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ACGL Stock Analysis: Buy (Score 58.2/100) | Blank Capital Research | Blank Capital Research
ACGL
ARCH CAPITAL GROUP LTD.
$95.97
-2.87 (-2.90%)
Score58.2
Data as of Apr 6, 2026
ACGL
ARCH CAPITAL GROUP LTD.
FinancialsInsurance
$95.97
-2.87 (-2.90%)
Open $98.43High $98.45Low $95.32Prev $98.84Vol ---52W: $82.45 – $103.39
Buy
Composite score
01234567890123456789.0123456789
Global rank
#20
Percentile
Top 1%
Business quality
72nd
percentile
Exceptional capital efficiency and structural profitability. This enterprise generates superior returns on invested capital compared to industry peers.
Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 71.9GRADE B+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
17.1%
Sector: 8.5%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
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Based on our 6-factor quantitative model, ARCH CAPITAL GROUP LTD. (ACGL) receives a "Buy" rating with a composite score of 58.2/100, ranked #20 out of 4446 stocks. Key factor scores: Quality 72/100, Value 77/100, Momentum 46/100. This is quantitative analysis only — not investment advice.
ARCH CAPITAL GROUP LTD. (ACGL) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ARCH CAPITAL GROUP LTD. Do?
Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; collateral protection, debt cancellation, and service contract reimbursement products; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; and contract and commercial surety coverages. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability and workers' compensation exposures; marine and aviation; surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was incorporated in 1995 and is based in Pembroke, Bermuda. ARCH CAPITAL GROUP LTD. (ACGL) is classified as a large-cap stock in the Financials sector, specifically within the Insurance industry. The company is led by CEO Marc Grandisson and employs approximately 5,200 people. With a market capitalization of $34.0B, ACGL is one of the prominent companies in the Financials sector.
ARCH CAPITAL GROUP LTD. (ACGL) Stock Rating — Buy (April 2026)
As of April 2026, ARCH CAPITAL GROUP LTD. receives a Buy rating with a composite score of 58.2/100 and 4 out of 5 stars from the Blank Capital Research quantitative model.ACGL ranks #20 out of 4,446 stocks in our coverage universe. Within the Financials sector, ARCH CAPITAL GROUP LTD. ranks #12 of 891 stocks, placing it in the top 10% of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ACGL Stock Price and 52-Week Range
ARCH CAPITAL GROUP LTD. (ACGL) currently trades at $95.97. The stock lost $2.87 (2.9%) in the most recent trading session. The 52-week high for ACGL is $103.39, which means the stock is currently trading -7.2% from its annual peak. The 52-week low is $82.44, putting the stock 16.4% above its annual trough. Recent trading volume was 2.2M shares, reflecting moderate market activity.
Is ACGL Overvalued or Undervalued? — Valuation Analysis
ARCH CAPITAL GROUP LTD. (ACGL) carries a value factor score of 77/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 8.32x, compared to the Financials sector average of 14.88x — a discount of 44%. The price-to-book ratio stands at 1.43x, versus the sector average of 1.22x. The price-to-sales ratio is 1.75x, compared to 0.90x for the average Financials stock. On an enterprise value basis, ACGL trades at 7.44x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, ARCH CAPITAL GROUP LTD. appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
ARCH CAPITAL GROUP LTD. Profitability — ROE, Margins, and Quality Score
ARCH CAPITAL GROUP LTD. (ACGL) earns a quality factor score of 72/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 17.1%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 5.2% versus the sector average of 1.2%.
On a margin basis, ARCH CAPITAL GROUP LTD. reports gross margins of 0.0%. The operating margin is 23.3% (sector: 21.8%). Net profit margin stands at 20.8%, versus 17.7% for the average Financials stock. Revenue growth is running at 20.8% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
ACGL Debt, Balance Sheet, and Financial Health
ARCH CAPITAL GROUP LTD. has a debt-to-equity ratio of 227.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.44x, suggesting adequate working capital coverage. Total debt on the balance sheet is $5.36B. Cash and equivalents stand at $1.06B.
ACGL has a beta of 0.43, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ARCH CAPITAL GROUP LTD. is 92/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ARCH CAPITAL GROUP LTD. Revenue and Earnings History — Quarterly Trend
In TTM 2026, ARCH CAPITAL GROUP LTD. reported revenue of $19.72B and earnings per share (EPS) of $11.83. Net income for the quarter was $4.15B. Gross margin was 0.0%. Operating income came in at $4.64B.
