Palomar Holdings' Earnings Growth and Insider Alignment: A Closer Look.

Palomar Holdings' (NASDAQ:PLMR) earnings have grown 43% annually over the last 3 years, with revenue increasing 51% to $610m. The company has a high EBIT margin and has generated profits in the past. Insiders have bought shares in the company, increasing alignment of incentives between management and shareholders. While Palomar Holdings has a strong growth story, investors should still be cautious due to the high risk and high reward nature of the company.

Palomar Holdings, Inc. (NASDAQ:PLMR), a leading insurance holding company, has demonstrated strong financial performance over the past three years. The company reported a 43% annual growth in earnings, with revenue increasing by 51% to $610 million [2]. This growth is driven by the company's diverse product offerings, including specialty property insurance products, and its strategic partnerships in the U.S. flood insurance market [1].

Palomar Holdings has consistently generated profits and maintains a high EBIT margin. The company's revenue from continuous operations has shown steady growth, with a notable increase in the first quarter of 2025. The company's income from continuous operations reached $43 million in the first quarter of 2025, up from $26 million in the same period last year [2].

The company's insider activity further aligns the interests of management and shareholders. CFO T. Christopher Uchida and other insiders have recently bought shares in the company, indicating a positive outlook on its future prospects [3]. This increased insider ownership signals confidence in the company's strategic direction and growth potential.

However, investors should exercise caution given the high-risk, high-reward nature of the insurance industry. Palomar Holdings operates in a sector with significant volatility and potential for large losses, particularly in specialty insurance products. The company's high price-to-earnings ratio of 28.32 and a beta of 0.46 indicate a higher risk profile compared to the broader market [3].

Analysts have provided mixed signals regarding the stock's performance. Truist Financial raised their target price on Palomar shares from $150.00 to $178.00, while Jefferies Financial Group increased their target from $145.00 to $168.00, both with a "buy" rating [3]. Conversely, Keefe, Bruyette & Woods lowered their price target from $205.00 to $204.00, setting an "outperform" rating [3]. These varying opinions highlight the need for investors to conduct thorough due diligence before making investment decisions.

In conclusion, Palomar Holdings' strong financial performance and insider buying activity present an attractive investment opportunity. However, investors should carefully consider the company's high-risk profile and the diverse analyst opinions before making a decision.

References:

[1] https://stockanalysis.com/stocks/plmr/revenue/
[2] https://macrotrends.net/stocks/charts/PLMR/palomar-holdings/income-from-continuous-operations
[3] https://www.marketbeat.com/instant-alerts/filing-florida-financial-advisors-llc-purchases-shares-of-2071-palomar-holdings-inc-nasdaqplmr-2025-07-15/