Fairfax Financial Holdings (FFH) AI Stock Analysis

• Market Cap: $48.15B
• Dividend Yield: 1.1%
• Average Volume (3M): 58.90K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.58
• Revenue Growth: 13.82%
• EPS Growth: -6.68%
• Country: CA
• Employees: 47,040
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Property & Casualty
• EPS (TTM): 238.35
• Shares Outstanding: 22,792,158
• 10 Day Avg. Volume: 58,258
• 30 Day Avg. Volume: 58,896
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.86
• Price to Cash Flow (P/CF): 10.30
• P/FCF Ratio: 8.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$2,370.00
• Price Target Upside: 22.37% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Fairfax Financial Holdings shows a strong financial foundation with impressive profitability and cash flow metrics. The earnings call further confirmed robust results and growth prospects. However, technical indicators suggest caution due to current bearish trends. Valuation metrics present an opportunity, given the low P/E ratio. Despite challenges like unrealized bond losses and catastrophe impacts, the overall outlook remains positive.

Fairfax Financial Holdings Business Overview & Revenue Model

Company Description

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally. The company operates through Insurance and Reinsurance, Run-off, and Non-Insurance Companies segments. It insures against losses to property from fire, explosion, earthquake, windstorm, flood, boiler explosion, machinery breakdown, and construction defects, as well as underwrites automobile, commercial and personal property, and crop insurance. The company also offers workers' compensation, employer's liability, accident and health, medical malpractice, professional liability, and umbrella coverage insurance products; marine, aerospace, surety risk, and other risks and liabilities insurance products; and reinsurance products. In addition, it retails home improvement goods, toys and baby products, golf equipment, sports apparel and accessories, housewares and home décors, and tableware and gifts; invests in retail business; and owns and operates holiday resorts. Further, the company provides integrated travel and travel-related financial services; originates, processes, and distributes pulses and staple foods; creates, produces, and distributes entertainment content; and provision of pet medical insurance and database services, as well as media and marketing solutions. The company was formerly known as Markel Financial Holdings Limited and changed its name to Fairfax Financial Holdings Limited in 1987. Fairfax Financial Holdings Limited was incorporated in 1951 and is headquartered in Toronto, Canada.

How the Company Makes Money

Fairfax Financial Holdings generates revenue primarily through its insurance and reinsurance operations, along with investment income. The company's insurance subsidiaries underwrite property and casualty risks, collecting premiums from policyholders. These premiums constitute a significant portion of Fairfax's revenue. The reinsurance segment involves assuming risk from other insurance companies in exchange for premiums, further diversifying revenue streams. Investment income is another critical revenue source, as Fairfax invests in a diversified portfolio of equities, fixed-income securities, and alternative investments. The company's investment strategy, led by seasoned professionals, aims to achieve superior returns while managing risk. Strategic acquisitions and partnerships in the insurance and investment sectors also contribute to Fairfax's earnings, allowing for expansion and increased market presence.

Fairfax Financial Holdings Financial Statement Overview

Summary

Fairfax Financial Holdings exhibits a solid financial position with strong profitability and improving cash flows. While revenue growth has fluctuated, the company has managed to enhance its profit margins and cash flow generation. The strategic management of debt and equity also reflects positively on its financial health. However, operational performance fluctuations and reliance on liabilities warrant monitoring.

Income Statement

Fairfax Financial Holdings has demonstrated strong revenue and profit growth over recent years. The net profit margin has remained robust, supported by a significant increase in net income from the previous year. Despite a decline in total revenue from 2023 to 2024, the company maintains high gross profit margins, indicating operational efficiency. However, the absence of EBIT in 2024 suggests volatility in operational performance.

Balance Sheet

The company has maintained a stable equity position, with an improving debt-to-equity ratio reflecting better leverage management. The return on equity has been strong, supported by increasing net income. However, the equity ratio suggests moderate reliance on liabilities to finance assets, posing a potential risk in high-interest environments.