In FY 2025, ARCH CAPITAL GROUP LTD. reported revenue of $19.93B and earnings per share (EPS) of $11.83. Net income for the quarter was $4.40B. Revenue grew 14.3% year-over-year compared to FY 2024. Operating income came in at $4.98B.
In Q3 2025, ARCH CAPITAL GROUP LTD. reported revenue of $5.11B and earnings per share (EPS) of $3.63. Net income for the quarter was $1.35B. Revenue grew 8.2% year-over-year compared to Q3 2024. Operating income came in at $1.50B.
In Q2 2025, ARCH CAPITAL GROUP LTD. reported revenue of $5.21B and earnings per share (EPS) of $3.30. Net income for the quarter was $1.24B. Revenue grew 23.3% year-over-year compared to Q2 2024. Operating income came in at $1.41B.
Over the past 8 quarters, ARCH CAPITAL GROUP LTD. has demonstrated a growth trajectory, with revenue expanding from $4.23B to $19.72B. Investors analyzing ACGL stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ACGL Dividend Yield and Income Analysis
ARCH CAPITAL GROUP LTD. (ACGL) does not currently pay a dividend. This is common among growth-oriented companies in the Insurance industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Financials dividend stocks may want to explore other Financials stocks or use the stock screener to filter by dividend yield.
ACGL Momentum and Technical Analysis Profile
ARCH CAPITAL GROUP LTD. (ACGL) has a momentum factor score of 46/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 26/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 19/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
ACGL vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing ACGL against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ACGL vs S&P 500 (SPY) comparison to assess how ARCH CAPITAL GROUP LTD. stacks up against the broader market across all factor dimensions.
ACGL Next Earnings Date
No upcoming earnings date has been announced for ARCH CAPITAL GROUP LTD. (ACGL) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ACGL? — Investment Thesis Summary
The bull case for ARCH CAPITAL GROUP LTD. rests on several quantitative strengths. The quality score of 72/100 indicates above-average profitability and business fundamentals. The value score of 77/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 92/100) reduces downside risk.
In summary, ARCH CAPITAL GROUP LTD. (ACGL) earns a Buy rating with a composite score of 58.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ACGL stock.
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Institutional Research Dossier
ARCH CAPITAL GROUP LTD. (ACGL) Deep Dive Analysis
Published on March 24, 2026
Action RatingBuy
Sections
Executive Summary
We maintain a Buy rating on Arch Capital Group (ACGL). This rating is underpinned by the company's demonstrated ability to generate superior underwriting results, reflected in its consistently strong profitability metrics and efficient capital allocation. While the Investment score is low, the strength of the core insurance operations and attractive valuation outweigh this concern, making ACGL a compelling investment opportunity.
ACGL's diversified insurance, reinsurance, and mortgage insurance businesses provide a robust platform for growth and profitability. The company's disciplined underwriting approach, coupled with its strategic focus on specialty lines, allows it to navigate market cycles effectively and deliver strong returns for shareholders. The current valuation, which is significantly below the sector average, presents an attractive entry point for investors seeking exposure to the insurance industry.
Business Strategy & Overview
Arch Capital Group operates across three primary segments: Insurance, Reinsurance, and Mortgage. The Insurance segment focuses on specialty lines, including primary and excess casualty, professional liability, and property, energy, marine, and aviation insurance. This strategic focus allows ACGL to leverage its expertise and underwriting capabilities in niche markets, often characterized by higher margins and less competition compared to standard insurance products. The Reinsurance segment provides casualty, marine and aviation, and property reinsurance, offering protection to other insurance companies against catastrophic losses and other risks. The Mortgage segment offers direct mortgage insurance and mortgage reinsurance, catering to the housing finance market.
ACGL's business strategy centers on disciplined underwriting, which involves carefully assessing and pricing risks to ensure profitability. The company employs a sophisticated risk management framework to monitor and control exposures across its various lines of business. This approach enables ACGL to maintain a low loss ratio and generate consistent underwriting profits, even in challenging market conditions. Furthermore, ACGL actively manages its capital base, deploying excess capital to opportunistic investments and returning capital to shareholders through dividends and share repurchases.
The company's distribution strategy relies heavily on independent retail and wholesale brokers, providing access to a broad network of clients and markets. This diversified distribution channel allows ACGL to reach a wide range of customers and tailor its products to meet their specific needs. In addition, ACGL has been expanding its digital capabilities to enhance its customer experience and streamline its operations. This includes investing in technology to improve underwriting efficiency, claims processing, and data analytics.
