Arch Capital Stock in Brief

Arch Capital logged a -2.3% change during today's evening session, and is now trading at a price of $79.97 per share.

Arch Capital returned gains of 33.0% last year, with its stock price reaching a high of $90.65 and a low of $59.35. Over the same period, the stock outperformed the S&P 500 index by 16.0%. More recently, the company's 50-day average price was $83.64. Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. Based in Pembroke, Bermuda, the large-cap Finance company has 5,800 full time employees. Arch Capital has not offered a regular dividend during the last year.

Overview of the Company's Finances:

2018 2019 2020 2021 2022 2023
Revenue (MM) $5,451 $6,926 $8,509 $9,250 $9,615 $12,732
Revenue Growth n/a 27.07% 22.85% 8.71% 3.94% 32.42%
Interest Income (MM) $120 $121 $143 $139 $130 $130
Net Margins 14% 24% 17% 24% 15% 23%
Net Income (MM) $758 $1,693 $1,466 $2,239 $1,482 $2,971
Depreciation & Amort. (MM) $106 $82 $69 $83 $106 $97
Earnings Per Share $1.73 $3.87 $3.32 $5.23 $3.8 $7.76
EPS Growth n/a 123.7% -14.21% 57.53% -27.34% 104.21%
Diluted Shares (MM) 413 412 410 400 378 377
Free Cash Flow (MM) $1,530 $2,011 $2,847 $3,386 $3,764 $5,014
Capital Expenditures (MM) $30 $38 $40 $41 $52 $52
Current Ratio 1.92 1.86 1.72 1.48 1.36 1.44
Long Term Debt (MM) $20,504 $23,577 $29,294 $31,546 $35,069 $39,986

Arch Capital has growing revenues and increasing reinvestment in the business and exceptional EPS growth. Additionally, the company's financial statements display a pattern of improving cash flows and decent net margins with a positive growth rate. Furthermore, Arch Capital has an average amount of debt.

Arch Capital Is Undervalued at Today's Prices:

Arch Capital has a trailing twelve month P/E ratio of 10.8, compared to an average of 12.38 for the Finance sector. Based on its EPS guidance of $7.83, the company has a forward P/E ratio of 10.7. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 28.4%. On this basis, Arch Capital's PEG ratio is 0.38. Using instead the 10.7% weighted average of Arch Capital's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 1.01, which shows that its shares might be fairly priced. In contrast, Arch Capital is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.06 is higher than the sector average of 1.58. The company's shares are currently trading -5.9% below their Graham number.

Arch Capital Has an Analyst Consensus of Some Upside Potential:

The 14 analysts following Arch Capital have set target prices ranging from $79.0 to $103.0 per share, for an average of $95.71 with a buy rating. As of April 2023, the company is trading -12.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Arch Capital has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 91.4% of the company's shares, and the insider ownership rate stands at 3.17%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $3,252,281,826.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.