Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.6 |
| P/S | 9.9 |
| EV/EBITDA | 7.3 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 7.6x
- ▸PEG: 0.46
- ▸Attractively valued
RGA · Why this verdict
Why Reinsurance Group of America, I (RGA) 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 score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company trades at a forward P/E of 7.2x with a PEG ratio of 0.44, representing significant undervaluation relative to its 24% year-over-year revenue growth and strong free cash flow conversion of 393% relative to net income. Valuation breakdown | Valuation multiple expands toward a forward P/E of 10x over 12 months as the earnings growth trajectory is recognized by the market. | →Stable |
| CounterLow valuation multiples in reinsurance often reflect elevated tail risk from catastrophic events or reserve adequacy concerns, neither of which can be fully priced with publicly available information. | ||
With 24% year-over-year revenue growth and a strong Piotroski F-Score of 7/9, the company is demonstrating operational expansion that outpaces most peers in the reinsurance sector. Growth breakdown | Revenue growth remains above 10% in at least 3 of the next 4 reporting periods. | →Stable |
| CounterReinsurance revenue growth is heavily influenced by premium cycle timing and catastrophe activity, making 24% growth potentially unsustainable if rates soften or loss ratios deteriorate. | ||
Recent earnings results are mixed: the two most recent quarters saw beats of 15.9% and 34.8%, recovering from two prior consecutive misses of -15% and -19.2%, suggesting the business may be stabilizing after a volatile period. Earnings | Earnings beats continue in at least 3 of the next 4 quarters, with no quarter missing estimates by more than 5%. | →Stable |
| CounterTwo consecutive misses in mid-2025, each worse than -15%, occurred recently enough to suggest structural forecasting difficulties rather than one-time disruptions. | ||
Free cash flow conversion of 393% relative to net income signals that accounting earnings significantly understate true cash generation, which is a favorable characteristic for a reinsurer whose reported earnings fluctuate with reserve changes. Quality breakdown | Free cash flow margin remains above 100% of net income in at least 3 of the next 4 quarters. | →Stable |
| CounterAn extremely high free cash flow to net income ratio in reinsurance can also reflect timing differences in premium collection versus claim payments, which may normalize and reduce the premium-to-earnings gap. | ||
The company trades at a forward P/E of 7.2x with a PEG ratio of 0.44, representing significant undervaluation relative to its 24% year-over-year revenue growth and strong free cash flow conversion of 393% relative to net income.
→StableValuation breakdown
- Expectation
- Valuation multiple expands toward a forward P/E of 10x over 12 months as the earnings growth trajectory is recognized by the market.
CounterLow valuation multiples in reinsurance often reflect elevated tail risk from catastrophic events or reserve adequacy concerns, neither of which can be fully priced with publicly available information.
With 24% year-over-year revenue growth and a strong Piotroski F-Score of 7/9, the company is demonstrating operational expansion that outpaces most peers in the reinsurance sector.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 10% in at least 3 of the next 4 reporting periods.
CounterReinsurance revenue growth is heavily influenced by premium cycle timing and catastrophe activity, making 24% growth potentially unsustainable if rates soften or loss ratios deteriorate.
Recent earnings results are mixed: the two most recent quarters saw beats of 15.9% and 34.8%, recovering from two prior consecutive misses of -15% and -19.2%, suggesting the business may be stabilizing after a volatile period.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters, with no quarter missing estimates by more than 5%.
CounterTwo consecutive misses in mid-2025, each worse than -15%, occurred recently enough to suggest structural forecasting difficulties rather than one-time disruptions.
Free cash flow conversion of 393% relative to net income signals that accounting earnings significantly understate true cash generation, which is a favorable characteristic for a reinsurer whose reported earnings fluctuate with reserve changes.
→StableQuality breakdown
- Expectation
- Free cash flow margin remains above 100% of net income in at least 3 of the next 4 quarters.
CounterAn extremely high free cash flow to net income ratio in reinsurance can also reflect timing differences in premium collection versus claim payments, which may normalize and reduce the premium-to-earnings gap.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Reinsurance Group of America trades at a compelling forward P/E of 7.2x with a PEG of 0.44 and strong revenue growth of 24% year-over-year, but consecutive earnings misses in two of the four most recent quarters and a recent news-driven caution signal weigh on the near-term thesis.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 3.3 |
| Net margin | 2.5 |
| Current ratio | 4.4 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 393% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.4 |
| EPS growth | 5.3 |
- ▸Strong growth: 24% YoY
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.5 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.9 |
| Price target | 7.0 |
| erm sentiment | 4.5 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,563,031 (0.011% of mkt cap)
Peer rank
3.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 0.0 |
| growth rank | 8.3 |
- ▸Industry growth leader
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.1 |
| 52w position | 9.4 |
Risk (lower is worse)
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 7.1 |
| volatility | 6.9 |
| put call | 8.6 |
| implied vol | 6.2 |
| beta | 10.0 |
| debt equity | 8.2 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 4.6 |
| dividend safety | 5.2 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 168.0%
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:7.4>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.07
Upside
-0.7%
Downside
10.9%
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:7.4>=5.5. Top dim: Value at 8.2; weakest: Peer rank at 3.1. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 8.2, Risk (lower is worse) at 8.0, and Momentum at 7.4; the weakest are Peer rank at 3.1, Technical at 3.2, and Quality at 4.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.07 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Low Peg
Trip ifForward P/E expands above 12x without a corresponding 20% increase in earnings estimates, suggesting multiple expansion without earnings support.
- P2Revenue Growth Trajectory
Trip ifRevenue growth falls below 5% in at least 2 of the next 4 reported periods.
- P3Earnings Consistency Risk
Trip ifEarnings surprise falls below -10% in at least 2 of the next 4 quarters.
- P4Free Cash Flow Quality
Trip ifFree cash flow conversion drops below 50% of net income in any reported quarter.