It has been about a month since the last earnings report for Axis Capital (AXS). Shares have added about 9.2% 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 Axis Capital due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Axis Capital Holdings Limited before we dive into how investors and analysts have reacted as of late.
AXIS Capital Q3 Earnings Beat Estimates on Higher Underwriting Income
AXIS Capital posted third-quarter 2025 operating income of $3.25 per share, beating the Zacks Consensus Estimate by 19.4%. The bottom line increased 20% year over year. The insurer’s results reflected improved underwriting income, higher premiums, lower catastrophe losses, and reduced expenses, offset by lower investment income.
Quarterly Operational Update
Total operating revenues of $1.6 billion beat the Zacks Consensus Estimate by 0.6%. The top line rose 4% year over year on higher premiums earned.
Net premiums written increased 9% to $1.4 billion, attributable to an 11% increase in the insurance segment and 3% in the reinsurance segment. Net investment income decreased 9.7% year over year to $185 million, due to lower income from fixed maturities. The Zacks Consensus Estimate was pegged at $211 million. Our estimate was $244 million.
Total expenses in the quarter under review decreased 5.7% year over year to $1.3 billion due to lower interest expense and financing costs and amortization of intangible assets. Our estimate was pegged at $1.4 billion.
Pre-tax catastrophe and weather-related losses and net of reinsurance were $44 million, including $20 million attributable to the Middle East Conflict. The loss was narrower than the year-ago loss of $78 million. AXIS Capital’s underwriting income of $188 million increased 39% year over year. The combined ratio improved 370 basis points (bps) to 89.4. The Zacks Consensus Estimate was pegged at 95. Our estimate was 98.3.
Segment Results
Insurance: Gross premiums written improved 10.8% year over year to $1.7 billion. The increase was attributable to all lines of business with the exception of cyber lines, which decreased in the quarter, principally due to a lower level of premiums associated with program business. Our estimate was $1.6. billion. Net premiums earned increased 6% year over year to $1 billion. Our estimate was $1 billion. Underwriting income of $153.3 million increased 55.2% year over year. The combined ratio improved 450 bps to 85.9. The Zacks Consensus Estimate for the combined ratio was pegged at 89.
Reinsurance: Gross premiums written increased 5.6% year over year to $432.3 million. The increase was primarily attributable to new business in agriculture, and credit and surety lines, together with premium adjustments in liability lines. It was partially offset by non-renewals in accident and health lines. Our estimate was $457.3 million. Net premiums earned increased 6.8% year over year to $366.3 million. Our estimate was $387.3 million. Underwriting income of $35 million decreased 3.7% year over year. The combined ratio deteriorated 80 bps year over year to 92.2. The Zacks Consensus Estimate for the combined ratio was pegged at 96.
Financial Update
AXIS Capital exited the third quarter with cash and cash equivalents of $825.9 million, down 61% from the 2024-end level. Debt was $1.3 billion at quarter-end, up 0.08% from the 2024-end level. Book value per share increased 13% from 2024-end to $73.82 as of Sept. 30, 2025. Annualized operating return on average common equity was 17.8% in the third quarter, which expanded 50 bps year over year.
Capital Deployment
As of Sept. 30, 2025, AXIS Capital had $400 million of remaining authorization under our open-ended board-authorized share repurchase program for share repurchases.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Axis Capital has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Axis Capital has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Axis Capital belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, First American Financial (FAF), has gained 7.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
First American Financial reported revenues of $1.98 billion in the last reported quarter, representing a year-over-year change of +40.7%. EPS of $1.70 for the same period compares with $1.34 a year ago.
First American Financial is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of +7.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for First American Financial. Also, the stock has a VGM Score of B.
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Axis Capital Holdings Limited (AXS): Free Stock Analysis Report First American Financial Corporation (FAF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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