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PLMR Stock Analysis: Top Mid-Cap Hold (Score 52.7/100) | Blank Capital Research | Blank Capital Research
PLMR
Palomar Holdings, Inc.
$133.72
+0.00 (+0.00%)
Score52.7
Data as of Apr 6, 2026
PLMR
Palomar Holdings, Inc.
FinancialsInsurance
$133.72
+0.00 (+0.00%)
Open ---High ---Low ---Prev $133.72Vol ---52W: $107.75 – $175.85
Hold
Composite score
01234567890123456789.0123456789
Global rank
#1,020
Percentile
Top 23%
Business quality
74th
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: 73.8GRADE 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
18.2%
Sector: 8.5%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Palomar Holdings, Inc. (PLMR) receives a "Hold" rating with a composite score of 52.7/100, ranked #1020 out of 4446 stocks. Key factor scores: Quality 74/100, Value 68/100, Momentum 37/100. This is quantitative analysis only — not investment advice.
Palomar Holdings, Inc. (PLMR) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Palomar Holdings, Inc. Do?
Palomar Holdings, Inc., an insurance holding company, provides specialty property insurance to residential and commercial customers. The company offers personal and commercial specialty property insurance products, including residential and commercial earthquake, commercial all risk, specialty homeowners, inland marine, Hawaii hurricane, and residential flood, as well as other products, such as assumed reinsurance, commercial flood, real estate error and omission, and real estate investor products. It markets and distributes its products through retail agents, wholesale brokers, program administrators, and carrier partnerships. The company was formerly known as GC Palomar Holdings. Palomar Holdings, Inc. was incorporated in 2013 and is headquartered in La Jolla, California. Palomar Holdings, Inc. (PLMR) is classified as a mid-cap stock in the Financials sector, specifically within the Insurance industry. The company is led by CEO Mac Armstrong and employs approximately 150 people. With a market capitalization of $3.1B, PLMR is one of the notable companies in the Financials sector.
Palomar Holdings, Inc. (PLMR) Stock Rating — Hold (April 2026)
As of April 2026, Palomar Holdings, Inc. receives a Hold rating with a composite score of 52.7/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.PLMR ranks #1,020 out of 4,446 stocks in our coverage universe. Within the Financials sector, Palomar Holdings, Inc. ranks #315 of 891 stocks, placing it in the upper half 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%).
PLMR Stock Price and 52-Week Range
Palomar Holdings, Inc. (PLMR) currently trades at $133.72. The 52-week high for PLMR is $175.85, which means the stock is currently trading -24.0% from its annual peak. The 52-week low is $107.75, putting the stock 24.1% above its annual trough. Recent trading volume was 0 shares, suggesting relatively thin trading activity.
Is PLMR Overvalued or Undervalued? — Valuation Analysis
Palomar Holdings, Inc. (PLMR) carries a value factor score of 68/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 19.48x, compared to the Financials sector average of 14.88x — a premium of 31%. The price-to-book ratio stands at 3.54x, versus the sector average of 1.22x. The price-to-sales ratio is 4.33x, compared to 0.90x for the average Financials stock. On an enterprise value basis, PLMR trades at 15.23x EV/EBITDA, versus 3.26x for the sector.
Overall, PLMR's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
Palomar Holdings, Inc. Profitability — ROE, Margins, and Quality Score
Palomar Holdings, Inc. (PLMR) earns a quality factor score of 74/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 18.2%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 5.6% versus the sector average of 1.2%.
On a margin basis, Palomar Holdings, Inc. reports gross margins of 0.0%. The operating margin is 28.4% (sector: 21.8%). Net profit margin stands at 22.3%, versus 17.7% for the average Financials stock. Revenue growth is running at 86.7% 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.
PLMR Debt, Balance Sheet, and Financial Health
Palomar Holdings, Inc. has a debt-to-equity ratio of 224.0%, 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 1.45x, suggesting adequate working capital coverage. Total debt on the balance sheet is $0. Cash and equivalents stand at $112M.
PLMR has a beta of 0.54, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Palomar Holdings, Inc. is 70/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Palomar Holdings, Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, Palomar Holdings, Inc. reported revenue of $771M and earnings per share (EPS) of $7.40. Net income for the quarter was $171M. Gross margin was 0.0%. Operating income came in at $219M.
