Value
8.6/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.5 |
| P/S | 9.8 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 6.1x
- ▸PEG: 0.03
- ▸Attractively valued
EG · Why this verdict
Why Everest Group (EG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings of 5.6 times and a price-to-earnings-growth ratio of 0.02, the shares are priced at a substantial discount to what the earnings stream would normally command, offering a significant margin of safety relative to assessed intrinsic value. Valuation breakdown | Over 12 months, the forward multiple expands as earnings deliver and investor confidence in the earnings outlook improves, lifting the share price toward or above the analyst consensus target. | →Stable |
| CounterA revenue base that declined 5 percent recently and concentrated exposure to a single product line and broker set could sustain pressure on earnings, keeping the multiple compressed rather than allowing it to expand. | ||
Free cash flow is running at 196 percent of reported net income, a level that indicates the business generates substantially more cash than its income statement suggests and that stated earnings are not reliant on favorable accruals. Quality breakdown | Cash conversion remains above 100 percent of net income over the next four quarters, confirming the earnings quality is durable and not a one-period anomaly. | →Stable |
| CounterWithout a clearly identified competitive moat, the cash conversion advantage may reflect temporary working-capital dynamics rather than a structural feature, and could compress if claims experience or reinsurance market conditions shift. | ||
The reinsurance segment contributes 72.4 percent of total product revenue, and the ten largest brokers account for 60.9 percent of counterparty exposure — concentration levels that leave the business acutely sensitive to disruption in a single product category or a handful of distribution relationships. Bear case | If this concentration does not increase further and the core reinsurance segment sustains its loss ratio, the concentration risk remains manageable at the current scale. | →Stable |
| CounterEven a moderate deterioration in the reinsurance market, a loss of a key broker relationship, or a catastrophic loss event could disproportionately impair results given how narrow the revenue and counterparty base is. | ||
The earnings record over the past four quarters shows two beats and two misses, with the second most recent quarter delivering a miss of 48 percent versus consensus — a pattern that makes it difficult to rely on the earnings trajectory and keeps the average surprise negative overall. Earnings | A sustained sequence of earnings beats over the next three to four quarters, with positive surprises averaging above zero, would demonstrate that the delivery has normalized and the large miss was an isolated event. | →Stable |
| CounterThe most recent quarter was a strong beat of 15 percent, suggesting the large miss may have been an anomaly tied to specific loss activity rather than a structural earnings problem — if that reading is correct, the inconsistency risk is overstated. | ||
At a forward price-to-earnings of 5.6 times and a price-to-earnings-growth ratio of 0.02, the shares are priced at a substantial discount to what the earnings stream would normally command, offering a significant margin of safety relative to assessed intrinsic value.
→StableValuation breakdown
- Expectation
- Over 12 months, the forward multiple expands as earnings deliver and investor confidence in the earnings outlook improves, lifting the share price toward or above the analyst consensus target.
CounterA revenue base that declined 5 percent recently and concentrated exposure to a single product line and broker set could sustain pressure on earnings, keeping the multiple compressed rather than allowing it to expand.
Free cash flow is running at 196 percent of reported net income, a level that indicates the business generates substantially more cash than its income statement suggests and that stated earnings are not reliant on favorable accruals.
→StableQuality breakdown
- Expectation
- Cash conversion remains above 100 percent of net income over the next four quarters, confirming the earnings quality is durable and not a one-period anomaly.
CounterWithout a clearly identified competitive moat, the cash conversion advantage may reflect temporary working-capital dynamics rather than a structural feature, and could compress if claims experience or reinsurance market conditions shift.
The reinsurance segment contributes 72.4 percent of total product revenue, and the ten largest brokers account for 60.9 percent of counterparty exposure — concentration levels that leave the business acutely sensitive to disruption in a single product category or a handful of distribution relationships.
→StableBear case
- Expectation
- If this concentration does not increase further and the core reinsurance segment sustains its loss ratio, the concentration risk remains manageable at the current scale.
CounterEven a moderate deterioration in the reinsurance market, a loss of a key broker relationship, or a catastrophic loss event could disproportionately impair results given how narrow the revenue and counterparty base is.
The earnings record over the past four quarters shows two beats and two misses, with the second most recent quarter delivering a miss of 48 percent versus consensus — a pattern that makes it difficult to rely on the earnings trajectory and keeps the average surprise negative overall.
→StableEarnings
- Expectation
- A sustained sequence of earnings beats over the next three to four quarters, with positive surprises averaging above zero, would demonstrate that the delivery has normalized and the large miss was an isolated event.
CounterThe most recent quarter was a strong beat of 15 percent, suggesting the large miss may have been an anomaly tied to specific loss activity rather than a structural earnings problem — if that reading is correct, the inconsistency risk is overstated.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The reinsurer screens inexpensively on forward earnings and converts an unusually high share of income into cash, but severe product and counterparty concentration and an inconsistent recent earnings record — including a large miss — limit the investment case at current prices where the risk/reward is unfavorable.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 1.8 |
| Gross margin | 0.0 |
| Op margin | 8.1 |
| Net margin | 5.9 |
| Current ratio | 1.5 |
| FCF quality | 10.0 |
| Moat | 5.1 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 196% FCF/NI
- ▸No competitive moat
Growth
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -5%
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.8 |
- ▸Overbought (RSI 82)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 5.7 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $272,676 (0.002% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.3 |
| quality rank | 3.3 |
| growth rank | 3.3 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.9 |
Risk (lower is worse)
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 7.0 |
| volatility | 7.2 |
| put call | 9.6 |
| implied vol | 6.8 |
| beta | 10.0 |
| debt equity | 9.1 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 6.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 215.0%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULT|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.40
Upside
-5.9%
Downside
14.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:6.9>=5.5. Top dim: Value at 8.6; weakest: Peer rank at 2.5. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 8.6, Risk (lower is worse) at 8.2, and Momentum at 6.9; the weakest are Peer rank at 2.5, Technical at 3.4, and Catalyst at 3.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.40 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Forward Valuation Discount
Trip ifForward P/E rises above 10x from the current 5.6x as EPS estimates hold or improve, signaling the valuation discount has been fully captured.
- P2Superior Cash Conversion Quality
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive reported quarters.
- P3Severe Product Counterparty Concentration
Trip ifReinsurance segment revenue share falls below 60% of total revenue from the current 72.4%, indicating meaningful diversification.
- P4Inconsistent Earnings Delivery
Trip ifEPS beats occur in 3 of the next 4 consecutive quarters with average positive surprise exceeding 5%, demonstrating consistent delivery.