Value
7.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.8 |
| P/S | 9.2 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 9.5 |
| PEG | 3.7 |
- ▸Forward P/E: 8.5x
- ▸PEG: 3.06
- ▸Attractively valued
ACIC · Why this verdict
Why American Coastal Insurance (ACIC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
American Coastal Insurance has best-in-class margins and a cheap forward P/E of 8.7x, but declining revenue, falling estimates, two recent misses and an overbought chart with earnings in 5 days leave limited near-term upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Profitability is excellent, with ROE of 32% and margins of 30%, ranking best-in-class among peers on margins. Quality breakdown | ROE holds above 25% and margins above 25% through the next 12 months. | ↑Improving |
| CounterEarnings quality shows a red flag of -50% FCF to net income and a weak Piotroski F-Score of 3/9, so strong reported margins may not convert to cash. | ||
Estimates are down 45.8% over 30 days, and the last two quarters missed (-21.43% in August 2026, -11.36% in May 2026) with earnings due in 5 days. Catalyst breakdown | Estimate revisions stabilize and the October 29 report meets or beats expectations. | ↓Deteriorating |
| CounterTwo beats of +23.81% and +56.41% preceded the misses, so the misses may be noise in a catastrophe-exposed insurer with a favorable long-run record. | ||
Revenue is declining 4% YoY, and the growth score is only 0.7/10, with the June 2026 quarter at $82.6M versus $86.5M a year earlier. Growth breakdown | Revenue growth turns positive and quarterly revenue returns above $86M. | ↓Deteriorating |
| CounterInsurance revenue is lumpy with catastrophe and reinsurance timing, so a one-year decline may not reflect lost business. | ||
The shares are attractively valued at a forward P/E of 8.7x, though the PEG of 3.06 reflects weak expected growth. Valuation breakdown | Forward P/E stays below 10x while earnings stabilize. | →Stable |
| CounterA low multiple may signal the market expects earnings to fall further, consistent with estimates down 45.8%. | ||
The stock is overbought at RSI 80 with falling on-balance volume, a flat or negative average slope, and only 1.5% upside to the $11.25 resistance. Momentum breakdown | Price breaks above $11.25 resistance on rising volume. | ↓Deteriorating |
| CounterA 5-day earnings window with no analyst target leaves downside of 6.9% to the $10.32 stop against 1.5% upside. | ||
Profitability is excellent, with ROE of 32% and margins of 30%, ranking best-in-class among peers on margins.
↑ImprovingQuality breakdown
- Expectation
- ROE holds above 25% and margins above 25% through the next 12 months.
CounterEarnings quality shows a red flag of -50% FCF to net income and a weak Piotroski F-Score of 3/9, so strong reported margins may not convert to cash.
Estimates are down 45.8% over 30 days, and the last two quarters missed (-21.43% in August 2026, -11.36% in May 2026) with earnings due in 5 days.
↓DeterioratingCatalyst breakdown
- Expectation
- Estimate revisions stabilize and the October 29 report meets or beats expectations.
CounterTwo beats of +23.81% and +56.41% preceded the misses, so the misses may be noise in a catastrophe-exposed insurer with a favorable long-run record.
Revenue is declining 4% YoY, and the growth score is only 0.7/10, with the June 2026 quarter at $82.6M versus $86.5M a year earlier.
↓DeterioratingGrowth breakdown
- Expectation
- Revenue growth turns positive and quarterly revenue returns above $86M.
CounterInsurance revenue is lumpy with catastrophe and reinsurance timing, so a one-year decline may not reflect lost business.
The shares are attractively valued at a forward P/E of 8.7x, though the PEG of 3.06 reflects weak expected growth.
→StableValuation breakdown
- Expectation
- Forward P/E stays below 10x while earnings stabilize.
CounterA low multiple may signal the market expects earnings to fall further, consistent with estimates down 45.8%.
The stock is overbought at RSI 80 with falling on-balance volume, a flat or negative average slope, and only 1.5% upside to the $11.25 resistance.
↓DeterioratingMomentum breakdown
- Expectation
- Price breaks above $11.25 resistance on rising volume.
CounterA 5-day earnings window with no analyst target leaves downside of 6.9% to the $10.32 stop against 1.5% upside.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.5 |
| ROA | 4.4 |
| Gross margin | 6.9 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.4 |
| Moat | 6.5 |
| Piotroski F | 4.4 |
- ▸Excellent ROE: 26%
- ▸Strong margins: 28%
Growth
0.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 0.0 |
- ▸Declining revenue: -22%
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.3 |
| OBV | 1.0 |
| MA position | 8.0 |
| Volume | 3.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.0 |
| Analyst rating | 5.0 |
Insider
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 3.5 |
| holder change | 8.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $492,449 (0.095% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.2 |
| quality rank | 8.1 |
| growth rank | 0.0 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.1 |
| support resistance | 2.6 |
| 52w position | 7.7 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 4.4 |
| volatility | 4.3 |
| put call | 10.0 |
| implied vol | 4.4 |
| debt equity | 8.3 |
Catalyst
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 7.0 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:108d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+3.2%
Downside
15.0%
Sizing output
AVOID
SetupRange Bound — RSI 57 mid-range, Bollinger mid-band
EdgeInst Constrain — Small cap ($0.5B) below institutional reach
SuitabilitySpeculative — Binary industry: Insurance - Property & Casualty
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Value at 7.8; weakest: Growth at 0.0. No conviction either direction.
The strongest dimensions are Value at 7.8, Quality at 6.9, and Risk (lower is worse) at 6.2; the weakest are Growth at 0.0, Catalyst at 3.1, and Peer rank at 3.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Roe Strong Margins
Trip ifROE falls below 20% from the current 32%.
- P2Falling Estimates Recent Misses
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Declining Revenue
Trip ifQuarterly revenue falls below $72M from $82.6M in the June 2026 quarter.
- P4Cheap Forward Earnings Multiple
Trip ifForward P/E rises above 12x from the current 8.7x.
- P5Overbought Near Resistance
Trip ifPrice falls below the $10.32 stop level, more than 6% under the current $11.08.