Proassurance Corp (NYSE: PRA)

Sector: Financial Services Industry: Insurance - Property & Casualty CIK: 0001127703
Market Cap 1.25 Bn
P/B 0.96
P/E 37.08
P/S 1.12
ROIC (Qtr) 1.25
Div Yield % 0.00
Rev 1y % (Qtr) -2.00
Total Debt (Qtr) 436.84 Mn
Debt/Equity (Qtr) 0.33
Add ratio to table...

About

Investment thesis

Bull case

  • Strong tangible asset base of 5.50B provides 12.58x coverage of total debt 436.84M, indicating robust asset backing and low credit risk.
  • Tangible assets of 5.50B provide exceptional 11.99x coverage of deferred revenue 458.38M, showing strong service capability backing.
  • Cash reserves of 54.46M provide ample 12.78x coverage of acquisition spending 4.26M, enabling strategic growth opportunities.
  • Strong tangible asset base of 5.50B provides 1289.74x coverage of acquisition spending 4.26M, enabling strategic growth.
  • Retained earnings of 1.45B provide strong 26.25x coverage of intangibles 55.32M, indicating quality earnings retention.

Bear case

  • Operating cash flow of (12.71M) barely covers its investment activities of 37.26M, with a coverage ratio of -0.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (12.71M) provides insufficient coverage of deferred revenue obligations of 458.38M, which is -0.03x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (12.71M) shows concerning coverage of stock compensation expenses of 8.13M, with a -1.56 ratio indicating potential earnings quality issues.
  • Free cash flow of 697000 provides weak coverage of capital expenditures of (13.41M), with a -0.05 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (12.71M) provides minimal -1.21x coverage of tax expenses of 10.49M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

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 0.30 0.50
EV to Cash from Ops. EV/CFO -129.54 -16.03
EV to Debt EV to Debt 3.77 11.42
EV to EBIT EV/EBIT 25.27 22.13
EV to EBITDA EV/EBITDA 20.60 17.53
EV to Free Cash Flow [EV/FCF] EV/FCF 2,362.92 68.07
EV to Market Cap EV to Market Cap 1.32 0.91
EV to Revenue EV/Rev 1.47 2.31
Price to Book Value [P/B] P/B 0.96 2.97
Price to Earnings [P/E] P/E 37.08 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) 3.11 -9.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 265.57 -17.83
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.22 30.27
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 16.34
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -19.53 62.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -17.87 35.62
EBIT Growth (1y) % EBIT 1y % (Qtr) -16.19 56.25
EBT Growth (1y) % EBT 1y % (Qtr) -18.26 52.70
EPS Growth (1y) % EPS 1y % (Qtr) -20.48 48.20
FCF Growth (1y) % FCF 1y % (Qtr) 103.19 15.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.24 16.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.20 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) 0.33 0.23
Interest Cover Ratio Int Coverage (Qtr) 3.11 -9.19
Times Interest Earned Times Interest Earned (Qtr) 3.11 -9.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.10 14.01
EBIT Margin % EBIT Margin % (Qtr) 5.83 13.05
EBT Margin % EBT Margin % (Qtr) 3.95 12.25
Gross Margin % Gross Margin % (Qtr) 35.80 40.49
Net Profit Margin % Net Margin % (Qtr) 3.00 9.63