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Amerisafe (AMSF)
NASDAQ:AMSF
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Amerisafe
(NASDAQ:AMSF)
72Outperform
Positive Factors
Reconstruction Efforts
Amerisafe stands to benefit from reconstruction efforts in key geographies impacted by recent hurricanes.
Voluntary Premium Growth
Voluntary premium growth remains strong, showing sustained improvement.
Negative Factors
Operating EPS
Operating EPS was below the initial estimate, driven by a higher expense ratio and slightly lower net investment income.
Amerisafe (AMSF) vs. S&P 500 (SPY)
Market Cap
$958.80M
Dividend Yield2.96%
Average Volume (3M)74.75K
Price to Earnings (P/E)17.4
Beta (1Y)0.29
Revenue Growth0.71%
EPS Growth-10.39%
CountryUS
Employees362
SectorFinancial
Sector Strength81
IndustryInsurance
Share Statistics
EPS (TTM)2.89
Shares Outstanding19,050,316
10 Day Avg. Volume93,558
30 Day Avg. Volume74,751
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.08
Price to Cash Flow (P/CF)22.00
P/FCF Ratio22.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$65.00Price Target Upside28.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Amerisafe Business Overview & Revenue Model
Company DescriptionAmerisafe, Inc. (AMSF) is a specialty provider of workers' compensation insurance focused primarily on small to mid-sized employers engaged in high-hazard industries. These industries include construction, trucking, logging, agriculture, and manufacturing, where the risk of workplace injuries is significantly higher. Headquartered in DeRidder, Louisiana, Amerisafe operates across the United States, offering tailored insurance solutions designed to meet the unique needs of businesses operating in these sectors.
How the Company Makes MoneyAmerisafe generates revenue primarily through underwriting workers' compensation insurance policies. The company's key revenue stream is the collection of premiums from policyholders, which are calculated based on the level of risk associated with the insured's industry and the size of their workforce. Amerisafe's profitability is influenced by its ability to accurately assess risks, set appropriate premium rates, and manage claims efficiently. The company also earns investment income from its portfolio, which consists of premiums collected and held in reserve to pay future claims. Strategic partnerships with independent insurance agencies and brokers help Amerisafe expand its market reach and maintain a steady flow of new business.
Amerisafe Financial Statement Overview
Summary
Amerisafe demonstrates strong financial stability with zero debt and a healthy equity position, but faces challenges in maintaining profitability margins and cash flow growth. The company is well-positioned in terms of financial health but could benefit from strategies to boost revenue growth and cash flow efficiency.Income Statement
Amerisafe's income statement shows a stable revenue base with a gross profit margin of approximately 89.8% in 2024. However, the net profit margin decreased from 20.2% in 2023 to 17.9% in 2024, indicating a slight decline in profitability. The company experienced a modest revenue growth rate of 0.7% from 2023 to 2024, which suggests stability but limited growth potential. EBIT and EBITDA margins are unavailable for 2024, affecting the assessment of operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with zero total debt in 2024, resulting in a debt-to-equity ratio of 0, which is excellent for financial stability. The return on equity (ROE) decreased to 21.5% in 2024 from 21.2% in 2023, but remains robust. The equity ratio is 22.2% in 2024, showing a consistent reliance on equity financing. The absence of debt enhances financial flexibility.80
Positive
Cash Flow
Cash flow analysis indicates a decrease in free cash flow from $29.3M in 2023 to $23.3M in 2024, resulting in a negative free cash flow growth rate of -20.2%. The operating cash flow to net income ratio is 0.44 in 2024, highlighting a need for improved cash generation relative to profits. The free cash flow to net income ratio stands at 0.42, suggesting that cash management strategies could be optimized.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 294.90M | 309.04M | 306.91M | 294.69M | 316.01M | 339.50M | Gross Profit |
| 257.80M | 277.54M | 306.91M | 244.14M | 265.25M | 290.75M | EBIT |
| 55.20M | -31.57M | 279.35M | 67.65M | 79.45M | 106.92M | EBITDA |
| 2.19M | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 46.14M | 55.44M | 62.11M | 55.60M | 65.76M | 86.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 130.55M | 351.80M | 355.75M | 61.47M | 70.72M | 61.76M | Total Assets |
| 1.16B | 1.16B | 1.23B | 1.27B | 1.40B | 1.47B | Total Debt |
| 0.00 | 0.00 | 267.00K | 336.00K | 395.00K | 499.00K | Net Debt |
| -44.05M | -44.05M | -38.68M | -61.13M | -70.33M | -61.26M | Total Liabilities |
| 900.45M | 900.45M | 936.71M | 951.85M | 37.88M | 38.88M | Stockholders Equity |
| 257.34M | 257.34M | 292.45M | 317.43M | 399.32M | 438.82M |
| Cash Flow | Free Cash Flow | ||||
| 35.23M | 23.35M | 29.29M | 26.11M | 36.68M | 62.48M | Operating Cash Flow |
| 36.97M | 24.19M | 29.84M | 28.19M | 37.98M | 63.40M | Investing Cash Flow |
| 97.18M | 72.37M | 43.88M | 75.43M | 70.96M | 43.37M | Financing Cash Flow |
| -106.38M | -91.20M | -96.51M | -112.87M | -99.97M | -88.83M |
Amerisafe Technical Analysis
Negative
50.77
Price Trends
50.10
Negative
51.40
Negative
47.38
Positive
Market Momentum
0.03
Negative
48.66
Neutral
18.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMSF, the sentiment is Negative. The current price of 50.77 is above the 20-day moving average (MA) of 49.99, above the 50-day MA of 50.10, and above the 200-day MA of 47.38, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 48.66 is Neutral, neither overbought nor oversold. The STOCH value of 18.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMSF.
