Dj Dir Fallon Acquires 1278 Of Palomar Holdings Inc >Plmr

What Happened?

Shares of specialty insurance provider Palomar Holdings jumped 3.4% in the afternoon session after analysts at Keefe, Bruyette & Woods raised their price target on the shares to $170 from a previous $164. The firm also maintained its Outperform rating on the stock. An Outperform rating suggests that the analyst expects the company's stock to perform better than the broader market. This vote of confidence, combined with a higher valuation target, often leads to increased investor interest. The upward revision of the price target indicated a more optimistic outlook on the company's future value from the financial firm, which contributed to the stock's positive performance.

The shares closed the day at $122.12, up 2.9% from previous close.

Is now the time to buy Palomar Holdings? Access our full analysis report here.

What Is The Market Telling Us

Palomar Holdings’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 4 months ago when the stock dropped 14.2% on the news that its mixed second-quarter financial report, where investors focused on weaker underwriting profitability despite a beat on earnings per share. The specialty insurer posted adjusted earnings of $1.76 per share, which topped analyst forecasts. However, the company's combined ratio, a key measure of profitability for insurers, landed at 78.8%, missing estimates. A higher combined ratio indicated that the company paid out more in claims and expenses relative to the premiums it earned. This detail overshadowed other positive news, including an increase in gross written premiums and a raised full-year profit forecast. The market reaction suggested that concerns about underwriting performance outweighed the strong earnings and improved outlook.

Palomar Holdings is up 17% since the beginning of the year, but at $122.12 per share, it is still trading 30.5% below its 52-week high of $175.67 from June 2025. Investors who bought $1,000 worth of Palomar Holdings’s shares 5 years ago would now be looking at an investment worth $1,684.

Palomar Holdings’s stock price has taken a beating over the past six months, shedding 20.1% of its value and falling to $128.73 per share. This may have investors wondering how to approach the situation.

Following the drawdown, is now the time to buy PLMR? Find out in our full research report, it’s free for active Edge members.

Why Is PLMR a Good Business?

Founded in 2013 to fill gaps in catastrophe insurance markets, Palomar Holdings is a specialty insurance provider that offers property and casualty insurance products in underserved markets, with a focus on earthquake coverage.

1. Net Premiums Earned Skyrocket, Fueling Growth Opportunities

Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what's collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.

Palomar Holdings’s net premiums earned has grown at a 46.1% annualized rate over the last two years, much better than the broader insurance industry.

2. Growing BVPS Reflects Strong Asset Base

We consider book value per share (BVPS) a critical metric for insurance companies. BVPS represents the total net worth per share, providing insight into a company’s financial strength and ability to meet policyholder obligations.

Palomar Holdings’s BVPS increased by 18.5% annually over the last five years, and growth has recently accelerated as BVPS grew at an incredible 39.5% annual clip over the past two years (from $17.04 to $33.14 per share).

3. Projected BVPS Growth Is Remarkable

Book value per share (BVPS) growth is driven by an insurer’s ability to earn consistent underwriting profits while generating strong investment returns.

Over the next 12 months, Consensus estimates call for Palomar Holdings’s BVPS to grow by 25.4% to $33.49, elite growth rate.

Final Judgment

These are just a few reasons why Palomar Holdings ranks near the top of our list. With the recent decline, the stock trades at 3.7× forward P/B (or $128.73 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Palomar Holdings’ third quarter results were positively received by the market, as management credited robust premium growth and expanding margins to its diversified specialty insurance portfolio and disciplined underwriting. CEO Mac Armstrong highlighted the company’s broad mix of admitted and excess and surplus (E&S) property and casualty offerings, noting, “All our product groups, save for fronting, experienced double-digit growth in the third quarter.” The addition of new specialty lines, including crop and surety, further enhanced the company’s balanced risk exposure and earnings consistency.

Is now the time to buy PLMR? Find out in our full research report (it’s free for active Edge members).

Palomar Holdings (PLMR) Q3 CY2025 Highlights:

• Revenue: $244.7 million vs analyst estimates of $221.9 million (64.8% year-on-year growth, 10.2% beat)
• Adjusted EPS: $2.01 vs analyst estimates of $1.61 (24.8% beat)
• Adjusted Operating Income: $67.14 million (27.4% margin, 74.4% year-on-year growth)
• Operating Margin: 27.4%, up from 25.9% in the same quarter last year
• Market Capitalization: $3.51 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Palomar Holdings’s Q3 Earnings Call

• Jon Paul Newsome (Piper Sandler) asked about the competitive landscape and expansion strategy in surety. CEO Mac Armstrong detailed plans for cross-selling, regional expansion, and leveraging Gray Surety’s market entry model to reach top-20 status.

• Jon Paul Newsome (Piper Sandler) inquired if crop insurance could be a long-term growth driver. Armstrong said crop could reach $500 million in premiums, citing talent acquisition and technology as key enablers.

• Andrew Andersen (Jefferies) questioned the loss ratio guidance and exposure to catastrophe losses. CFO Chris Uchida confirmed expected loss ratios include mini catastrophes and that major events are not anticipated in current forecasts.

• Mark Hughes (Truist Securities) sought clarification on the net earned premium ratio’s trajectory. Uchida explained that the third quarter is typically the low point, with ratios expected to rise in subsequent quarters due to reinsurance and crop seasonality.

• Meyer Shields (KBW) asked about the sustainability of private flood policy retention during the National Flood Insurance Program shutdown. President Jon Christianson indicated strong policy stickiness and increased private market confidence.

Catalysts in Upcoming Quarters

Looking ahead, our team will be watching (1) the successful integration and financial impact of the Gray Surety acquisition, (2) sustained growth in crop and specialty insurance lines as new talent and partnerships mature, and (3) the company's ability to navigate ongoing rate pressures in commercial earthquake. Execution on technology investments and expansion into new markets will also be important indicators of future performance.

Palomar Holdings currently trades at $132.80, up from $117.93 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return).