In FY 2025, Palomar Holdings, Inc. reported revenue of $876M and earnings per share (EPS) of $7.40. Net income for the quarter was $197M. Revenue grew 58.2% year-over-year compared to FY 2024. Operating income came in at $253M.
In Q3 2025, Palomar Holdings, Inc. reported revenue of $245M and earnings per share (EPS) of $1.93. Net income for the quarter was $51M. Revenue grew 64.8% year-over-year compared to Q3 2024. Operating income came in at $67M.
In Q2 2025, Palomar Holdings, Inc. reported revenue of $203M and earnings per share (EPS) of $1.74. Net income for the quarter was $47M. Revenue grew 55.1% year-over-year compared to Q2 2024. Operating income came in at $60M.
Over the past 8 quarters, Palomar Holdings, Inc. has demonstrated a growth trajectory, with revenue expanding from $131M to $771M. Investors analyzing PLMR stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
PLMR Dividend Yield and Income Analysis
Palomar Holdings, Inc. (PLMR) does not currently pay a dividend. This is common among smaller 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.
PLMR Momentum and Technical Analysis Profile
Palomar Holdings, Inc. (PLMR) has a momentum factor score of 37/100, signaling weak relative price performance. Stocks with low momentum scores have historically tended to continue underperforming in the near term. The investment factor score is 21/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 20/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
PLMR vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing PLMR against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full PLMR vs S&P 500 (SPY) comparison to assess how Palomar Holdings, Inc. stacks up against the broader market across all factor dimensions.
PLMR Next Earnings Date
No upcoming earnings date has been announced for Palomar Holdings, Inc. (PLMR) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy PLMR? — Investment Thesis Summary
Palomar Holdings, Inc. presents a balanced picture with arguments on both sides. The quality score of 74/100 indicates above-average profitability and business fundamentals. The value score of 68/100 suggests attractive pricing relative to fundamentals. Momentum is weak at 37/100, a headwind for near-term performance. Low volatility (stability score 70/100) reduces downside risk.
In summary, Palomar Holdings, Inc. (PLMR) earns a Hold rating with a composite score of 52.7/100 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 PLMR stock.
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Institutional Research Dossier
Palomar Holdings, Inc. (PLMR) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Palomar Holdings, Inc. (PLMR) receives a Hold rating, justified by its current valuation that appears to fairly reflect its growth prospects and profitability. While the company demonstrates strong financial performance, particularly in revenue growth and profitability metrics compared to the sector, its negative free cash flow and reliance on specialty insurance lines introduce elements of risk that temper a more bullish outlook. Investors should closely monitor Palomar's ability to sustain its growth trajectory while managing its capital allocation effectively.
The company's focus on specialty property insurance, while offering high growth potential, also exposes it to significant event-driven risks and competitive pressures. The current valuation, while not excessively high, does not offer a sufficient margin of safety to warrant an upgrade, especially considering the inherent volatility associated with the insurance industry and Palomar's specific niche. Therefore, a Hold rating is maintained, pending further evidence of consistent free cash flow generation and successful navigation of its unique risk profile.
Business Strategy & Overview
Palomar Holdings operates as a specialty property insurer, focusing on niche markets like earthquake, hurricane, and flood insurance. This specialization allows them to develop expertise and tailored products for specific geographic regions and risk profiles, differentiating them from larger, more generalized insurance providers. The company distributes its products through a network of retail agents, wholesale brokers, program administrators, and carrier partnerships, indicating a diversified distribution strategy aimed at maximizing market penetration.
The core of Palomar's strategy revolves around underwriting discipline and risk management. By focusing on specific perils and utilizing sophisticated modeling techniques, they aim to accurately assess and price risk, leading to profitable underwriting results. This approach is crucial in the specialty insurance market, where accurate risk assessment is paramount to avoid significant losses from catastrophic events. Their focus on technology and data analytics further enhances their ability to manage risk effectively.
Palomar's growth strategy involves expanding its product offerings and geographic footprint within the specialty property insurance market. This includes introducing new insurance products tailored to specific needs and entering new regions where demand for specialty coverage exists. The company also seeks to grow through strategic acquisitions and partnerships, allowing them to expand their distribution network and access new markets more quickly.
