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Kingsway Financial Services (KFS)
NYSE:KFS
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Kingsway Financial Services
(NYSE:KFS)
42Neutral
Kingsway Financial Services (KFS) vs. S&P 500 (SPY)
Market Cap
$215.07M
Dividend YieldN/A
Average Volume (3M)23.90K
Price to Earnings (P/E)―
Beta (1Y)0.42
Revenue Growth6.55%
EPS Growth-120.38%
CountryUS
Employees397
SectorConsumer Cyclical
Sector Strength50
IndustryVehicles
Share Statistics
EPS (TTM)-0.25
Shares Outstanding27,572,790
10 Day Avg. Volume22,893
30 Day Avg. Volume23,900
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.98
Price to Cash Flow (P/CF)146.10
P/FCF Ratio28.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Kingsway Financial Services Business Overview & Revenue Model
Company DescriptionKingsway Financial Services, Inc. is a holding company, which engages in the provision of financial services. It operates through the following segments: Insurance Underwriting, Extended Warranty, and Leased Real Estate. The Insurance Underwriting segment offers personal automobile insurance to drivers. The Extended Warranty segment provides after-market vehicle protection services distributed by credit unions. The Leased Real Estate segment leases a real property to a third party pursuant to a long-term triple net lease. The company was founded on September 19, 1989 and is headquartered in Toronto, Canada.
How the Company Makes MoneyKingsway Financial Services generates revenue through a diversified model primarily involving its insurance and finance-related products. One of the key revenue streams for KFS is its extended warranty and insurance services, where it collects premiums from customers. Additionally, the company invests in and manages a portfolio of businesses in the financial services sector, driving income through strategic acquisitions and operational efficiencies. KFS also earns through partnerships and joint ventures with other financial institutions, which help expand its market reach and enhance its service offerings. The company's ability to identify and capitalize on profitable investment opportunities further contributes to its financial performance.
Kingsway Financial Services Financial Statement Overview
Summary
Kingsway Financial Services exhibits financial instability with poor profitability, high leverage, and cash flow challenges. The company faces negative EBIT and net income, high debt-to-equity ratio, and negative cash flow from operations, necessitating strategic adjustments to enhance financial health.Income Statement
Kingsway Financial Services faces significant challenges in profitability and revenue growth. The TTM shows negative EBIT and net income, leading to negative margins. Revenue growth from 2023 to TTM is minimal at 2.85%, and the firm struggles with consistent profitability, as reflected in the negative net profit margin.40
Negative
Balance Sheet
The company's balance sheet shows high leverage, with a debt-to-equity ratio of 6.07 in TTM, indicating significant reliance on debt financing. The equity ratio is low at 5.20%, suggesting a risky capital structure. Return on equity is negative due to losses, highlighting poor returns for shareholders.35
Negative
Cash Flow
Cash flow from operations is negative, impacting liquidity. The free cash flow has deteriorated further in the TTM, showing negative growth. The operating cash flow to net income ratio is unfavorable, indicating cash flow challenges. Overall, cash flow management requires improvement.30
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 110.72M | 107.66M | 114.69M | 94.78M | 65.72M | 63.21M | Gross Profit |
| 54.30M | 76.03M | 90.61M | 87.72M | 63.02M | 58.51M | EBIT |
| -2.80M | 954.00K | 37.57M | -21.35M | -21.59M | -20.09M | EBITDA |
| 3.48M | 5.93M | 30.13M | 3.24M | 14.11M | 3.43M | Net Income Common Stockholders |
| -7.08M | 23.56M | 24.72M | 1.86M | -5.42M | -2.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 32.07M | 9.26M | 64.33M | 12.80M | 14.53M | 13.63M | Total Assets |
| 357.34M | 197.72M | 285.65M | 475.63M | 452.47M | 399.62M | Total Debt |
| 236.49M | 45.61M | 103.31M | 295.19M | 271.50M | 262.06M | Net Debt |
| 204.57M | 36.52M | 39.14M | 282.55M | 257.13M | 248.58M | Total Liabilities |
| 332.55M | 173.11M | 263.53M | 412.96M | 387.00M | 347.32M | Stockholders Equity |
| 19.16M | 27.71M | 21.68M | 773.00K | 4.51M | 7.69M |
| Cash Flow | Free Cash Flow | ||||
| -25.18M | -26.39M | 11.89M | -6.74M | 1.46M | -971.00K | Operating Cash Flow |
| -24.23M | -26.19M | -14.57M | -5.91M | 1.67M | -759.00K | Investing Cash Flow |
| -17.20M | 6.46M | 100.94M | -8.60M | 4.01M | -6.47M | Financing Cash Flow |
| 29.07M | -39.96M | -37.93M | -540.00K | 13.60M | 1.31M |
Kingsway Financial Services Technical Analysis
Neutral
7.80
Price Trends
7.95
Negative
8.41
Negative
8.27
Negative
Market Momentum
-0.11
Negative
50.73
Neutral
57.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KFS, the sentiment is Neutral. The current price of 7.8 is above the 20-day moving average (MA) of 7.73, below the 50-day MA of 7.95, and below the 200-day MA of 8.27, indicating a neutral trend. The MACD of -0.11 indicates Negative momentum. The RSI at 50.73 is Neutral, neither overbought nor oversold. The STOCH value of 57.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KFS.
