Fundamentals snapshot
PLMR · NMS · Financial Services · Insurance - Property & Casualty
Current price
$138.79
52-week range
$100.81 - $147.62
Market cap
$3.68B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net debt $233.08M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
Palomar is a specialty insurance company, which means it sells protection for uncommon but serious risks like earthquakes and hurricanes that regular policies often won't cover. The company makes money by collecting regular payments from customers, hoping that the amount it pays out for damages (called claims) is less than the payments it brings in. Palomar's focus on these unique and high-risk events means its financial success is closely tied to how well it predicts the likelihood of major disasters.
Palomar was founded in 2014 with a specific idea: to sell insurance for risks that other bigger companies often avoid. [6, 9] They started by focusing on earthquake insurance, a market they believed was underserved (meaning not enough good options were available for customers). [9] Backed by a private equity firm (a company that invests in other companies), Palomar grew quickly and became a publicly traded company on the stock market in 2019. [6, 7, 19] Since then, it has expanded from its initial focus to cover a wider range of specialty insurance needs.
Palomar is a specialty insurance company that provides coverage to people and businesses for unique or high-risk situations. [1] Think of it like this: while many large insurers focus on standard car or home insurance, Palomar steps in to offer protection for things like earthquake damage, which is often excluded from typical policies. [6, 9] They use technology and data analysis (the process of examining data to find trends) to figure out the prices for their insurance policies. [2] The company sells its insurance through a network of retail agents, wholesale brokers (people who act as go-betweens for insurance companies and agents), and other partners. [2, 17]
This is the company's original and largest business, making up a significant portion of its sales. [8, 9] Palomar sells insurance policies to homeowners and businesses that specifically cover damage caused by earthquakes. [6] Since standard property insurance often doesn't include this protection, customers in earthquake-prone areas, like California, pay Palomar a premium (a regular fee) for this specific coverage. [9] The company has become one of the largest earthquake insurers in the United States by focusing on this niche market. [1]
This segment provides coverage for a variety of property-related risks that go beyond a standard building. Inland marine insurance, despite its name, covers property that is in transit or movable, as well as unique property like construction equipment. This business line also includes other specialized property coverages, such as for hurricane-prone areas or residential floods. [1, 17] Customers with these specific needs pay Palomar for policies that protect their valuable assets from particular types of damage.
This part of the business focuses on liability coverage, which is insurance that protects a person or business from the risk of being sued. Casualty insurance covers the policyholder's legal responsibility for causing injury to another person or damage to their property. Businesses pay Palomar for these policies to protect themselves from financial loss if an accident or injury occurs on their premises or as a result of their operations. This is a growing part of Palomar's effort to diversify its business. [1, 9]
In this business line, Palomar acts as a licensed insurer that issues an insurance policy but then transfers most of the risk to another company, known as a reinsurer. A reinsurer is essentially an insurance company for insurance companies. The client gets a policy from Palomar's highly-rated paper, and Palomar earns a fee for this service. This allows the company to generate revenue without taking on the full risk of the policies it writes. [1]
This segment covers two distinct areas: agriculture and contractual obligations. Palomar provides crop insurance to farmers to protect them against the loss of their crops due to natural disasters or a drop in the price of agricultural goods. [1, 5] Through a recent acquisition, the company also entered the surety business, which involves issuing surety bonds (a three-party agreement that guarantees a commitment will be fulfilled). [16] For example, a construction company might buy a surety bond from Palomar to guarantee to a client that a project will be completed as promised. [16]
The company's main strategy is to keep growing while carefully managing its risks. [1] A key priority is diversification (expanding into different areas to avoid relying too heavily on one thing), which means growing its newer business lines like casualty and surety to balance its large earthquake insurance portfolio. [9, 16] Management is also focused on using its technology and data analysis to accurately price risks and identify new, underserved markets. [1] By expanding its product offerings and geographic reach, Palomar aims to build a more balanced and profitable specialty insurance company. [1, 9]
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net debt $233.1M. Interest coverage 647.4x.
Palomar Holdings, Inc.'s profit covers its interest bill about 647.4 times over. which is stronger than every peer shown here.
Total debt $295.77M Interest coverage 647.40x This is the baseline the peer rows are being compared against.
Total debt $224.54M Interest coverage 60.58x -91% vs PLMR Carries about 10.7x less debt cushion than PLMR.
Total debt $318.70M Interest coverage 95.43x -85% vs PLMR Carries about 6.8x less debt cushion than PLMR.
Total debt $437.20M Interest coverage 28.33x -96% vs PLMR Carries about 22.9x less debt cushion than PLMR.
Total debt $67.47M Interest coverage 47.89x -93% vs PLMR Carries about 13.5x less debt cushion than PLMR.
Total debt $372.84M Interest coverage 3.14x -100% vs PLMR Carries about 206.4x less debt cushion than PLMR.
What you should know
The numbers
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Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know