Is a Beat in the Cards for Palomar This Earnings Season?

Palomar Holdings PLMR is expected to register an improvement in its top and bottom lines when it reports first-quarter 2025 results on May 5, after the closing bell.

The Zacks Consensus Estimate for PLMR’s first-quarter revenues is pegged at $171.2 million, indicating a 48.7% increase from the year-ago reported figure.

The consensus estimate for the bottom line is pegged at $1.59 per share. The estimate suggests a year-over-year increase of 45.9%. The Zacks Consensus Estimate for PLMR’s first-quarter earnings has moved south by 2 cents in the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

What the Zacks Model Unveils for PLMR

Our proven model predicts an earnings beat for PLMR this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) that increases the chances of an earnings beat. 

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: PLMR has an Earnings ESP of +6.29%. This is because the Most Accurate Estimate of $1.69 is pegged higher than the Zacks Consensus Estimate of $1.59.

Palomar Holdings, Inc. Price and EPS Surprise

Palomar Holdings, Inc. price-eps-surprise | Palomar Holdings, Inc. Quote

Zacks Rank: PLMR carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape PLMR’s Q1 Results

Palomar’s first-quarter earnings are likely to have benefited from its fee-based revenue stream.

Palomar’s premium in the to-be-reported quarter is likely to have benefited from increased volume of policies written across the lines of business, strong retention rates, strategic expansion of products’ geographic and distribution footprint and new partnerships. Yet, the California wildfire is likely to have weighed on pricing.

The company’s intensified focus on the crop business is likely to have aided its performance. Its Residential Earthquake business is likely to have gained from insurers pulling back their exposure in California due to a dislocation in the homeowners market.

 The Zacks Consensus Estimate for premiums earned is pegged at $160 million. Our estimate is pegged at $161.7 million.

Investment income is likely to have increased driven by high-quality fixed income securities, higher average balance of investments and an increase in fixed-income yields. The Zacks Consensus Estimate is pegged at $11.3 million. Our estimate is pegged at $8.5 million.

An increase in premium, higher net investment income and commission and other income are expected to have driven total revenues in the to-be-reported quarter.

The insurer has a reinsurance policy in place that has likely limited its catastrophe loss, aiding improvement in the combined ratio. The Zacks Consensus Estimate for combined ratio is pegged at 75. Our estimate is pegged at 76.9.

Total expenses are likely to have increased due to higher losses and loss adjustment expenses, interest and acquisition expenses and other underwriting expenses. Our estimate for total expense is $124.9 million. The loss ratio is likely to reflect rate increases and prudent underwriting. Our loss ratio estimate is pegged at 24.8.

Other Stocks to Consider

Here are three other insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Enact Holdings ACT has an Earnings ESP of +2.68% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $1.12, indicating a year-over-year increase of 7.7%

ACT’s earnings beat estimates in three of the last four reported quarters, while missing in one.

Assurant AIZ has an Earnings ESP of +1.53% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at $3.00, indicating a year-over-year decrease of 37.2%.

AIZ’s earnings beat estimates in each of the last four reported quarters.

CNO Financial Group CNO has an Earnings ESP of +1.47% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 13 cents, indicating a year-over-year decrease of 13.3%.

CNO’s earnings beat estimates in three of the last four reported quarters and missed in one.

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

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