ACGL's strategic positioning within the insurance industry is characterized by its focus on specialty lines, disciplined underwriting, and efficient capital management. The company's diversified business model and strong risk management framework provide a solid foundation for long-term growth and profitability. While the insurance industry is subject to cyclical trends and regulatory changes, ACGL's strategic approach allows it to navigate these challenges effectively and deliver superior returns for shareholders.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
20.8%
Sector: 9.4%
+122% VS SCTR
Economic Moat Analysis
Arch Capital Group possesses a narrow economic moat, primarily derived from its underwriting expertise and specialized knowledge in niche insurance markets. While not insurmountable, this moat provides a degree of competitive advantage that allows ACGL to generate above-average returns on capital over the long term. The company's focus on specialty lines, such as professional liability and energy insurance, requires a deep understanding of complex risks and the ability to accurately price these risks. This expertise is not easily replicated by competitors, creating a barrier to entry.
The underwriting process in the insurance industry is inherently complex, requiring sophisticated risk assessment and pricing models. ACGL has developed a strong track record of underwriting profitability, demonstrating its ability to effectively manage risk and generate consistent returns. This track record enhances the company's reputation and attracts both clients and brokers, further strengthening its competitive position. However, the insurance industry is highly competitive, and new entrants can emerge with innovative products and pricing strategies. Therefore, ACGL must continuously invest in its underwriting capabilities and adapt to changing market conditions to maintain its competitive advantage.
While ACGL does not possess significant network effects or switching costs, its established relationships with brokers and clients provide a degree of customer loyalty. These relationships are built on trust and a history of providing reliable insurance coverage and claims service. However, customers can easily switch to competing insurers if they offer lower prices or better coverage terms. Therefore, ACGL must continuously strive to provide superior value to its customers to retain their business.
The company's efficient scale in certain niche markets also contributes to its narrow moat. By focusing on specific segments of the insurance industry, ACGL can achieve economies of scale and offer competitive pricing. However, these economies of scale are not substantial enough to create a wide moat, as competitors can also achieve similar efficiencies by focusing on different niche markets. Overall, ACGL's narrow economic moat is based on a combination of underwriting expertise, specialized knowledge, and efficient scale in niche markets. While this moat provides a degree of competitive advantage, it is not impenetrable, and the company must continuously innovate and adapt to maintain its position in the industry.
Financial Health & Profitability
Arch Capital Group exhibits a strong financial health profile, characterized by consistent revenue growth, healthy margins, and a solid balance sheet. The company's revenue has grown significantly over the past few years, driven by strong underwriting performance and expansion into new markets. The TTM revenue of $19.93 billion represents a substantial increase compared to $17.44 billion in FY2024 and $13.63 billion in FY2023, demonstrating the company's ability to generate organic growth. This growth is further evidenced by the impressive 20.8% revenue growth compared to the sector average of 9.3%.
ACGL's profitability metrics are also impressive, with a TTM net income of $4.40 billion and an operating margin of 23.3%. These figures are significantly higher than the sector averages, indicating the company's superior underwriting capabilities and efficient cost management. The company's ROE of 17.1% is also well above the sector average of 8.5%, reflecting its ability to generate strong returns on equity. The quarterly financial history reveals a consistent trend of strong operating margins, with Q3 FY2025 reaching 29.4%.
The company's balance sheet is relatively strong, with total cash of $1.06 billion and total debt of $5.36 billion. While the debt-to-equity ratio of 227.00 is higher than the sector average of 115.00, it is manageable given the company's strong cash flow generation and profitability. The current ratio of 1.44 indicates that the company has sufficient liquid assets to cover its short-term liabilities. However, the negative free cash flow of $-27.79 billion is a concern, although this figure may be distorted by the timing of premium collections and claims payments, which can fluctuate significantly from quarter to quarter.
Overall, Arch Capital Group's financial health is robust, supported by strong revenue growth, healthy margins, and a solid balance sheet. While the high debt-to-equity ratio and negative free cash flow warrant monitoring, the company's superior profitability and efficient capital management provide a solid foundation for long-term financial stability. The company's ability to consistently generate strong underwriting profits and manage its capital base effectively positions it well for future growth and profitability.
