Palomar (PLMR) Stock Forecast & Price Target

Palomar Holdings Inc. demonstrates a strong positive outlook, driven by significant growth in gross written premiums (GWP), particularly in its inland marine and other property sectors, which showcase substantial year-over-year increases. The company's net earned premiums are projected to benefit from improved retention rates in its crop insurance segment, with a striking 20% underwriting margin recorded in 2024. Additionally, the company's aggressive growth strategy aims to double its financial position within three years, supported by revised earnings per share (EPS) estimates reflecting robust performance and operational efficiency.

Palomar Holdings Inc. is facing a negative outlook primarily due to the decline in commercial earthquake rates, which dropped approximately 5% year-over-year in the fourth quarter of 2024, indicating potential adverse trends in premium revenue. The company's retention for catastrophes, at $17.5 million, constitutes only 5% of total shareholders' equity, posing risks to earnings variability during catastrophic events. Furthermore, the limited flexibility in underwriting agreements with program administrators raises concerns about potential future losses, particularly in light of increased competition and risks associated with catastrophic events such as California wildfires.