Company Overview
AMERISAFE, Inc. operates as an insurance holding company that underwrites workers' compensation insurance policies across the United States. The firm provides essential benefits to injured employees covering temporary or permanent disability, death, and medical and hospital expenses. Within the broader financial services sector, the company specifically functions within the insurance specialty industry, focusing on niche risk management products. The company's scale is defined by a market capitalization of $619.40M and annual revenue of $317.30M, with an employee count listed as N/A. These valuation and revenue figures indicate that the company maintains a significant position in its specialized market segment, generating substantial income from its core underwriting operations while maintaining a mid-to-large-cap profile that suggests established market presence and operational maturity.
Financial Health
The company reported revenue of $317.30M over the trailing twelve months, resulting in a net income of $47.15M and an EBITDA of $59.59M. The gap between the revenue figure and the net income reveals a cost structure where operating expenses, including claims payments and administrative costs, consume approximately 85.1% of total revenue before interest and taxes. Free cash flow stands at $37.76M, which indicates that the company generates sufficient cash from its operations to cover capital expenditures and potentially fund internal growth initiatives or debt repayment without relying on external financing. The gross margin is 29.1%, which reflects the profitability of the core underwriting business after direct costs but before operating expenses. The operating margin is 15.6%, demonstrating the efficiency of the company's management in controlling overhead and administrative costs relative to revenue. The profit margin is 14.9%, which represents the final percentage of revenue converted into net earnings after all expenses, taxes, and interest. The company holds $76.16M in cash against a debt load of $491,000, creating a highly conservative balance sheet with a debt-to-equity ratio of 0.20. This low leverage indicates minimal financial risk and a strong ability to withstand economic downturns or increased claim severity. The current ratio is 2.04, signifying that the company possesses more than double the current assets needed to cover its short-term liabilities, thus indicating robust short-term liquidity. Return on equity is 18.5%, while return on assets is 3.2%, revealing that management is effectively utilizing shareholder equity to generate returns, though the return on assets is moderate for an insurance entity.
Valuation Assessment
The trailing twelve-month P/E ratio is 13.25, whereas the forward P/E is 14.71. The difference between these two metrics implies that the market expects earnings growth to be slower than the current earnings base, or that the current earnings are higher than anticipated future earnings due to the recent earnings decline. The price-to-book ratio is 2.44, indicating that the market values the company at a premium over its tangible book value, suggesting confidence in the intangible assets and future earnings power of the insurance book. The price-to-sales ratio is 1.95, and the EV/EBITDA stands at 9.05; these alternative valuation metrics suggest that the company is priced reasonably relative to its revenue and enterprise earnings, offering a perspective distinct from earnings-based multiples. The 52-week high is $53.27 and the 52-week low is $32.00. Based on the provided data points, the specific current trading price is not explicitly stated as a single number, but the range defines the volatility envelope, with the stock capable of trading anywhere between the low of $32.00 and the high of $53.27 depending on market sentiment. The beta value is 0.37, which means the stock's price volatility is significantly lower than the broader market, making it a defensive holding that tends to remain stable during periods of market turbulence.
Growth & Income
Revenue growth year-over-year is 10.2%, while earnings growth year-over-year is -19.2%. This divergence indicates that earnings are growing much slower than revenue, specifically declining, which implies that cost pressures, increased claim payouts, or lower loss ratios are negatively impacting the bottom line despite top-line expansion. For dividend payers, the company offers a dividend yield of 4.8% with a payout ratio of 63.2%. The payout ratio is sustainable given the current earnings, as the company distributes less than two-thirds of its net income to shareholders, leaving a buffer for retention or special dividends. The decline in earnings growth necessitates a close monitoring of whether the dividend can be maintained if earnings continue to contract further, as the payout ratio could rise sharply if net income drops below $47.15M. The overall growth and income profile presents a scenario of moderate revenue expansion coupled with a significant earnings contraction, supported by a high-yield dividend that provides income to shareholders but requires vigilance regarding the sustainability of that payout given the negative earnings growth trajectory.