KNSL Stock Study (11-24-25)

Posted by Mark on April 29, 2025 at 07:08 | Last modified: November 24, 2025 08:34

I recently did a stock study on Kinsale Capital Group, Inc. (KNSL, $384.90).

M* writes:

     > Kinsale Capital Group Inc is an insurance holding company.
     > The company is engaged in offering property, casualty, and
     > specialty insurance products. It offers specialty insurance
     > products for allied health, healthcare, life sciences,
     > professional, and a public entity. The company operates in
     > only one reportable segment which is the Excess and Surplus
     > Lines Insurance segment, which includes commercial excess
     > and surplus lines liability and property insurance products
     > through its underwriting divisions. The company generates
     > revenues in the form of premiums and investment income.

Over the past decade, this medium-size company has grown sales and earnings at eye-popping annualized rates of 37.8% and 40.0%, respectively. Lines are up, straight, and parallel except for a YOY EPS dip in ’17. Historical data audit (BI website) is perfectly clean and Value Line (VL) gives an Earnings Predictability score of 75.

Over the past decade, PTPM leads peer and industry averages despite falling from 41.6% (’15) to 32.4% (’24) with a last-5-year mean of 27.8%. ROE leads peer and industry averages while increasing from 12.4% (’15) to 28.8% (’24) with a last-5-year mean of 25.4%. Debt-to-Capital is lower than peer and industry averages while falling from 20.7% (’15) to 11.0% (’24) with a last-5-year mean of 11.8%.

Interest Coverage is 59.5 per M* who assigns a “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL gives a B++ grade for Financial Strength.

Per Google AI, 2024 combined ratio is 76.4%. Any number below 100% indicates underwriting profit. With most specialty insurers ranging from 90-95%, Kinsale is considered “industry-leading.”

With regard to sales growth:

• YF gives YOY ACE 17.2% and 7.5% for ’25 and ’26, respectively (based on 7 analysts).
• Zacks gives YOY ACE 17.1% and 7.6% for ’25 and ’26, respectively (6 analysts).
• VL projects 12.2% annualized growth [of “P/C premiums earned”] from ’24-’29.
• CFRA gives ACE 17.2% YOY and 12.3% per year for ’25 and ’24-’26 (7).
• M* provides a 2-year ACE of 12.9% per year.

I am forecasting below the range at 7.0%/year.

With regard to EPS growth:

• MarketWatch projects 13.4% and 12.3% per year for ’24-’26 and ’24-’27 (based on 14 analysts).
• Nasdaq.com gives ACE 8.6% YOY and 10.3% per year for ’26 and ’25-’27 (9 / 9 / 4 analysts for ’25 / ’26 / ’27).
• Seeking Alpha projects 4-year annualized growth of 14.8%.
• Finviz gives 5-year annualized ACE of 11.9% (4).
• LSEG estimates LTG at 14.8%.
• YF gives ACE YOY 17.4% and 8.8% for ’25 and ’26, respectively (10).
• Zacks gives ACE YOY 17.6% and 8.6% for ’25 and ’26 along with 5-year growth of 14.8%/year (9).
• VL projects 9.2% annualized growth from ’24-’29.
• CFRA gives ACE 6.0% YOY and 7.5% per year for ’25 and ’24-’26, respectively (12).
• M* projects long-term annualized growth of 15.0%.

My 9.0% forecast is below the long-term-estimate range (mean of six: 13.4%). Initial value is ’24 EPS of $17.78/share (up 34.5% YOY) instead of 2025 Q3 EPS of $20.36/share (TTM).

My Forecast High P/E is 28.0. Since 2016, high P/E ranges from 28.2 in ’16 to 48.7 in ’22 (excluding 65.3 outlier in ’20) with a last-5-year mean of 37.8 and a last-5-year-mean average P/E of 29.7. I am below the range.

My Forecast Low P/E is 14.0. Since 2016, low P/E increases from 14.5 to 18.8 (’24) with a last-5-year mean of 21.6. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $248.90 is default given initial value from above. This is 35.3% less than the previous closing price and 31.5% less than the 52-week low.

Since 2016, Payout Ratio (PR) ranges from 3.4% (’24) to 20.7% (’17) with a last-5-year mean of 6.2%. I am forecasting below the range at 3.0%.

These inputs land KNSL in the HOLD zone with a U/D ratio of 2.8. Total Annualized Return (TAR) is 14.9%.

PAR (using Forecast Average—not High—P/E) of 8.5% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 231 studies done in the past 90 days (122 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 11.3%, 11.7%, 28.7, 20.5, and 6.2%, respectively. I am lower across the board. VL projects a future average annual P/E of 25.0 that is greater than MS (24.6) and greater than mine (21.0).

MS high / low EPS are $33.78 / $19.02 versus my $27.36 / $17.78 (per share). My high EPS is less due to a lower initial value and growth rate. VL is in the middle at $30.00.

MS LSPF of $347.30 implies a Forecast Low P/E of 18.3: less than the above-stated 20.5. MS LSPF is 10.9% less than the default $19.02/share * 20.5 = $389.91 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 39.5% greater than mine.

MOS is robust in the current study because my inputs are less than or near respective analyst/historical ranges and MS averages. MS TAR being 3.2%/year greater than mine along with a much greater MS LSPF also support the assessment.

With regard to valuation, PEG is 1.4 and 1.9 per Zacks and my projected P/E, respectively: fairly valued (0.41 per M* is quite undervalued, however). Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.64.

Per U/D, KNSL is a BUY under $378/share. BI TAR criterion is met [766.1 / ((14.77 / 100 ) +1 ) ^ 5] ~ $384.00 with a forecast high price ~$766. A rare instance where latter exceeds the former is because I chose to stick with an extremely [possibly unreasonable] low default LSPF.

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