KINS Trades at a Premium to Industry: Will You Still Buy the Stock?

Kingstone Companies KINS shares are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 3.48X is higher than the industry average of 1.58X.

The company has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Growth Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 (Buy) offer better returns.

Kingstone Companies is the 12th largest homeowner insurer in New York, as accredited by the S&P, with a market share of 2.1% in 2024. It has a market capitalization of $232.3 million. The average volume of shares traded in the last three months was 0.4 million.
 

Shares of other insurers like Kinsale Capital KNSL and Heritage Insurance Holdings HRTG are also trading at a multiple higher than the industry average.

KINS’ Price Performance

KINS shares have underperformed the industry year to date but outperformed the Finance sector as well as the Zacks S&P 500 composite index in the same time frame. 

KINS vs Industry, Sector & S&P 500 Year to Date

Optimistic Growth Estimate

The Zacks Consensus Estimate for 2025 earnings stands at $1.90, suggesting an increase of 31% on 37.9% higher revenues of $214 million. The consensus estimate for 2026 earnings stands at $2.45, suggesting an increase of 29% on 11.4% higher revenues of $238.4 million. 

The company has a Growth Score of A.

KINS expects 2025 earnings per share between $1.75 and $2.15.

Factors in Favor of Kingstone 

Kingstone Companies noted that the commercial insurance market in Northeastern U.S. is estimated to grow by 12.3% through 2025. Thus, with multiple competitors withdrawing from the national personal property insurance segment last year, Kingstone is well-positioned to capitalize on this market shift by expanding its footprint.

Despite this growth potential, Kingstone remains reliant on a narrow set of insurance lines, which exposes it to both geographic and product concentration risks. 

Kingstone is pursuing a focused growth strategy, emphasizing its core business while exiting underperforming, non-core segments. The insurer follows strict underwriting standards, accepting only business that meets its profitability and risk thresholds.

To stay ahead of inflation, Kingstone has successfully implemented pricing increases that align premiums with risk levels. Its partnership with Earnix has enhanced its pricing sophistication, reinforcing the company’s strategic growth efforts.

In 2025, Kingstone expects direct written premiums in its core business to grow between 15% and 25%. It has also made progress in reducing its net underwriting expense ratio by boosting average premiums and cutting commissions and staffing expenses.

A strong reinsurance program shields Kingstone’s balance sheet, and the company now forecasts an improved combined ratio of 81% to 85% in 2025. Its financial position has also strengthened, with higher cash reserves and no debt.

Kingstone's profitability has seen significant improvement, with net margin increasing by 2,910 basis points over the past two years. This rebound has been driven by disciplined underwriting, sound risk management, and market dislocation. After three consecutive years of losses, Kingstone returned to profitability in 2024.

KINS’ Favorable Return on Capital

Return on equity (ROE) in the trailing 12 months was 35.7%, higher than the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders. Kingstone Companies expects ROE between 27% and 35% in 2025.

Its return on invested capital (ROIC) has been improving for quite some time. This reflects KINS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 29.4%, higher than the industry average of 5.9%.

How to Play KINS Stock

Kingstone Companies’ focus on growing its core business and strengthening its niche market position, improving pricing and combined ratio, expanding margins and delivering strong earnings bodes well for growth. Its VGM Score of A and solid guidance instill confidence in the stock.

The average target price of $14 reflects a 12.6% upside potential from its last closing price. 

Despite its expensive valuation, this Zacks Rank #1 stock is worthy of adding to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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