting Show
Everest Group, Ltd.’s third-quarter 2025 operating income of $7.54 per share missed the Zacks Consensus Estimate by 43.7%. Also, the bottom line decreased 48.4% year over year. The company witnessed declining premiums, underwriting loss and higher expenses, offset by narrower catastrophe losses and improved net investment income.
EG’s Q3 Operational Update
Everest Group’s total operating revenues of $4.3 billion climbed 0.7% year over year on higher net investment income. The top line, however, missed the consensus mark by 2.9%. Gross written premiums declined 1.1% year over year to $4.4 billion. Premium growth in property and specialty lines across both the Reinsurance and Insurance segments was offset by reductions in certain casualty lines. Our estimate was $4.8 billion.
Net investment income was $540 million, which increased 8.8% year over year. The upside was driven by a larger asset base and strong alternative investment returns. Our estimate was $490.5 million. The Zacks Consensus Estimate was pegged at $511 million.
Total claims and expenses rose 9.2% to $4 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, and corporate expenses. Our estimate was $3.8 billion. Underwriting loss of $130 million was against the year-ago quarter’s underwriting income of $272 million.
Pre-tax catastrophe losses net of recoveries and reinstatement premiums were $50 million, narrower than the loss of $279 million in the year-ago quarter. The combined ratio deteriorated 1030 basis points (bps) year over year to 103.4 in the reported quarter. The Zacks Consensus Estimate was 93, while our estimate was 91.8.
Q3 Segmental Update of Everest Group
The Reinsurance segment’s gross written premiums were $3.2 billion, down 1.8% year over year. The metric reflected a 10.2% increase in Property Catastrophe XOL and a 24.3% increase in Property Non-Catastrophe XOL. It was partially offset by a 16.3% decrease in Casualty Pro-Rata and a 10.2% decrease in Casualty XOL when adjusting for reinstatement premiums. Our estimate was $3.6 billion. The combined ratio of the Reinsurance segment improved 480 bps to 87. The Zacks Consensus Estimate was 90. Our estimate was 91.
The Insurance segment generated gross written premiums of $1.1 billion, up 3.3% year over year. The metric grew by 46.4% in Accident and Health and 15.8% in Other Specialty. Growth was partially offset by decreases of 15.8% in Specialty Casualty, primarily reflecting the execution of 1-Renewal Strategy focused on U.S. casualty lines, as well as 13.6% in Workers' Compensation. Our estimate was $1.2 billion. The combined ratio deteriorated 4120 bps to 138.1 for the Insurance segment. Our estimate was 98.5. The Zacks Consensus Estimate was pegged at 102.
Financial Update
Everest Group exited the third quarter of 2025 with total investments and cash of $45.8 billion, up 10.3% from the 2024-end level. Shareholder equity at the end of the reported quarter increased 10.8% from the figure at the end of 2024 to $15.4 billion. Book value per share was $366.22 as of Sept. 30, 2025, up 13.4% from the 2024-end level. The annualized net income return on equity was 8.2%, which contracted 820 bps from the year-ago quarter. Everest Group’s cash flow from operations was $1.5 billion in the quarter, down 16% year over year. The company paid common share dividends of $83.7 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Everest Group has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Everest Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Everest Group, Ltd. (EG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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