ARCH CAPITAL GROUP LTD (ACGL)

BMG0450A1053 - Common Stock

93.1  -0.09 (-0.1%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to ACGL. ACGL was compared to 141 industry peers in the Insurance industry. While ACGL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ACGL has a correct valuation and a medium growth rate.



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8

1. Profitability

1.1 Basic Checks

In the past year ACGL was profitable.
ACGL had a positive operating cash flow in the past year.
In the past 5 years ACGL has always been profitable.
ACGL had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

ACGL has a Return On Assets of 7.47%. This is amongst the best in the industry. ACGL outperforms 93.53% of its industry peers.
ACGL's Return On Equity of 23.99% is amongst the best of the industry. ACGL outperforms 92.09% of its industry peers.
With a decent Return On Invested Capital value of 4.28%, ACGL is doing good in the industry, outperforming 79.86% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ACGL is in line with the industry average of 4.12%.
The last Return On Invested Capital (4.28%) for ACGL is above the 3 year average (3.48%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 7.47%
ROE 23.99%
ROIC 4.28%
ROA(3y)5.04%
ROA(5y)4.49%
ROE(3y)16.86%
ROE(5y)14.97%
ROIC(3y)3.48%
ROIC(5y)3.48%

1.3 Margins

ACGL has a Profit Margin of 33.02%. This is amongst the best in the industry. ACGL outperforms 94.24% of its industry peers.
In the last couple of years the Profit Margin of ACGL has grown nicely.
The Operating Margin of ACGL (23.75%) is better than 81.30% of its industry peers.
ACGL's Operating Margin has improved in the last couple of years.
Industry RankSector Rank
OM 23.75%
PM (TTM) 33.02%
GM N/A
OM growth 3Y6.49%
OM growth 5Y8.4%
PM growth 3Y26.43%
PM growth 5Y20.1%
GM growth 3YN/A
GM growth 5YN/A

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4

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ACGL is destroying value.
Compared to 1 year ago, ACGL has more shares outstanding
Compared to 5 years ago, ACGL has less shares outstanding
Compared to 1 year ago, ACGL has an improved debt to assets ratio.

2.2 Solvency

ACGL has a debt to FCF ratio of 0.48. This is a very positive value and a sign of high solvency as it would only need 0.48 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.48, ACGL belongs to the best of the industry, outperforming 87.77% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that ACGL is not too dependend on debt financing.
ACGL has a Debt to Equity ratio of 0.15. This is in the better half of the industry: ACGL outperforms 79.14% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.15
Debt/FCF 0.48
Altman-Z N/A
ROIC/WACC0.48
WACC8.85%

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A

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6

3. Growth

3.1 Past

ACGL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 73.87%, which is quite impressive.
ACGL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.84% yearly.
Looking at the last year, ACGL shows a very strong growth in Revenue. The Revenue has grown by 35.16%.
The Revenue has been growing by 19.82% on average over the past years. This is quite good.
EPS 1Y (TTM)73.87%
EPS 3Y84.29%
EPS 5Y30.84%
EPS growth Q2Q16.36%
Revenue 1Y (TTM)35.16%
Revenue growth 3Y16.89%
Revenue growth 5Y19.82%
Revenue growth Q2Q31.5%

3.2 Future

The Earnings Per Share is expected to grow by 2.68% on average over the next years.
Based on estimates for the next years, ACGL will show a quite strong growth in Revenue. The Revenue will grow by 9.42% on average per year.
EPS Next Y-2.89%
EPS Next 2Y1.68%
EPS Next 3Y2.68%
EPS Next 5YN/A
Revenue Next Year14.38%
Revenue Next 2Y11.24%
Revenue Next 3Y9.42%
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.

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5

4. Valuation

4.1 Price/Earnings Ratio

ACGL is valuated reasonably with a Price/Earnings ratio of 11.02.
Compared to the rest of the industry, the Price/Earnings ratio of ACGL is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 25.25. ACGL is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 11.35, which indicates a very decent valuation of ACGL.
The rest of the industry has a similar Price/Forward Earnings ratio as ACGL.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.67, ACGL is valued a bit cheaper.
Industry RankSector Rank
PE 11.02
Fwd PE 11.35

4.2 Price Multiples

ACGL's Enterprise Value to EBITDA ratio is in line with the industry average.
64.03% of the companies in the same industry are more expensive than ACGL, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 6.13
EV/EBITDA 11.28

4.3 Compensation for Growth

The excellent profitability rating of ACGL may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.36
EPS Next 2Y1.68%
EPS Next 3Y2.68%

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0

5. Dividend

5.1 Amount

No dividends for ACGL!.
Industry RankSector Rank
Dividend Yield N/A

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ARCH CAPITAL GROUP LTD

NASDAQ:ACGL (4/25/2024, 12:09:08 PM)

93.1

-0.09 (-0.1%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap34.93B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield N/A
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 11.02
Fwd PE 11.35
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.36
Profitability
Industry RankSector Rank
ROA 7.47%
ROE 23.99%
ROCE
ROIC
ROICexc
ROICexgc
OM 23.75%
PM (TTM) 33.02%
GM N/A
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.23
Health
Industry RankSector Rank
Debt/Equity 0.15
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio N/A
Quick Ratio N/A
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)73.87%
EPS 3Y84.29%
EPS 5Y
EPS growth Q2Q
EPS Next Y-2.89%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)35.16%
Revenue growth 3Y16.89%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y