The competitive landscape for Palomar includes both large, established insurance companies and smaller, specialized players. Palomar differentiates itself through its focus on specific perils, its underwriting expertise, and its technology-driven approach to risk management. However, the company faces competition from other insurers who may offer similar products or have a stronger brand presence in certain markets. The ability to maintain underwriting discipline and effectively manage risk is critical for Palomar to succeed in this competitive environment.
Palomar's business model is inherently tied to the occurrence of natural disasters. While they aim to mitigate risk through careful underwriting, a major catastrophic event could significantly impact their financial performance. Therefore, effective risk management and diversification of their insurance portfolio are crucial for long-term sustainability. The company's ability to adapt to changing market conditions and maintain its competitive edge will determine its future success.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
86.7%
Sector: 9.4%
+824% VS SCTR
Economic Moat Analysis
Palomar's economic moat can be classified as Narrow. While the company possesses certain advantages in its niche market, these are not strong enough to create a wide and sustainable competitive advantage. The primary source of Palomar's moat stems from its specialization in specific property insurance lines, such as earthquake and hurricane coverage. This specialization allows them to develop expertise and proprietary underwriting models that are difficult for generalist insurers to replicate quickly.
The intangible assets associated with Palomar's underwriting expertise and data analytics capabilities contribute to its narrow moat. Their ability to accurately assess and price risk in these specialized areas provides a competitive edge over less specialized insurers. However, these advantages are not insurmountable, as other insurers can invest in developing similar expertise and technology over time.
Switching costs for policyholders in the specialty insurance market are relatively low. While customers may experience some inconvenience in switching insurers, the process is generally straightforward, and price competition can be a significant driver of customer decisions. This limits Palomar's ability to retain customers based solely on brand loyalty or switching costs.
The insurance industry, in general, does not exhibit strong network effects. The value of an insurance policy is primarily determined by its coverage and price, rather than the number of other policyholders in the network. This lack of network effects limits Palomar's ability to create a self-reinforcing competitive advantage.
While Palomar has demonstrated strong revenue growth and profitability, its reliance on specialty insurance lines exposes it to event-driven risks. A major catastrophic event could significantly impact their financial performance, potentially eroding their competitive advantage. Therefore, effective risk management and diversification of their insurance portfolio are crucial for maintaining their narrow moat.
In conclusion, Palomar possesses a narrow economic moat based on its specialization, underwriting expertise, and data analytics capabilities. However, the lack of strong switching costs, network effects, and the inherent event-driven risks in the insurance industry limit the sustainability and width of its moat. The company must continue to innovate and refine its risk management practices to maintain its competitive edge in the long term.
Financial Health & Profitability
Palomar Holdings demonstrates strong financial health, characterized by robust revenue growth and impressive profitability metrics. The company's revenue has grown significantly in recent years, with a TTM revenue of $875.97 million, representing an 86.7% increase compared to the sector average of 9.3%. This rapid growth indicates strong demand for its specialty insurance products and effective market penetration.
Palomar's profitability metrics are also impressive, with a TTM net income of $197.07 million and an operating margin of 28.4%, significantly higher than the sector average of 22.0%. The company's net margin of 22.3% also exceeds the sector average of 17.8%, highlighting its ability to generate profits from its operations. The ROE of 18.2% is also significantly higher than the sector average of 8.5%, indicating efficient utilization of equity to generate profits.
However, Palomar's free cash flow (FCF) is negative, with a TTM FCF of -$123.34 million. This is a concerning trend, as it suggests that the company is not generating enough cash from its operations to cover its capital expenditures and other cash outflows. While the company has a healthy cash balance of $111.74 million, it needs to improve its FCF generation to ensure long-term financial sustainability.
The company has no debt, which is a positive sign. The current ratio of 1.45 indicates that the company has sufficient current assets to cover its current liabilities. The quarterly financial history shows consistent revenue and net income growth, with operating margins remaining relatively stable. This indicates that the company is effectively managing its expenses while growing its revenue.
The debt-to-equity ratio of 224.00 is significantly higher than the sector average of 115.00. This is a point of concern, as it indicates that the company is highly leveraged. However, given that the company has no debt, this metric may be skewed by other factors, such as reinsurance arrangements or other off-balance sheet liabilities. Further investigation is needed to fully understand the implications of this high D/E ratio.