Cash Flow

Fairfax Financial Holdings has shown a significant improvement in free cash flow, reversing from negative values in previous years to a substantial positive in 2024. The operating cash flow to net income ratio indicates strong cash generation relative to earnings, enhancing liquidity and financial flexibility. This positive cash flow trajectory provides a strong buffer against potential future financial challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
28.45B	31.83B	25.82B	25.80B	19.79B
	Gross Profit
28.45B	25.80B	25.82B	25.80B	19.79B
	EBIT
0.00	31.40B	1.34B	-1.03B	-4.29B
	EBITDA
7.04B	6.09B	2.03B	-100.50M	1.47B
	Net Income Common Stockholders
3.87B	4.38B	1.15B	3.40B	37.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.28B	7.96B	11.70B	25.34B	16.30B
	Total Assets
96.78B	91.99B	92.13B	86.65B	74.05B
	Total Debt
13.06B	10.80B	9.32B	7.75B	8.81B
	Net Debt
5.83B	5.04B	-2.38B	-17.59B	-7.49B
	Total Liabilities
68.43B	64.28B	71.79B	65.33B	56.53B
	Stockholders Equity
24.07B	22.95B	16.68B	16.39B	13.86B
Cash Flow		Free Cash Flow
3.59B	-553.50M	-4.84B	6.29B	-133.50M
	Operating Cash Flow
3.99B	-39.40M	-4.42B	6.64B	139.80M
	Investing Cash Flow
-1.32B	92.00M	384.80M	1.84B	-46.80M
	Financing Cash Flow
-1.56B	-1.07B	-1.29B	-1.19B	436.90M

Fairfax Financial Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1936.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FFH, the sentiment is Negative. The current price of 1936.74 is below the 20-day moving average (MA) of 2011.16, below the 50-day MA of 2014.46, and above the 200-day MA of 1813.71, indicating a neutral trend. The MACD of 9.60 indicates Negative momentum. The RSI at 60.79 is Neutral, neither overbought nor oversold. The STOCH value of 83.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FFH.

Fairfax Financial Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IFC	78 Outperform	C$49.82B	22.57	13.38%	1.77%	5.02%	77.36%
POW	75 Outperform	C$31.09B	11.66	12.45%	4.74%	-7.62%	25.47%
FFH	73 Outperform	$48.15B	8.33	16.48%	1.10%	13.82%	-6.68%
GWO	73 Outperform	C$48.77B	12.54	15.52%	4.34%	-2.40%	42.24%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%

Fairfax Financial Holdings Corporate Events

Fairfax Financial Holdings Announces Details of Hybrid Annual Shareholders’ Meeting

Fairfax Financial Holdings Limited has announced the details of its upcoming hybrid annual shareholders’ meeting, which will be held both in-person and virtually on April 10, 2025. The meeting will include a presentation by Chairman and CEO Prem Watsa, followed by a Q&A session. Shareholders can attend and vote through a web-based platform, and are encouraged to submit questions in advance. This hybrid format aims to increase accessibility and engagement among stakeholders.

Fairfax Financial Announces Quarterly Dividends for Preferred Shares

Fairfax Financial Holdings Limited has announced the declaration of quarterly dividends for its series of preferred shares, with specific dividend amounts and payment dates provided. Additionally, the company has set the quarterly dividend rates for its floating rate preferred shares for the upcoming period. This announcement reflects Fairfax’s ongoing financial strategies and commitments to its shareholders, potentially impacting investor perceptions and market positioning.

Fairfax Financial Holdings Achieves Record Underwriting Profit Amid Decreased Net Earnings for 2024

Fairfax Financial Holdings reported a net earnings decrease to $3,874.9 million for 2024 from $4,381.8 million in 2023, despite achieving a record underwriting profit of $1.8 billion and a consolidated combined ratio of 92.7%. The company’s property and casualty operations reported strong performance with adjusted operating income of $4.8 billion. Premium growth was fueled by the acquisition of Gulf Insurance, contributing significantly to the annual figures. However, unrealized foreign currency losses impacted comprehensive income, and the company undertook significant share repurchases. Fairfax ended the year with a robust financial position, including $2.5 billion in cash and investments, underscoring its strategic focus on financial stability.

Fairfax Financial Pledges $1 Million for California Wildfire Relief

Fairfax Financial Holdings Limited has announced a donation of US$1 million to the American Red Cross to aid the relief efforts for the recent wildfires in Southern California. This contribution underscores Fairfax’s commitment to supporting communities in distress, reflecting its broader corporate responsibility ethos and potentially enhancing its stakeholder relations by demonstrating solidarity with affected residents.