Palomar Holdings, Inc. (PLMR)

Price$136.58Cached quoteAs of 2026-09-05 02:05 UTC

AI: Undervalued

Price checkThe shares look inexpensive if current profit guidance proves close to sustainable earnings.

At the observed quote, Palomar is worth about $3.6 billion. Against management’s 2026 adjusted net income guide of $270 million to $280 million, that equals roughly 13 times guided profit; against about $203 million of trailing reported net income, roughly 18 times. An earnings multiple simply compares market value with annual profit. Those levels look modest beside adjusted return on equity above 26%. The counterweight is the asset valuation: about 3.6 times reported equity and 4.8 times tangible equity. I therefore view the shares as undervalued, provided adjusted earnings remain durable.

Big pictureProfit and premiums have grown quickly, while cash generation has remained strong but uneven.

Revenue rose from $554 million in 2024 to $876 million in 2025, while net income climbed from $118 million to $197 million. Operating cash flow also increased from $261 million to $409 million, with very little capital spending. Through the first half of 2026, revenue reached $593 million and operating cash flow about $214 million. Insurance cash flow is naturally lumpy because premiums arrive before claims and investments move cash between statement categories, so underwriting profitability and return on equity are better durability checks than a simple free-cash-flow figure.

Business strengthUnderwriting remains highly profitable, though the balance sheet now carries meaningful acquisition debt.

Second-quarter gross written premiums increased 27% to $630.5 million, and the adjusted combined ratio was 76.7%. A combined ratio below 100% means premiums exceeded claims and underwriting expenses, so that result shows a strong underwriting margin even though the ratio worsened from 73.1% a year earlier. Equity was $980.9 million, while a new term loan stood at $295.8 million after the Gray Surety acquisition. That leverage is manageable relative to equity, but tangible equity fell to $744.2 million, leaving less balance-sheet cushion than before the deal.

What could change the storyCatastrophe losses or weak deal returns could erase the apparent discount quickly.

Palomar’s best case is that premium growth, Gray Surety integration, and buybacks sustain earnings growth above what a roughly 13-times guided-profit valuation implies. Shares outstanding fell from about 26.52 million at year-end 2025 to 26.19 million at June 2026, despite stock compensation, and the board also began a quarterly dividend. The bear case is company-specific: catastrophe losses exceed the $8 million to $12 million assumed in guidance, reinsurance costs rise, or the debt-funded surety deal earns weak returns. Any of those would make today’s apparent discount much less convincing.

AI: News

Q2 earnings and guidanceSecond-quarter profit beat expectations, and management raised the full-year outlook again.

On August 4, Palomar reported second-quarter adjusted net income of $63.8 million, up 31.4%, with adjusted earnings per share of $2.36 and gross written premiums up 27% to $630.5 million. The adjusted combined ratio worsened to 76.7% from 73.1%, but still indicated strong underwriting profit. Management lifted 2026 adjusted net income guidance to $270 million to $280 million and declared an initial $0.45 quarterly dividend. The next trading day the shares fell 1.55%, so price timing does not show a clearly positive immediate reaction.

Reinsurance capacity expandedMore catastrophe protection supports earthquake growth while keeping each major-event loss within stated limits.

On May 29, Palomar said its June 1 reinsurance placement added about $421 million of limit, taking earthquake protection to $3.92 billion and continental United States hurricane protection to $135 million. Per-event retention stayed at $20 million for earthquakes and $11 million for hurricanes. Management also raised its 2026 adjusted net income outlook to $266 million to $280 million. The event matters because reinsurance transfers part of extreme-loss risk to other insurers, supporting growth while limiting Palomar’s direct exposure when disasters occur.

Gray Surety acquisition closedThe Gray Surety deal broadened the business but replaced a net-cash position with debt.

Palomar completed the Gray Surety acquisition on January 31 for about $311 million in cash and financed it largely with a new $300 million term loan inside a $450 million unsecured credit package. By June 30, term debt was $295.8 million, versus only about $7 million of debt at year-end 2025. The transaction adds scale in contract surety and could diversify catastrophe-heavy property earnings, but it also raises interest costs and integration risk. That makes acquisition returns an important driver of whether the current valuation remains attractive.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017
Revenue	$876.0M	$553.9M	$375.9M	$327.1M	$247.8M	$168.5M	$113.3M	$73.0M	$59.5M
Net income	$197.1M	$117.6M	$79.2M	$52.2M	$45.8M	$6.3M	$10.6M	$18.2M	$3.8M
Net profit margin	22.50%	21.23%	21.07%	15.95%	18.50%	3.71%	9.37%	24.97%	6.36%
Basic EPSper basic share	$7.40	$4.61	$3.19	$2.07	$1.80	$0.25	$0.49	$1.07	$0.22
Diluted EPSper diluted share	$7.17	$4.48	$3.13	$2.02	$1.76	$0.24	$0.49	$1.07	$0.22

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

16.81%of listed shares

BlackRock, Inc.4.4M shares · Jun 30, 2026

View holders

Top 20 reported holders of PLMR
Holder	% owned
BlackRock, Inc.	16.81%4.4M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.71%1.23M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.55%1.19M shares
STATE STREET CORP	4.29%1.12M shares
Jupiter Topco LLC	3.99%1.05M shares
AMERICAN CENTURY COMPANIES INC	2.93%767.32K shares
Stephens Investment Management Group LLC	2.80%732.3K shares
GEODE CAPITAL MANAGEMENT, LLC	2.73%715.9K shares
Sumitomo Mitsui Trust Group, Inc.	2.72%713.13K shares
Hood River Capital Management LLC	2.61%682.28K shares
WESTFIELD CAPITAL MANAGEMENT CO LP	2.55%668.85K shares
DIMENSIONAL FUND ADVISORS LP	2.53%662.89K shares
Freestone Grove Partners LP	2.38%622.34K shares
CITADEL ADVISORS LLC	1.49%391.3K shares
T. Rowe Price Investment Management, Inc.	1.31%343.97K shares
Artemis Investment Management LLP	1.28%333.97K shares
VOYA INVESTMENT MANAGEMENT LLC	1.24%325.72K shares
Point72 Asset Management, L.P.	1.19%311.37K shares
NORTHERN TRUST CORP	1.17%306.78K shares
FEDERATED HERMES, INC.	1.16%302.62K shares

Percentages use 26.19M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys4$222.4K disclosed value

Sells (SEC code S)212$38.39M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 28, 2026Form 4	Carter TimothyChief People Officer	SellCommon Stock	300	$124.29	$37.3K	2.2K
Jun 28, 2026Form 4	Carter TimothyChief People Officer	SellCommon Stock	180	$124.29	$22.4K	1.7K
Jun 22, 2026Form 4 · 10b5-1	Armstrong MacCEO and Chairman	SellCommon Stock (RSUs) · indirect	1.5K	$113.28	$169.4K	329.4K
Jun 22, 2026Form 4 · 10b5-1	Armstrong MacCEO and Chairman	SellCommon Stock (RSUs) · indirect	2.0K	$112.72	$226.0K	330.9K
May 21, 2026Form 4 · 10b5-1	Armstrong MacCEO and Chairman	SellCommon Stock (RSUs) · indirect	2.2K	$114.67	$249.1K	332.9K

Review ownership filings at SEC.gov ↗

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Palomar Holdings, Inc. (PLMR)

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