ARCH CAPITAL GROUP LTD (ACGL)
BMG0450A1053 - Common Stock
We assign a fundamental rating of 6 out of 10 to ACGL. ACGL was compared to 139 industry peers in the Insurance industry. ACGL scores excellent on profitability, but there are some minor concerns on its financial health. ACGL has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ACGL was profitable.
In the past year ACGL had a positive cash flow from operations.
In the past 5 years ACGL has always been profitable.
Each year in the past 5 years ACGL had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ACGL (7.70%) is better than 94.16% of its industry peers.
ACGL's Return On Equity of 25.46% is amongst the best of the industry. ACGL outperforms 90.51% of its industry peers.
ACGL has a better Return On Invested Capital (4.61%) than 81.02% of its industry peers.
ACGL had an Average Return On Invested Capital over the past 3 years of 3.48%. This is in line with the industry average of 4.12%.
The 3 year average ROIC (3.48%) for ACGL is below the current ROIC(4.61%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.7% | ||
| ROE | 25.46% | ||
| ROIC | 4.61% |
ROA(3y)5.04%
ROA(5y)4.49%
ROE(3y)16.86%
ROE(5y)14.97%
ROIC(3y)3.48%
ROIC(5y)3.47%
1.3 Margins
Looking at the Profit Margin, with a value of 35.09%, ACGL belongs to the top of the industry, outperforming 95.62% of the companies in the same industry.
In the last couple of years the Profit Margin of ACGL has grown nicely.
With an excellent Operating Margin value of 26.27%, ACGL belongs to the best of the industry, outperforming 85.40% of the companies in the same industry.
ACGL's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.27% | ||
| PM (TTM) | 35.09% | ||
| GM | N/A |
OM growth 3Y6.85%
OM growth 5Y8.62%
PM growth 3Y26.86%
PM growth 5Y20.34%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ACGL is destroying value.
Compared to 1 year ago, ACGL has more shares outstanding
The number of shares outstanding for ACGL has been reduced compared to 5 years ago.
ACGL has a better debt/assets ratio than last year.
2.2 Solvency
ACGL has a debt to FCF ratio of 0.41. This is a very positive value and a sign of high solvency as it would only need 0.41 years to pay back of all of its debts.
ACGL's Debt to FCF ratio of 0.41 is amongst the best of the industry. ACGL outperforms 87.59% of its industry peers.
A Debt/Equity ratio of 0.12 indicates that ACGL is not too dependend on debt financing.
The Debt to Equity ratio of ACGL (0.12) is better than 78.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.41 | ||
| Altman-Z | N/A |
ROIC/WACC0.53
WACC8.7%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
ACGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.28%, which is quite good.
The Earnings Per Share has been growing by 30.84% on average over the past years. This is a very strong growth
ACGL shows a strong growth in Revenue. In the last year, the Revenue has grown by 30.27%.
The Revenue has been growing by 19.58% on average over the past years. This is quite good.
EPS 1Y (TTM)17.28%
EPS 3Y84.29%
EPS 5Y30.84%
EPS Q2Q%-13.85%
Revenue 1Y (TTM)30.27%
Revenue growth 3Y16.5%
Revenue growth 5Y19.58%
Sales Q2Q%30.46%
3.2 Future
Based on estimates for the next years, ACGL will show a small growth in Earnings Per Share. The EPS will grow by 4.87% on average per year.
The Revenue is expected to grow by 12.62% on average over the next years. This is quite good.
EPS Next Y8.59%
EPS Next 2Y4.53%
EPS Next 3Y4.87%
EPS Next 5YN/A
Revenue Next Year21.01%
Revenue Next 2Y16.93%
Revenue Next 3Y12.62%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.51 indicates a reasonable valuation of ACGL.
Compared to the rest of the industry, the Price/Earnings ratio of ACGL indicates a somewhat cheap valuation: ACGL is cheaper than 63.50% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.94. ACGL is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 10.81, the valuation of ACGL can be described as reasonable.
ACGL's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.03. ACGL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 10.81 |
4.2 Price Multiples
63.50% of the companies in the same industry are more expensive than ACGL, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ACGL is valued a bit cheaper than the industry average as 67.15% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.59 | ||
| EV/EBITDA | 9.07 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ACGL may justify a higher PE ratio.
PEG (NY)1.22
PEG (5Y)0.34
EPS Next 2Y4.53%
EPS Next 3Y4.87%
5. Dividend
5.1 Amount
No dividends for ACGL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ARCH CAPITAL GROUP LTD
NASDAQ:ACGL (11/7/2024, 8:20:55 PM)
After market: 99.8 0 (0%)99.8
-1.9 (-1.87%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap37.54B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 10.81 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.22
PEG (5Y)0.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.7% | ||
| ROE | 25.46% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 26.27% | ||
| PM (TTM) | 35.09% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)17.28%
EPS 3Y84.29%
EPS 5Y
EPS Q2Q%
EPS Next Y8.59%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)30.27%
Revenue growth 3Y16.5%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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FCF growth 3Y
FCF growth 5Y
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