Why did PLMR's Q4 earnings surprise analysts?

Palomar Holdings (PLMR) reported an EPS surprise of $0.3 for Q4 2024, with an estimated EPS of $1.22 and a last price of $133.28. The company's gross written premium growth was impressive, with a 23% increase in Q4 2024 and a 39% increase excluding runoff lines. Adjusted net income grew by 48% in Q4 2024, inclusive of $8 million catastrophe losses. The adjusted return on equity (ROE) was 23% in Q4 2024.

1. **Strong Growth in Gross Written Premiums**: The company experienced a significant increase in gross written premiums, which contributed to the overall growth in earnings. This growth was particularly notable when excluding runoff lines, which suggests that the company's core operations are expanding.
2. **Adjusted Net Income Growth**: The 48% increase in adjusted net income reflects Palomar Holdings' improved profitability, despite the impact of catastrophe losses. This indicates that the company is effectively managing its underwriting and operational costs.
3. **Adjusted Return on Equity (ROE)**: The 23% adjusted ROE demonstrates the company's efficient use of equity to generate profits. A high ROE is generally considered favorable, as it indicates that the company is generating strong returns for its shareholders.

In summary, Palomar Holdings' Q4 earnings exceeded analysts' expectations due to strong growth in gross written premiums, significant adjusted net income growth, and a robust adjusted return on equity. These factors combined to deliver a stronger-than-expected financial performance.