ACGL Arch Capital Group Ltd. - Fundamental Analysis
BULLISH
ACGL Stock | Fundamental Analysis & Investment Insights
NASDAQ
•
Financial Services
•
Insurance - Diversified
Current Price
$92.52
Analyst Target
$107.47
+16.2% Upside
52W High
$101.66
52W Low
$82.45
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
92%
Analysis Accuracy
Arch Capital Group (ACGL) presents a compelling investment opportunity, trading at a significant discount to its $107.47 analyst target price with strong fundamentals and consistent earnings outperformance. The company's P/E of 8.67 is markedly below the sector average of 22.78, while delivering robust YoY earnings growth of 39.1% and an impressive ROE of 17.81%. Despite near-term price weakness over the past year (-2.8%), ACGL has delivered a 175.6% return over five years, underpinned by disciplined underwriting, low leverage, and superior profitability metrics. Analysts unanimously recommend the stock as a 'buy,' supported by a long track record of double-digit earnings surprises and accelerating top-line momentum.
Key Strengths
P/E ratio of 8.67 is deeply discounted vs. sector average of 22.78 and peers like MSCI (35.84) and PRU (14.68)
Exceptional earnings growth: 39.1% YoY and 36.6% Q/Q, among the highest in the diversified insurance space
Superior profitability with operating margin of 30.69% and ROE of 17.81%, well above sector average ROE of 26.34% despite lower absolute level
Consistently beats earnings estimates: 24 of last 25 quarters beat, with average surprise of +22.9% over the last four
Strong financial health with very low debt/equity of 0.12, significantly below sector average of 0.78
Key Risks
Current ratio of 0.56 and quick ratio of 0.28 indicate tight liquidity, common in insurance but still a structural constraint
Insider selling activity: $0.94M in sales by a company president with no offsetting buys in last 6 months
Lack of dividend may deter income-oriented investors and reduce shareholder alignment
Forward P/E expansion from 8.67 to 10.23 suggests near-term earnings growth expectations are already priced in
Underperformance vs. 52-week high ($101.66) with current price 9% below peak, indicating sentiment headwinds
AI Fair Value Estimate
Based on comprehensive analysis
$107.47
+16.2% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare ACGL against industry averages and similar companies
Insider Trading & Analyst Ratings
Track insider transactions and Wall Street analyst recommendations