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ARCH CAPITAL GROUP LTD (ACGL) Stock Fundamental Analysis

NASDAQ:ACGL - Nasdaq - BMG0450A1053 - Common Stock - Currency: USD

88.89  +0.89 (+1.01%)

After market: 88.89 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to ACGL. ACGL was compared to 143 industry peers in the Insurance industry. ACGL has an excellent profitability rating, but there are some minor concerns on its financial health. ACGL is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

ACGL had positive earnings in the past year.
ACGL had a positive operating cash flow in the past year.
ACGL had positive earnings in each of the past 5 years.
Each year in the past 5 years ACGL had a positive operating cash flow.
ACGL Yearly Net Income VS EBIT VS OCF VS FCFACGL Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

1.2 Ratios

ACGL's Return On Assets of 4.96% is amongst the best of the industry. ACGL outperforms 85.31% of its industry peers.
Looking at the Return On Equity, with a value of 17.29%, ACGL is in the better half of the industry, outperforming 77.62% of the companies in the same industry.
ACGL has a Return On Invested Capital of 3.96%. This is in the better half of the industry: ACGL outperforms 75.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ACGL is in line with the industry average of 4.06%.
The 3 year average ROIC (3.89%) for ACGL is below the current ROIC(3.96%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 4.96%
ROE 17.29%
ROIC 3.96%
ROA(3y)5.5%
ROA(5y)4.86%
ROE(3y)18.54%
ROE(5y)16.3%
ROIC(3y)3.89%
ROIC(5y)3.58%
ACGL Yearly ROA, ROE, ROICACGL Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15 20

1.3 Margins

Looking at the Profit Margin, with a value of 21.09%, ACGL belongs to the top of the industry, outperforming 91.61% of the companies in the same industry.
In the last couple of years the Profit Margin of ACGL has grown nicely.
The Operating Margin of ACGL (21.15%) is better than 82.52% of its industry peers.
ACGL's Operating Margin has declined in the last couple of years.
Industry RankSector Rank
OM 21.15%
PM (TTM) 21.09%
GM N/A
OM growth 3Y4.67%
OM growth 5Y-2.93%
PM growth 3Y2.45%
PM growth 5Y1.58%
GM growth 3YN/A
GM growth 5YN/A
ACGL Yearly Profit, Operating, Gross MarginsACGL Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

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4

2. Health

2.1 Basic Checks

ACGL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, ACGL has more shares outstanding
ACGL has less shares outstanding than it did 5 years ago.
ACGL has a better debt/assets ratio than last year.
ACGL Yearly Shares OutstandingACGL Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M
ACGL Yearly Total Debt VS Total AssetsACGL Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.2 Solvency

The Debt to FCF ratio of ACGL is 0.42, which is an excellent value as it means it would take ACGL, only 0.42 years of fcf income to pay off all of its debts.
ACGL has a better Debt to FCF ratio (0.42) than 81.12% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that ACGL is not too dependend on debt financing.
ACGL's Debt to Equity ratio of 0.13 is fine compared to the rest of the industry. ACGL outperforms 76.22% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.13
Debt/FCF 0.42
Altman-Z N/A
ROIC/WACC0.46
WACC8.63%
ACGL Yearly LT Debt VS Equity VS FCFACGL Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
ACGL Yearly Current Assets VS Current LiabilitesACGL Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M

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4

3. Growth

3.1 Past

The earnings per share for ACGL have decreased by -8.83% in the last year.
The Earnings Per Share has been growing by 26.96% on average over the past years. This is a very strong growth
The Revenue has grown by 26.93% in the past year. This is a very strong growth!
Measured over the past years, ACGL shows a quite strong growth in Revenue. The Revenue has been growing by 19.89% on average per year.
EPS 1Y (TTM)-8.83%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%-37.14%
Revenue 1Y (TTM)26.93%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%10.53%

3.2 Future

Based on estimates for the next years, ACGL will show a small growth in Earnings Per Share. The EPS will grow by 3.07% on average per year.
Based on estimates for the next years, ACGL will show a decrease in Revenue. The Revenue will decrease by -1.73% on average per year.
EPS Next Y-13.99%
EPS Next 2Y0.81%
EPS Next 3Y3.07%
EPS Next 5YN/A
Revenue Next Year9.12%
Revenue Next 2Y7.68%
Revenue Next 3Y-1.73%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
ACGL Yearly Revenue VS EstimatesACGL Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 5B 10B 15B
ACGL Yearly EPS VS EstimatesACGL Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6 8 10

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6

4. Valuation

4.1 Price/Earnings Ratio

ACGL is valuated reasonably with a Price/Earnings ratio of 10.63.
Based on the Price/Earnings ratio, ACGL is valued a bit cheaper than 62.24% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.05. ACGL is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 9.44, the valuation of ACGL can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ACGL is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of ACGL to the average of the S&P500 Index (37.67), we can say ACGL is valued rather cheaply.
Industry RankSector Rank
PE 10.63
Fwd PE 9.44
ACGL Price Earnings VS Forward Price EarningsACGL Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ACGL indicates a somewhat cheap valuation: ACGL is cheaper than 60.84% of the companies listed in the same industry.
ACGL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ACGL is cheaper than 71.33% of the companies in the same industry.
Industry RankSector Rank
P/FCF 5.11
EV/EBITDA 8.72
ACGL Per share dataACGL EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40 50

4.3 Compensation for Growth

ACGL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.39
EPS Next 2Y0.81%
EPS Next 3Y3.07%

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5

5. Dividend

5.1 Amount

ACGL has a Yearly Dividend Yield of 6.75%, which is a nice return.
ACGL's Dividend Yield is rather good when compared to the industry average which is at 3.29. ACGL pays more dividend than 92.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, ACGL pays a better dividend.
Industry RankSector Rank
Dividend Yield 6.75%

