Neptune Insurance Holdings Inc. (NP)

Price$27.24Cached quoteAs of 2026-10-02 10:26 UTC

AI: Overvalued

Price checkStrong growth is real, but the market price assumes years of near-flawless execution.

At the observed quote, Neptune’s equity value is about $4.6 billion. Against the latest twelve months through June, that is roughly 117 times reported net income of $39.0 million, about 68 times estimated adjusted net income near $67 million, and about 44 times adjusted EBITDA after adding net debt. Those are demanding multiples even with revenue up 33% and adjusted EBITDA up 32%. The valuation therefore requires several more years of roughly 25%-30% growth, near-60% adjusted margins, and limited dilution or refinancing damage.

Big pictureRevenue and cash generation are scaling fast, while reported earnings lag the operating momentum.

The supplied history shows revenue rising from $84.9 million in 2023 to $159.6 million in 2025. Operating cash flow rose from $18.6 million to $51.7 million, while capital spending stayed near $4 million, lifting free cash flow—cash left after running and investing in the business—from about $14.6 million to $47.8 million. First-half 2026 free cash flow was already about $41.2 million. Reported net income, however, grew only 7% year over year in the first half as stock compensation and taxes increased.

Business strengthNeptune’s fee model scales efficiently, but leverage and stock compensation reduce the margin of safety.

Neptune is a managing general agent, so carriers rather than Neptune bear policy claims. That supports high margins and lighter operating capital needs: the company reported 45 capacity providers, 86% policy retention, and 92% premium retention. The balance sheet still limits downside protection. June cash was $17.6 million against a $240 million secured revolver, and stockholders’ equity was negative $222 million. First-half stock compensation jumped to $13.9 million, while diluted weighted shares were about 146 million versus 138 million basic shares. Repurchases retired 1.2 million shares for $31.9 million.

What could change the storyFaster profitable growth could justify the premium; weaker capacity economics would expose the valuation quickly.

The bull case is unusually strong operating leverage: second-quarter written premium rose 31%, adjusted EBITDA margin reached 62%, and the carrier panel remains broad. The bear case is that Neptune depends on those carriers continuing to supply flood capacity on attractive commission terms. Hurricane seasons can boost customer demand, but heavy industry losses can also make reinsurance scarcer and pressure carrier appetite. For today’s valuation to work, growth likely must stay near 25%-30% for years while margins remain around 60%, debt declines, and stock compensation stops outrunning shareholder returns.

AI: News

Record second quarterRecord second-quarter growth beat expectations and reinforced the market’s confidence in Neptune’s operating model.

On July 21, Neptune reported record second-quarter revenue of $55.9 million, up 33%, adjusted net income of $22.6 million, and adjusted EBITDA of $34.5 million. Written premium reached $126.9 million, up 31%. Investing.com reported a 6.3% after-hours share surge after the release. The next regular session finished slightly lower, so the immediate reaction was volatile, but the earnings beat clearly raised expectations for growth and margins.

Valuation downgradeA major broker downgraded the shares after the rally, explicitly warning that valuation had become stretched.

On July 30, BMO Capital downgraded Neptune from Outperform to Market Perform, saying the shares had risen about 100% and were trading at a peer-leading valuation. The stock closed almost 10% lower that day. The timing makes the downgrade relevant, but it does not prove the rating change caused the entire move. The event matters because it crystallized the central valuation debate: strong growth may already be heavily reflected in the market price.

Morgan Stanley upgradeMorgan Stanley later upgraded Neptune, arguing industry headwinds should not derail its superior growth profile.

On August 19, Morgan Stanley upgraded Neptune from Equal Weight to Overweight and raised its target by about 16%. The analyst argued that broader insurance-industry headwinds should not materially impair Neptune’s growth profile and that stronger growth plus profitable underwriting for carrier partners deserved a premium valuation. Shares gained roughly 3% that day. That timing is consistent with a positive reaction, although the upgrade cannot be isolated as the sole cause of the move.

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Revenue

2023

2024

2025

Net income

2023

2024

2025

Free cash flow

2023

2024

2025

Total cash / debt

CashTotal debt

2023

2024

2025

Financial statements

	2025	2024	2023
Revenue	$159.6M	$119.3M	$84.9M
Operating expenses	$88.6M	$50.9M	$39.4M
Operating income	$71.0M	$68.4M	$45.4M
Operating margin	44.47%	57.37%	53.53%
EBITDA	$75.6M	$66.9M	$47.4M
EBITDA margin	47.38%	56.10%	55.81%
Net income	$37.4M	$34.6M	$17.9M
Net profit margin	23.45%	29.00%	21.07%
Basic EPSper basic share	-$0.26	$0.16	$0.10
Diluted EPSper diluted share	-$0.26	$0.16	$0.10

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Owners

Reported shareholders

Ownership data is not available for this listing yet.

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys5$4.91M disclosed value

Sells (SEC code S)6$326.87M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 19, 2026Form 4	Bregal Sagemount Management LP +4TenPercentOwner	SellClass A Common Stock	688.4K	$26.40	$18.17M	14.25M
May 19, 2026Form 4	FTV NE-Aggregator, LLC +3TenPercentOwner	SellClass A Common Stock · indirect	787.8K	$26.40	$20.80M	16.31M
May 15, 2026Form 4	Bregal Sagemount Management LP +4TenPercentOwner	SellClass A Common Stock	4.59M	$26.40	$121.16M	14.94M
May 15, 2026Form 4	FTV NE-Aggregator, LLC +3TenPercentOwner	SellClass A Common Stock · indirect	5.25M	$26.40	$138.65M	17.10M
Mar 13, 2026Form 4	Burgess Trevor RCEO & Chairman of the Board	BuyClass A Common Stock	50.0K	$18.71	$935.5K	2.08M