Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 7.7 |
| EV/EBITDA | 3.1 |
| Fwd P/E | 8.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 12.5x
- ▸PEG: 0.22
PLMR · Why this verdict
Why Palomar Holdings (PLMR) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Palomar has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 10.4%, consistently delivering actual EPS above estimates ranging from $1.76 to $2.31, demonstrating exceptional management visibility and pricing discipline in specialty insurance. Earnings | The company beats earnings estimates in all 2 of the next 2 quarterly reports, extending the beat streak to 6 consecutive quarters. | →Stable |
| CounterA perfect beat streak in specialty insurance can end abruptly when catastrophic loss events (hurricanes, earthquakes) generate claims that exceed modeled expectations and management guidance. | ||
Palomar is posting 60% year-over-year revenue growth while ranking as an industry growth leader within its peer group, scoring 10/10 on both revenue and earnings growth dimensions, indicating sustained market share gains in specialty property insurance. Growth breakdown | Revenue growth remains above 30% year-over-year for the next 12 months as the specialty insurance addressable market expands. | →Stable |
| Counter60% revenue growth in property insurance often reflects hard market conditions (rising industry premiums after disasters) rather than company-specific market share gains — growth could decelerate sharply when conditions soften. | ||
Palomar converts 268% of net income to free cash flow and maintains a 20% net margin with strong ROE of approximately 7.5/10 in the quality score, suggesting that reported earnings significantly understate true cash generation power. Quality breakdown | Free cash flow conversion remains above 150% of net income for the next 4 quarters. | →Stable |
| CounterVery high free cash flow conversion in insurance companies can be misleading because underwriting float — premiums collected before claims are paid — inflates near-term cash but represents future obligations. | ||
At a forward P/E of 10.1x and PEG ratio of 0.18, Palomar is attractively valued relative to its 60% revenue growth rate, with analysts setting a target of $134.13 — implying 18.7% upside from the current price of $113.01. Valuation breakdown | The stock reaches analyst consensus target of $134 within 12 months as technical momentum improves above the 200-day moving average. | →Stable |
| CounterThe confirmed downtrend (200-day moving average declining at -2.0% per month) means the stock may continue lower before the fundamental case is recognized, and the low PEG may reflect a peak earnings multiple. | ||
Palomar has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 10.4%, consistently delivering actual EPS above estimates ranging from $1.76 to $2.31, demonstrating exceptional management visibility and pricing discipline in specialty insurance.
→StableEarnings
- Expectation
- The company beats earnings estimates in all 2 of the next 2 quarterly reports, extending the beat streak to 6 consecutive quarters.
CounterA perfect beat streak in specialty insurance can end abruptly when catastrophic loss events (hurricanes, earthquakes) generate claims that exceed modeled expectations and management guidance.
Palomar is posting 60% year-over-year revenue growth while ranking as an industry growth leader within its peer group, scoring 10/10 on both revenue and earnings growth dimensions, indicating sustained market share gains in specialty property insurance.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 30% year-over-year for the next 12 months as the specialty insurance addressable market expands.
Counter60% revenue growth in property insurance often reflects hard market conditions (rising industry premiums after disasters) rather than company-specific market share gains — growth could decelerate sharply when conditions soften.
Palomar converts 268% of net income to free cash flow and maintains a 20% net margin with strong ROE of approximately 7.5/10 in the quality score, suggesting that reported earnings significantly understate true cash generation power.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income for the next 4 quarters.
CounterVery high free cash flow conversion in insurance companies can be misleading because underwriting float — premiums collected before claims are paid — inflates near-term cash but represents future obligations.
At a forward P/E of 10.1x and PEG ratio of 0.18, Palomar is attractively valued relative to its 60% revenue growth rate, with analysts setting a target of $134.13 — implying 18.7% upside from the current price of $113.01.
→StableValuation breakdown
- Expectation
- The stock reaches analyst consensus target of $134 within 12 months as technical momentum improves above the 200-day moving average.
CounterThe confirmed downtrend (200-day moving average declining at -2.0% per month) means the stock may continue lower before the fundamental case is recognized, and the low PEG may reflect a peak earnings multiple.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Palomar Holdings is a specialty property and casualty insurer with a perfect 4-for-4 earnings beat streak, 60% revenue growth, and exceptional free cash flow conversion of 268%, trading at an attractive forward P/E of 10.1x — though it remains below its 200-day moving average in a confirmed downtrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.5 |
| ROA | 3.5 |
| Gross margin | 1.7 |
| Op margin | 8.1 |
| Net margin | 10.0 |
| Current ratio | 2.1 |
| FCF quality | 10.0 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Strong margins: 20%
- ▸Excellent cash conversion: 268% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 60% YoY
Momentum
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 4.6 |
- ▸Overbought (RSI 84)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 84 (late-cycle distribution risk)
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 6.5 |
| erm sentiment | 4.3 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $2,849,225 (0.077% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 7.2 |
| growth rank | 9.5 |
- ▸Industry growth leader
Technical
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 5.9 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 6.6 |
| volatility | 3.7 |
| put call | 10.0 |
| implied vol | 5.1 |
| beta | 10.0 |
| debt equity | 8.8 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.7 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.2>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=7.2>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.28
Upside
-4.2%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 84
EdgeNo clear edge — No clear edge identified
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: MOMENTUM:7.2>=5.5. Top dim: Growth at 10.0; weakest: Technical at 2.0. No conviction either direction.
The strongest dimensions are Growth at 10.0, Risk (lower is worse) at 7.4, and Momentum at 7.2; the weakest are Technical at 2.0, Insider at 3.9, and Peer rank at 4.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEarnings miss consensus estimates by more than 10% in any single quarter, breaking the consecutive beat streak.
- P2Revenue Growth Leadership
Trip ifRevenue growth falls below 25% year-over-year for 2 consecutive quarters.
- P3Fcf Quality Premium
Trip ifFree cash flow conversion drops below 100% of net income for 2 consecutive quarters.
- P4Attractive Valuation Entry
Trip ifStock price drops below $95, exceeding a 16% decline from $113 and suggesting analyst targets are being revised lower.