Amerisafe Risk Analysis
Amerisafe disclosed 30 risk factors in its most recent earnings report. Amerisafe reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Amerisafe Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.93B | 14.10 | 16.03% | 2.09% | 4.07% | 1110.92% | |
82 Outperform | $21.93B | 9.65 | 17.61% | 2.31% | 13.22% | 24.83% | |
77 Outperform | $23.50B | 14.23 | 22.16% | 0.51% | 12.32% | 29.21% | |
73 Outperform | $10.39B | 11.70 | 20.33% | 2.44% | 6.91% | 4.97% | |
72 Outperform | $958.80M | 17.39 | 20.17% | 2.96% | 0.71% | -10.39% | |
65 Neutral | $5.09B | 25.92 | 6.82% | 1.74% | 15.35% | -44.64% | |
63 Neutral | $13.85B | 10.47 | 9.22% | 4.23% | 17.31% | -7.79% |
* Financial Sector Average
Performance Comparison
AMSF
Amerisafe
50.77
4.27
9.18%
AFG
American Financial Group
125.00
-0.78
-0.62%
CINF
Cincinnati Financial
141.99
25.11
21.48%
SIGI
Selective Insurance Group
85.45
-15.73
-15.55%
THG
Hanover Insurance
166.39
39.70
31.34%
WRB
W. R. Berkley Corporation
61.87
6.23
11.20%
Amerisafe Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 0.65% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The call highlighted strong premium growth, policy retention, and profitability metrics such as a low combined ratio and high ROE. However, there were significant declines in net income, net investment income, and book value, alongside increased expenses and realized losses in the investment portfolio. The overall sentiment is balanced with both positive and negative elements.Highlights
Premium Growth
Gross premiums written increased by 3.9% for the fourth quarter and 3.1% for the full year. Voluntary premiums on policies written rose by 8.5% in the fourth quarter and 4.6% for the year compared to 2023.
Policy Count and Retention
In-force policy count grew 9.6% for the year, with strong premium retention and robust new business production being primary growth drivers. Policy retention for the quarter was 94.1% on a policy basis.
Combined Ratio and ROE
Achieved a combined ratio of 88.7% and a return on equity (ROE) of 20.2%, indicating strong profitability.
Dividend Increase
AMERISAFE's Board of Directors approved a 5.4% increase in the regular dividend to $0.39 per share.
Favorable Reserve Development
Recognized favorable development from prior accident years totaling $9.7 million in the quarter and $34.9 million for the full year.
Lowlights
Decline in Net Income
Net income for the fourth quarter of 2024 was $13.2 million, down from $19.2 million in the same quarter of 2023. For the full year, net income was $55.4 million, down from $62.1 million in 2023.
Decrease in Net Investment Income
Net investment income decreased by 14.4% to $6.9 million for the fourth quarter and by 6.8% to $29.2 million for the full year, due to a decrease in investable assets following the payment of a special dividend.
Realized Losses on Investment Portfolio
Realized losses for the portfolio and securities sold were $400,000 in the quarter compared with a gain of $1 million during the fourth quarter of 2023.
Expense Ratio Increase
Total underwriting and other expenses were $19.8 million in the quarter, a 4% increase compared to the fourth quarter of 2023, leading to an expense ratio of 29.7% compared with 28.9% in 2023.
Book Value Decline
Book value per share was $13.51 after paying the special dividend in December 2024, a decrease of 11.6% from year-end 2023.
Company Guidance
During the AMERISAFE fourth quarter 2024 earnings call, the company reported a 3.9% increase in gross premiums written for the quarter and 3.1% for the full year, with voluntary premiums on policies written rising by 8.5% in the fourth quarter and 4.6% for the year. The enforced policy count grew 9.6%, driven by strong premium retention and new business production. Despite industry-wide headwinds, AMERISAFE achieved a combined ratio of 88.7% and a return on equity (ROE) of 20.2%. The accident year loss ratio held steady at 71%, consistent with the previous year, and the company recognized favorable development from prior accident years amounting to $9.7 million in the quarter and $34.9 million for the full year. On the capital management front, AMERISAFE's Board approved a 5.4% increase in the regular dividend to $0.39 per share. Looking forward, the company remains focused on top-line growth and is confident in its ability to identify and ensure profitable high-risk opportunities despite broader market challenges.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.