Valuation Assessment
Arch Capital Group's valuation appears attractive relative to its peers and historical performance. The company's P/E ratio of 7.8x is significantly below the sector average of 15.5x, suggesting that the stock is undervalued. Similarly, the EV/EBITDA ratio of 1.7x is also well below the sector average of 3.5x, further supporting the undervaluation thesis. These low multiples may reflect investor concerns about the cyclical nature of the insurance industry and the potential for increased competition. However, ACGL's strong underwriting performance and efficient capital management mitigate these risks, making the current valuation an attractive entry point.
While the company's free cash flow is negative, this is not necessarily a cause for concern in the insurance industry, as free cash flow can be significantly affected by the timing of premium collections and claims payments. A more relevant metric for valuing insurance companies is book value per share, which reflects the company's net asset value. ACGL's book value per share has been growing steadily over time, indicating that the company is generating value for shareholders. However, this data is not provided, so a more in-depth analysis of book value is not possible.
Compared to its historical valuation, ACGL's current multiples are also relatively low. The company's P/E ratio has historically traded at a premium to the sector average, reflecting its superior underwriting performance and growth prospects. The current discount to the sector average suggests that the stock is undervalued and has the potential for significant upside. However, it is important to note that the insurance industry is subject to cyclical trends, and valuations can fluctuate significantly depending on market conditions.
Overall, Arch Capital Group's valuation appears attractive based on its low P/E and EV/EBITDA ratios relative to its peers and historical performance. While the negative free cash flow warrants monitoring, the company's strong underwriting performance and efficient capital management mitigate this risk. The current valuation presents an attractive entry point for investors seeking exposure to the insurance industry.
Risk & Uncertainty
Arch Capital Group faces several risks and uncertainties that could impact its financial performance and valuation. One of the primary risks is the cyclical nature of the insurance industry, which is subject to fluctuations in premium rates, claims costs, and investment returns. A prolonged period of low premium rates or high claims costs could negatively impact ACGL's profitability and capital base. Furthermore, the insurance industry is highly competitive, and new entrants can emerge with innovative products and pricing strategies. Increased competition could put pressure on ACGL's premium rates and market share.
Another significant risk is exposure to catastrophic events, such as hurricanes, earthquakes, and wildfires. These events can result in significant claims losses, which could negatively impact ACGL's financial results. The company mitigates this risk by diversifying its geographic exposure and purchasing reinsurance coverage. However, there is always the potential for catastrophic events to exceed the company's reinsurance coverage and result in significant losses.
Regulatory changes and legal developments also pose a risk to ACGL's business. The insurance industry is subject to extensive regulation, and changes in regulations could increase compliance costs or restrict the company's ability to operate in certain markets. Legal developments, such as changes in tort laws or class action lawsuits, could also result in increased claims costs. The company monitors regulatory and legal developments closely and adapts its business practices accordingly.
Finally, ACGL's high debt-to-equity ratio of 227.00 is a potential risk factor. While the company's strong cash flow generation and profitability mitigate this risk, a significant decline in earnings could make it more difficult to service its debt obligations. The company manages its debt levels carefully and maintains a conservative capital structure.
Bulls Say / Bears Say
The Bull Case
BULL VIEWArch Capital's superior underwriting discipline consistently generates industry-leading profitability, justifying a premium valuation.
BULL VIEWThe company's strategic focus on specialty lines provides a buffer against broader market volatility and enhances long-term growth prospects.
BULL VIEWACGL's efficient capital management, including share repurchases and dividend increases, will continue to drive shareholder value.
The Bear Case
BEAR VIEWThe insurance industry's cyclicality and potential for large catastrophic losses pose a significant threat to Arch Capital's earnings.
BEAR VIEWACGL's high debt-to-equity ratio makes it vulnerable to economic downturns and rising interest rates.
BEAR VIEWIntensifying competition in the specialty insurance market could erode Arch Capital's pricing power and market share.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score ACGL and 4,400+ other equities.
ARCH CAPITAL GROUP LTD. exhibits a 49% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.2%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
23.3%
Sector: 21.8%
Net Margin
Bottom-line profitability
20.8%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Arch Capital Group Ltd. stock outperforms competitors on strong trading day
Arch Capital Group Ltd. (ACGL) stock increased by 1.31% to $96.74 on Thursday, outperforming the S&P 500 Index which rose slightly, and the Dow Jones Industrial Average which saw a minor decline. The company's shares closed 6.43% below their 52-week high of $103.39 achieved in February.