Kingsway Financial Services Risk Analysis
Kingsway Financial Services disclosed 33 risk factors in its most recent earnings report. Kingsway Financial Services 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
Kingsway Financial Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $23.50B | 14.46 | 22.16% | 0.50% | 12.32% | 29.21% | |
73 Outperform | $10.52B | 11.85 | 20.33% | 2.41% | 6.91% | 4.97% | |
73 Outperform | $23.33B | 9.18 | 16.52% | ― | 5.17% | 35.36% | |
71 Outperform | $6.83B | 20.15 | 23.56% | 0.78% | 18.31% | 13.13% | |
65 Neutral | $5.09B | 26.14 | 6.82% | 1.74% | 15.35% | -44.64% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% | |
42 Neutral | $215.07M | ― | -29.78% | ― | 6.55% | -120.38% |
* Consumer Cyclical Sector Average
Performance Comparison
KFS
Kingsway Financial Services
7.81
-0.72
-8.44%
AFG
American Financial Group
123.72
-0.07
-0.06%
MKL
Markel
1,816.13
314.85
20.97%
RLI
RLI
73.97
2.30
3.21%
SIGI
Selective Insurance Group
84.03
-18.97
-18.42%
WRB
W. R. Berkley Corporation
61.55
5.93
10.66%
Kingsway Financial Services Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: 3.04% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant achievements in terms of acquisitions and growth in key segments like Extended Warranty and KSX. However, challenges remain, particularly in the venture and private equity markets affecting some segments, and a noticeable increase in net debt.Highlights
Improved Performance in Extended Warranty Segment
Extended Warranty segment showed strong cash sales and a continuing moderation of claims experience, exiting the quarter with momentum heading into the fourth quarter.
Acquisition of Image Solutions
Kingsway acquired Image Solutions for $19.5 million, marking its sixth acquisition in the accelerator portfolio. Image Solutions is a high-margin, asset-light business with impressive historical organic growth.
Revenue and EBITDA Increase
Consolidated revenue was $27.1 million, a solid increase of nearly 10% compared to the prior year quarter. Consolidated adjusted EBITDA was $2.9 million, a 28% improvement over the $2.3 million in the year ago quarter.
Positive Developments in KSX Segment
Revenues in the KSX segment increased 23% compared to the year ago quarter, primarily due to acquisitions. Positive change in the nurse staffing market with travel shifts up 73% year-over-year.
Successful Integration of Acquisitions
DDI's revenue grew 20% year-over-year and 19% year-to-date. SPI's ARR grew by 16%, with operational metrics up across the board.
Lowlights
Challenges in Venture and Private Equity Markets
Both Ravix and CSuite experienced challenges due to slow venture and private equity markets, impacting revenue and EBITDA negatively.
Claims Expense Increase in Extended Warranty Segment
Claims expense rose by 7.5% over the third quarter of last year, although this is an improvement compared to the previous year's increase of 12%.
Debt Increase
Net debt increased to $52 million as of September 30, 2024, compared to $35.3 million at the end of 2023, primarily due to acquisition financing and draws on existing loans.
Company Guidance
During the Kingsway Third Quarter 2024 Earnings Call, the company provided a detailed overview of its financial performance and strategic activities. Kingsway reported a consolidated revenue of $27.1 million, marking a nearly 10% increase from the prior year, and consolidated adjusted EBITDA of $2.9 million, a 28% improvement year-over-year. The Extended Warranty segment experienced a 3.4% revenue growth, although claims expenses rose by 7.5%. The KSX segment saw a 23% revenue increase, driven by acquisitions, although Image Solutions' results were not included for the full quarter. The acquisition of Image Solutions cost $19.5 million, with an adjusted EBITDA of $3.1 million. The company's net debt increased to $52 million, primarily due to acquisition financing. The management highlighted the favorable outlook for several business units, including the nurse staffing and cardiac monitoring services, and expressed optimism about future interest rate cuts potentially benefiting the warranty business.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.