In summary, Palomar exhibits strong financial health, characterized by robust revenue growth, impressive profitability metrics, and a healthy cash balance. However, the negative free cash flow and high debt-to-equity ratio are points of concern that need to be addressed. The company needs to improve its FCF generation and manage its leverage effectively to ensure long-term financial sustainability.
Valuation Assessment
Palomar's valuation presents a mixed picture, suggesting a fair valuation relative to its growth and profitability. The company's P/E ratio of 15.8x is slightly above the sector average of 15.5x, indicating that investors are willing to pay a premium for its earnings. However, the premium is not excessive, suggesting that the market has already priced in some of its growth potential.
The EV/EBITDA ratio of 3.1x is below the sector average of 3.5x, suggesting that the company is undervalued relative to its earnings before interest, taxes, depreciation, and amortization. This could be due to the market's concerns about the company's negative free cash flow or its exposure to event-driven risks.
Given the company's high revenue growth rate of 86.7%, a P/E ratio of 15.8x could be considered reasonable. However, the negative free cash flow raises concerns about the sustainability of this growth. If the company is unable to improve its FCF generation, its valuation may be at risk.
Comparing Palomar's valuation to its historical multiples is challenging due to its relatively short history as a public company. However, the consistent revenue and earnings growth suggest that the company has been able to maintain its valuation over time.
The market cap of $3.12 billion suggests that Palomar is a mid-sized company. This size allows it to pursue growth opportunities while still being nimble enough to adapt to changing market conditions. However, it also means that the company is more vulnerable to competition from larger, more established players.
Overall, Palomar's valuation appears to be fair, reflecting its strong growth and profitability while also accounting for its negative free cash flow and event-driven risks. The Hold rating is justified by the lack of a clear undervaluation, as the current price seems to adequately reflect the company's prospects and challenges. Investors should closely monitor the company's FCF generation and risk management practices to determine whether its valuation is sustainable.
Risk & Uncertainty
Palomar faces several specific risks that could negatively impact its business and financial performance. A primary risk is its exposure to catastrophic events, particularly earthquakes, hurricanes, and floods. These events can result in significant claims losses, potentially exceeding the company's reinsurance coverage and impacting its profitability and capital position. The unpredictable nature and increasing frequency of natural disasters due to climate change exacerbate this risk.
Competition within the specialty property insurance market is another significant risk. Palomar faces competition from both large, established insurers and smaller, specialized players. Increased competition could lead to price wars and reduced underwriting margins, impacting the company's profitability. Maintaining underwriting discipline and effectively managing risk are crucial for Palomar to compete effectively in this environment.
Regulatory changes and compliance requirements pose a risk to Palomar's business. The insurance industry is heavily regulated, and changes in regulations could increase compliance costs and restrict the company's ability to operate in certain markets. Staying abreast of regulatory developments and ensuring compliance are essential for mitigating this risk.
Reinsurance risk is also a factor. Palomar relies on reinsurance to mitigate its exposure to catastrophic events. However, the availability and cost of reinsurance can fluctuate, impacting the company's ability to adequately protect itself against large losses. Ensuring access to sufficient and affordable reinsurance coverage is crucial for managing this risk.
Finally, the company's reliance on a network of retail agents, wholesale brokers, program administrators, and carrier partnerships introduces distribution risk. Any disruption to these relationships could negatively impact the company's ability to distribute its products and generate revenue. Maintaining strong relationships with its distribution partners is essential for mitigating this risk.
Bulls Say / Bears Say
The Bull Case
BULL VIEWPalomar's focus on underserved specialty insurance markets provides significant growth opportunities and allows for higher underwriting margins compared to commoditized insurance lines.
BULL VIEWThe company's sophisticated data analytics and underwriting expertise enable it to accurately assess and price risk, leading to superior underwriting results and profitability.
The Bear Case
BEAR VIEWPalomar's concentration in catastrophe-prone regions exposes it to significant event-driven risk, potentially leading to large losses and capital depletion in the event of a major natural disaster.
BEAR VIEWThe company's negative free cash flow raises concerns about its long-term financial sustainability and its ability to fund future growth without relying on external financing.
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 PLMR and 4,400+ other equities.
Palomar Holdings, Inc. exhibits a 242% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.6%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
28.4%
Sector: 21.8%
Net Margin
Bottom-line profitability
22.3%
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.
