Q3 Earnings Preview for Palomar (NasdaqGS:PLMR)


Palomar Holdings, Inc. (NasdaqGS:PLMR) is scheduled to report Q3 earnings results after markets close for trading on November 10, 2020.

The company is expected to report earnings of -$0.54/share on revenue of $45.553 million. The consensus earnings per share (EPS) of -$0.54/share is based on a poll of 7 analysts and represents a decline in eps of −236.1% over the same quarter last year, when the company reported earnings of $0.40/share.

The revenue forecast of $45.553 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 60.6%. Last year the company reported $28.371 million in revenue for the quarter.

Expected to report EPS of -$0.54/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $45.55 $28.37 60.6%
EPS -$0.54 $0.40 −236.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 6 tracked quarters, missed 1 quarter, and met expectations 1 quarter.

What are your expectations from Palomar Holdings, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.49 $0.52 6.4% Beat
Q1, 2020 $0.42 $0.50 20.0% Beat
Q4, 2019 $0.51 $0.48 −5.1% Missed
Q3, 2019 $0.40 $0.40 0% Met
Q2, 2019 $0.29 $0.36 22.3% Beat
Q1, 2019 $0.38 $0.52 35.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $97.23 $98.84 1.7% Increase
May 5, 2020 $53.87 $56.25 4.4% Increase
February 18, 2020 $57.83 $57.62 −0.4% Decline
November 4, 2019 $44.10 $43.05 −2.4% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.60, the model suggests that the company is likely an earnings manipulator. A value of −1.60 implies a 5.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Palomar Holdings, Inc. is currently trading at $100.84/share, up 2.2% for the day. The company is trading at approximately 83.3% of its 52-week high of $121.87/share. The company’s stock price is up 2.0% since the last earnings report and up 10.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 54.66 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

NasdaqGS:PLMR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 60.88 and a forward P/E multiple of 98.21.

Palomar Holdings, Inc.’s current share price also implies a price-to-book (P/B) multiple of 6.83. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $100.84
P/E Ratio 60.9x
P/E Ratio (Fwd) 98.2x
PEG Ratio 0.0
Total Debt / Total Capital 0.0%
Levered Free Cash Flow $49.172 million
EV / EBITDA 39.2x


Palomar Holdings, Inc. is a mid-cap stock with a market capitalization of $2.512 billion and a total enterprise value of $2.403 billion. The company operates in the Financials sector and the Insurance industry.

Palomar Holdings, Inc. provides specialty property insurance. It offers personal and commercial specialty property insurance products, including residential and commercial earthquake, specialty homeowners, commercial all-risk, Hawaii hurricane, residential flood, inland marine, assumed reinsurance, and real estate investor. The company was formerly known as GC Palomar Holdings. Palomar Holdings, Inc. was incorporated in 2013 and is headquartered in La Jolla, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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