ASIC

We rate Ategrity Specialty Holdings LLC (ASIC) as a Hold with a composite score of 57.5/100 at a current price of $22.23. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (83th percentile) and quality (78th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (25th percentile) and stability (35th percentile) tempers our overall conviction. We assign a Narrow Moat rating (48/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; balance sheet deleveraging progress; sustainability of the current growth rate. 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.

Ategrity Specialty Holdings LLC 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 57.5/100 places it at rank #951 in our full 7,333-stock universe. At $988M in market capitalization, Ategrity Specialty Holdings LLC is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 31%, though momentum at the 36th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 52% (-24.5pp vs sector) narrow to operating margins of 26% (+8.6pp vs sector) and net margins of 20.3%, yielding a gross-to-net conversion rate of 39%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $22.23, Ategrity Specialty Holdings LLC appears undervalued relative to its fundamentals. Our value factor score of 83/100 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. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 48.9x (a 309% premium to the sector median of 11.9x), EV/EBITDA of 8.7x (near the sector median), P/B of 1.8x, P/S of 2.2x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to Ategrity Specialty Holdings LLC. The stock presents a balanced risk profile: significant leverage (145% debt-to-equity) and below-average price stability (35th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (145% debt-to-equity); below-average price stability (35th percentile); low beta of 0.13 — while defensive, this may indicate limited upside participation in bull markets; elevated valuation multiple (P/E 48.9x) 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 35th percentile and quality factor at the 78th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 52% provide a buffer against cost pressures. 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 Ategrity Specialty Holdings LLC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 16.0%, and the balance sheet is managed within acceptable parameters (D/E: 145%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Ategrity Specialty Holdings LLC 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, Ategrity Specialty Holdings LLC receives a Hold rating with a composite score of 57.5/100 (rank #951 of 7,333). Our quantitative framework assigns a Narrow Moat (48/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 51/100.

Our analysis supports a neutral stance on Ategrity Specialty Holdings LLC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.