AHL

We rate ASPEN INSURANCE HOLDINGS LTD (AHL) as a Reduce with a composite score of 47.7/100 at a current price of $37.51. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (66th percentile) and value (61th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (30th percentile) and momentum (41th percentile) tempers our overall conviction. We assign a Narrow Moat rating (40/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

ASPEN INSURANCE HOLDINGS LTD holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 47.7/100 places it at rank #2362 in our full 7,333-stock universe. At $2.6B in market capitalization, ASPEN INSURANCE HOLDINGS LTD is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -17% combined with momentum at the 41th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of -2% (-78.4pp vs sector) narrow to operating margins of 102% (+84.9pp vs sector) and net margins of 0.4%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $37.51, ASPEN INSURANCE HOLDINGS LTD is trading near fair value based on current fundamentals. Our value factor score of 61/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 296.9x (a 2389% premium to the sector median of 11.9x), EV/EBITDA of 11.4x (at a premium), P/B of 1.0x, P/S of 1.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to ASPEN INSURANCE HOLDINGS LTD. The company exhibits strong financial stability with a beta of -0.00, conservative leverage (9% D/E), and a stability factor in the 66th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: weak quality scores (30th percentile); low beta of -0.00 — while defensive, this may indicate limited upside participation in bull markets; elevated valuation multiple (P/E 296.9x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 66th percentile and quality factor at the 30th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (9% D/E) limits balance sheet risk; above-average stability (66th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate ASPEN INSURANCE HOLDINGS LTD's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 0.3%, and the balance sheet is managed within acceptable parameters (D/E: 9%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; ASPEN INSURANCE HOLDINGS LTD falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, ASPEN INSURANCE HOLDINGS LTD receives a Reduce rating with a composite score of 47.7/100 (rank #2362 of 7,333). Our quantitative framework assigns a Narrow Moat (40/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis does not support a constructive view on ASPEN INSURANCE HOLDINGS LTD at this time. The combination of the current quantitative profile, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.