NasdaqGS:ACGL

Stock Analysis Report

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Market Cap

US$15.7b

Last Updated

2021/07/31 05:40 UTC

Data Sources

Company Financials +

Executive Summary

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. More Details


Snowflake Analysis

Solid track record and good value.


Similar Companies

Share Price & News

How has Arch Capital Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ACGL is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: ACGL's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

1.2%

ACGL

0.8%

US Insurance

-0.5%

US Market


1 Year Return

26.8%

ACGL

30.9%

US Insurance

35.9%

US Market

Return vs Industry: ACGL underperformed the US Insurance industry which returned 30.9% over the past year.

Return vs Market: ACGL underperformed the US Market which returned 35.9% over the past year.


Shareholder returns

ACGLIndustryMarket
7 Day1.2%0.8%-0.5%
30 Day-2.4%-0.4%0.3%
90 Day-1.8%-2.5%3.1%
1 Year26.8%26.8%34.2%30.9%38.0%35.9%
3 Year30.2%30.2%34.5%24.5%62.9%52.7%
5 Year57.2%57.2%74.9%53.2%121.7%97.3%

Long-Term Price Volatility Vs. Market

How volatile is Arch Capital Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arch Capital Group undervalued compared to its fair value and its price relative to the market?

40.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ACGL ($39) is trading below our estimate of fair value ($65.01)

Significantly Below Fair Value: ACGL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ACGL is good value based on its PE Ratio (7.7x) compared to the US Insurance industry average (10.7x).

PE vs Market: ACGL is good value based on its PE Ratio (7.7x) compared to the US market (18x).


Price to Earnings Growth Ratio

PEG Ratio: ACGL's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ACGL's PB Ratio (1.2x) is in line with the US Insurance industry average.


Future Growth

How is Arch Capital Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-2.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACGL's earnings are forecast to decline over the next 3 years (-2.7% per year).

Earnings vs Market: ACGL's earnings are forecast to decline over the next 3 years (-2.7% per year).

High Growth Earnings: ACGL's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ACGL's revenue (6.6% per year) is forecast to grow slower than the US market (9.2% per year).

High Growth Revenue: ACGL's revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ACGL's Return on Equity is forecast to be low in 3 years time (11%).


Past Performance

How has Arch Capital Group performed over the past 5 years?

25.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACGL has high quality earnings.

Growing Profit Margin: ACGL's current net profit margins (21.3%) are higher than last year (15.5%).


Past Earnings Growth Analysis

Earnings Trend: ACGL's earnings have grown significantly by 25.5% per year over the past 5 years.

Accelerating Growth: ACGL's earnings growth over the past year (81.6%) exceeds its 5-year average (25.5% per year).

Earnings vs Industry: ACGL earnings growth over the past year (81.6%) exceeded the Insurance industry 67%.


Return on Equity

High ROE: ACGL's Return on Equity (15.3%) is considered low.


Financial Health

How is Arch Capital Group's financial position?


Financial Position Analysis

Short Term Liabilities: ACGL's short term assets ($14.5B) exceed its short term liabilities ($7.3B).

Long Term Liabilities: ACGL's short term assets ($14.5B) do not cover its long term liabilities ($24.3B).


Debt to Equity History and Analysis

Debt Level: ACGL's debt to equity ratio (20.4%) is considered satisfactory.

Reducing Debt: ACGL's debt to equity ratio has increased from 19.8% to 20.4% over the past 5 years.

Debt Coverage: ACGL's debt is well covered by operating cash flow (104.1%).

Interest Coverage: ACGL's interest payments on its debt are well covered by EBIT (17x coverage).


Balance Sheet


Dividend

What is Arch Capital Group current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ACGL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ACGL's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ACGL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ACGL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ACGL's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Marc Grandisson (53 yo)

3.33yrs

Tenure

US$8,779,832

Compensation

Mr. Marc Grandisson serves as a Director of Arch Capital Group Ltd since March 2018. Mr. Grandisson has been Chief Executive Officer since March 3, 2018 and served as President of Arch Capital Group Ltd si...


CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD8.78M) is about average for companies of similar size in the US market ($USD11.17M).

Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: ACGL's management team is considered experienced (3.2 years average tenure).


Board Members

Experienced Board: ACGL's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ACGL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arch Capital Group Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arch Capital Group Ltd.
  • Ticker: ACGL
  • Exchange: NasdaqGS
  • Founded: 1995
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$15.677b
  • Shares outstanding: 401.98m
  • Website: https://www.archcapgroup.com

Number of Employees


Location

  • Arch Capital Group Ltd.
  • Waterloo House
  • Ground Floor
  • Pembroke
  • HM 08
  • Bermuda

Listings


Biography

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company’s Insurance segment offers primary and excess casualty cover...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 05:40
End of Day Share Price2021/07/30 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.