5.2 History

The dividend of ACGL is nicely growing with an annual growth rate of 118.11%!
ACGL does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)118.11%
Div Incr Years0
Div Non Decr Years0
ACGL Yearly Dividends per shareACGL Yearly Dividends per shareYearly Dividends per share 2024 1 2 3 4

5.3 Sustainability

51.29% of the earnings are spent on dividend by ACGL. This is a bit on the high side, but may be sustainable.
The dividend of ACGL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP51.29%
EPS Next 2Y0.81%
EPS Next 3Y3.07%
ACGL Yearly Income VS Free CF VS DividendACGL Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B
ACGL Dividend Payout.ACGL Dividend Payout, showing the Payout Ratio.ACGL Dividend Payout.PayoutRetained Earnings

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ARCH CAPITAL GROUP LTD

NASDAQ:ACGL (7/25/2025, 8:00:00 PM)

After market: 88.89 0 (0%)

88.89

+0.89 (+1.01%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)04-29 2025-04-29/amc
Earnings (Next)07-29 2025-07-29/amc
Inst Owners91.34%
Inst Owner Change-0.16%
Ins Owners3.13%
Ins Owner Change5.01%
Market Cap33.31B
Analysts79.09
Price Target111.61 (25.56%)
Short Float %1.11%
Short Ratio2.27
Dividend
Industry RankSector Rank
Dividend Yield 6.75%
Yearly Dividend5.08
Dividend Growth(5Y)118.11%
DP51.29%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)17.8%
Min EPS beat(2)14.08%
Max EPS beat(2)21.52%
EPS beat(4)3
Avg EPS beat(4)12.33%
Min EPS beat(4)-0.36%
Max EPS beat(4)21.52%
EPS beat(8)7
Avg EPS beat(8)17.99%
EPS beat(12)11
Avg EPS beat(12)25.11%
EPS beat(16)15
Avg EPS beat(16)27.97%
Revenue beat(2)0
Avg Revenue beat(2)-5.15%
Min Revenue beat(2)-6.02%
Max Revenue beat(2)-4.29%
Revenue beat(4)1
Avg Revenue beat(4)-3.68%
Min Revenue beat(4)-6.09%
Max Revenue beat(4)1.66%
Revenue beat(8)5
Avg Revenue beat(8)-0.6%
Revenue beat(12)7
Avg Revenue beat(12)1.17%
Revenue beat(16)9
Avg Revenue beat(16)0.88%
PT rev (1m)-2.44%
PT rev (3m)-2.71%
EPS NQ rev (1m)1.33%
EPS NQ rev (3m)-0.37%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)0.92%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-2.24%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-2.74%
Valuation
Industry RankSector Rank
PE 10.63
Fwd PE 9.44
P/S 1.89
P/FCF 5.11
P/OCF 5.07
P/B 1.55
P/tB 1.65
EV/EBITDA 8.72
EPS(TTM)8.36
EY9.4%
EPS(NY)9.42
Fwd EY10.6%
FCF(TTM)17.4
FCFY19.58%
OCF(TTM)17.52
OCFY19.71%
SpS47.13
BVpS57.49
TBVpS54
PEG (NY)N/A
PEG (5Y)0.39
Profitability
Industry RankSector Rank
ROA 4.96%
ROE 17.29%
ROCE 5.01%
ROIC 3.96%
ROICexc 4.02%
ROICexgc 5.41%
OM 21.15%
PM (TTM) 21.09%
GM N/A
FCFM 36.92%
ROA(3y)5.5%
ROA(5y)4.86%
ROE(3y)18.54%
ROE(5y)16.3%
ROIC(3y)3.89%
ROIC(5y)3.58%
ROICexc(3y)3.95%
ROICexc(5y)3.65%
ROICexgc(3y)5.27%
ROICexgc(5y)4.8%
ROCE(3y)4.92%
ROCE(5y)4.54%
ROICexcg growth 3Y12.01%
ROICexcg growth 5Y3.19%
ROICexc growth 3Y11.28%
ROICexc growth 5Y2.52%
OM growth 3Y4.67%
OM growth 5Y-2.93%
PM growth 3Y2.45%
PM growth 5Y1.58%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.23
Health
Industry RankSector Rank
Debt/Equity 0.13
Debt/FCF 0.42
Debt/EBITDA 0.68
Cap/Depr 17.11%
Cap/Sales 0.25%
Interest Coverage 29.42
Cash Conversion 164.22%
Profit Quality 175.04%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score6
WACC8.63%
ROIC/WACC0.46
Cap/Depr(3y)41.7%
Cap/Depr(5y)46.55%
Cap/Sales(3y)0.41%
Cap/Sales(5y)0.43%
Profit Quality(3y)182.15%
Profit Quality(5y)183.38%
High Growth Momentum
Growth
EPS 1Y (TTM)-8.83%
EPS 3Y37.06%
EPS 5Y26.96%
EPS Q2Q%-37.14%
EPS Next Y-13.99%
EPS Next 2Y0.81%
EPS Next 3Y3.07%
EPS Next 5YN/A
Revenue 1Y (TTM)26.93%
Revenue growth 3Y23.81%
Revenue growth 5Y19.89%
Sales Q2Q%10.53%
Revenue Next Year9.12%
Revenue Next 2Y7.68%
Revenue Next 3Y-1.73%
Revenue Next 5YN/A
EBIT growth 1Y7.85%
EBIT growth 3Y29.6%
EBIT growth 5Y16.38%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y56.19%
FCF growth 3Y25.05%
FCF growth 5Y26.92%
OCF growth 1Y55.37%
OCF growth 3Y24.87%
OCF growth 5Y26.64%