Palomar Holdings, Inc. (NASDAQ: PLMR)

Sector: Financial Services Industry: Insurance - Property & Casualty CIK: 0001761312
Market Cap 3.46 Bn
P/B 3.94
P/E 19.67
P/S 4.44
ROIC (Qtr) 20.09
Div Yield % 0.00
Rev 1y % (Qtr) 64.75
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
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About

Investment thesis

Bull case

  • Operating cash flow of 364.34M provides exceptional 934.21x coverage of interest expenses 390000, showing strong debt service capability.
  • Operating cash flow of 364.34M provides strong 21.84x coverage of stock compensation 16.68M, indicating sustainable incentive practices.
  • Robust free cash flow of 358.14M exceeds capital expenditure of 6.21M by 57.72x, indicating strong organic growth funding capability.
  • Free cash flow of 358.14M provides exceptional 918.30x coverage of interest expense 390000, showing strong debt service ability.
  • Operating cash flow of 364.34M provides strong 208.31x coverage of tax liabilities 1.75M, showing excellent fiscal position.

Bear case

  • Operating cash flow of 364.34M barely covers its investment activities of (311.80M), with a coverage ratio of -1.17, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 111.76M provide limited coverage of acquisition spending of (74.17M), which is -1.51x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 364.34M provides insufficient coverage of deferred revenue obligations of 979.37M, which is 0.37x, raising concerns about future service delivery capabilities.
  • Cash position of 111.76M provides weak coverage of payables of 362.84M, which is 0.31x, indicating potential working capital stress and supplier relationship risks.
  • Retained earnings of 365.84M provide limited buffer against comprehensive income items of (4.09M), which is -89.40x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Insurance - Property & Casualty
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PGR Progressive Corp/Oh/ 121.46 Bn 30.80 3.11 6.90 Bn
2 CB Chubb Ltd 109.27 Bn 36.88 5.64 21.01 Bn
3 ALL Allstate Corp 69.21 Bn 29.01 1.62 8.09 Bn
4 TRV Travelers Companies, Inc. 67.61 Bn 10.75 1.38 9.27 Bn
5 HIG Hartford Insurance Group, Inc. 61.19 Bn 37.09 3.27 4.37 Bn
6 WRB Berkley W R Corp 38.52 Bn 124.63 8.69 2.87 Bn
7 CINF Cincinnati Financial Corp 26.91 Bn 74.14 6.73 0.88 Bn
8 MKL Markel Group Inc. 26.46 Bn 13.00 1.68 4.28 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.15 0.50
EV to Cash from Ops. EV/CFO 9.27 -16.03
EV to Debt EV to Debt 0.00 11.42
EV to EBIT EV/EBIT 14.94 22.13
EV to EBITDA EV/EBITDA 14.61 17.53
EV to Free Cash Flow [EV/FCF] EV/FCF 9.43 68.07
EV to Market Cap EV to Market Cap 0.98 0.91
EV to Revenue EV/Rev 4.34 2.31
Price to Book Value [P/B] P/B 3.94 2.97
Price to Earnings [P/E] P/E 19.67 29.62
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 7.41
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 19.66
Dividend per Basic Share Div per Share (Qtr) 0.00 1.49
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 37.69
Interest Coverage Int. cover (Qtr) 579.71 -9.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -8.31 -17.83
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 29.08 30.27
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 16.34
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 60.22 62.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 58.27 35.62
EBIT Growth (1y) % EBIT 1y % (Qtr) 59.70 56.25
EBT Growth (1y) % EBT 1y % (Qtr) 61.57 52.70
EPS Growth (1y) % EPS 1y % (Qtr) 53.36 48.20
FCF Growth (1y) % FCF 1y % (Qtr) 74.65 15.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 50.36 16.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.26 0.38
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.45
Cash Ratio Cash Ratio 0.00 0.02
Current Ratio Current Ratio 0.00 0.06
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.23
Interest Cover Ratio Int Coverage (Qtr) 579.71 -9.19
Times Interest Earned Times Interest Earned (Qtr) 579.71 -9.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.70 14.01
EBIT Margin % EBIT Margin % (Qtr) 29.05 13.05
EBT Margin % EBT Margin % (Qtr) 29.00 12.25
Gross Margin % Gross Margin % (Qtr) 75.00 40.49
Net Profit Margin % Net Margin % (Qtr) 22.60 9.63