Don't Judge RenaissanceRe on Technicals Alone - Check Its Fundamentals!

RenaissanceRe logged a 3.7% change during today's afternoon session, and is now trading at a price of $219.34 per share.

RenaissanceRe returned gains of 11.8% last year, with its stock price reaching a high of $239.42 and a low of $174.22. Over the same period, the stock underperformed the S&P 500 index by -14.4%. The company's 50-day average price was $223.72. RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. Based in Pembroke, Bermuda, the Large-Cap Finance company has 925 full time employees. RenaissanceRe has offered a 0.7% dividend yield over the last 12 months.

Exceptional EPS Growth and Generally Positive Cash Flows:

2018 2019 2020 2021 2022 2023
Revenue (M) $2,075 $4,202 $5,172 $5,278 $5,060 $9,135
Interest Income (M) $47 $58 $50 $48 $48 $73
Operating Margins 13% 23% 19% -2% -24% 34%
Net Margins 11% 18% 15% -1% -21% 28%
Net Income (M) $227 $749 $762 -$40 -$1,061 $2,561
Depreciation & Amort. (M) $0 -$59 $17 -$21 -$27 -$135
Diluted Shares (M) 40 44 50 47 43 48
Earnings Per Share $4.91 $16.29 $15.31 -$1.57 -$25.5 $52.27
EPS Growth n/a 231.77% -6.02% -110.25% -1524.2% 304.98%
Avg. Price $124.02 $164.47 $167.51 $154.17 $151.55 $219.18
P/E Ratio 25.26 10.08 10.92 -98.2 -5.94 4.18
Free Cash Flow (M) $1,222 $2,137 $1,993 $1,235 $1,604 $1,912
EV / EBITDA 18.45 6.77 6.71 -76.55 -5.57 2.98
Total Debt (M) $991 $1,384 $1,136 $1,168 $1,170 $1,959
Net Debt / EBITDA -0.44 0.0 -0.59 7.42 0.02 0.03

RenaissanceRe has strong operating margins with a positive growth rate and exceptional EPS growth. Additionally, the company's financial statements display low leverage levels and generally positive cash flows.

RenaissanceRe Is Potentially Undervalued and Trades Below Its Graham Number:

RenaissanceRe has a trailing twelve month P/E ratio of 4.8, compared to an average of 15.89 for the Finance sector. Based on its EPS guidance of $35.19, the company has a forward P/E ratio of 6.4. According to the 32.5% compound average growth rate of RenaissanceRe's historical and projected earnings per share, the company's PEG ratio is 0.15. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 17.4%. On this basis, the company's PEG ratio is 0.28. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing RenaissanceRe in terms of its equity because its P/B ratio is 1.28 whereas the sector average is 1.76. The company's shares are currently trading -54.6% above their Graham number.

RenaissanceRe Has an Average Rating of Buy:

The 10 analysts following RenaissanceRe have set target prices ranging from $218.0 to $334.0 per share, for an average of $269.0 with a buy rating. The company is trading -18.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.

RenaissanceRe has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 99.0% of the company's shares, and the insider ownership rate stands at 1.88%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $1,205,863,947.

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.