Greenlight Capital Re, Ltd. (NASDAQ: GLRE)

Sector: Financial Services Industry: Insurance - Reinsurance CIK: 0001385613
Market Cap 670.25 Mn
P/B 1.02
P/E -359.00
P/S 1.01
ROIC (Qtr) 0.71
Div Yield % 0.00
Rev 1y % (Qtr) -22.31
Total Debt (Qtr) 34.75 Mn
Debt/Equity (Qtr) 0.05
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About

Greenlight Capital Re, Ltd., known as GLRE, operates in the reinsurance industry, specifically as a global specialty property and casualty reinsurer. The company was founded in 2004 and has established two licensed and regulated entities, Greenlight Re in the Cayman Islands and GRIL in Dublin, Ireland, as well as a Lloyd's platform, Syndicate 3456. GLRE's main business activities involve providing risk management products and services to the insurance, reinsurance, and other risk marketplaces. The company's operations are divided into two segments:...

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Investment thesis

Bull case

  • Strong operating cash flow of 139.53M provides robust 4.02x coverage of total debt 34.74M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 2.13B provides 61.42x coverage of total debt 34.74M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 139.53M provides exceptional 27.65x coverage of interest expenses 5.05M, showing strong debt service capability.
  • Operating cash flow of 139.53M provides strong 32.17x coverage of stock compensation 4.34M, indicating sustainable incentive practices.
  • Free cash flow of 139.53M provides exceptional 27.65x coverage of interest expense 5.05M, showing strong debt service ability.

Bear case

  • Operating cash flow of 139.53M barely covers its investment activities of (71.55M), with a coverage ratio of -1.95, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 655.23M provide limited coverage of acquisition spending of (68.27M), which is -9.60x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 139.53M represents just -5.13x of debt issuance (27.19M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 139.53M is outpaced by equity issuance of (7M) (-19.93 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 222.04M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Insurance - Reinsurance
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RGA Reinsurance Group Of America Inc 16.26 Bn 28.93 1.93 5.73 Bn
2 RNR Renaissancere Holdings Ltd 14.46 Bn 5.46 1.13 2.33 Bn
3 EG Everest Group, Ltd. 14.18 Bn 25.69 0.80 3.59 Bn
4 HG Hamilton Insurance Group, Ltd. 3.15 Bn 7.19 1.15 0.15 Bn
5 SPNT SiriusPoint Ltd 2.31 Bn 12.64 0.81 0.68 Bn
6 GLRE Greenlight Capital Re, Ltd. 0.67 Bn -359.00 1.01 0.03 Bn
7 OXBR OXBRIDGE RE HOLDINGS Ltd 0.01 Bn -3.11 1.75 0.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.03 0.19
EV to Cash from Ops. EV/CFO 0.50 4.67
EV to Debt EV to Debt 2.02 6.23
EV to EBIT EV/EBIT 15.91 10.21
EV to EBITDA EV/EBITDA 15.75 9.47
EV to Free Cash Flow [EV/FCF] EV/FCF 0.50 4.67
EV to Market Cap EV to Market Cap 0.10 0.74
EV to Revenue EV/Rev 0.11 0.89
Price to Book Value [P/B] P/B 1.02 1.44
Price to Earnings [P/E] P/E -359.00 -40.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 5.81
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 10.57
Dividend per Basic Share Div per Share (Qtr) 0.00 1.54
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.76
Interest Coverage Int. cover (Qtr) 0.87 9.07
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 0.00
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 5.39 4.59
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -5.49
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -86.48 -15.00
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -95.40 -4.52
EBIT Growth (1y) % EBIT 1y % (Qtr) -95.44 -3.67
EBT Growth (1y) % EBT 1y % (Qtr) -100.72 -4.69
EPS Growth (1y) % EPS 1y % (Qtr) -101.56 -7.41
FCF Growth (1y) % FCF 1y % (Qtr) 34.03 -593.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -31.04 49.82
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.31 0.29
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.05 0.19
Interest Cover Ratio Int Coverage (Qtr) 0.87 9.07
Times Interest Earned Times Interest Earned (Qtr) 0.87 9.07
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.70 1.49
EBIT Margin % EBIT Margin % (Qtr) 0.67 1.33
EBT Margin % EBT Margin % (Qtr) -0.10 0.23
Gross Margin % Gross Margin % (Qtr) 34.30 38.56
Net Profit Margin % Net Margin % (Qtr) -0.30 -0.94