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Saturday, January 23, 2021

Is the Rough Ride Over for Arch Capital Group Ltd. (ACGL)

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Arch Capital Group Ltd. (ACGL) shares are trading at lower $33.03 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $39.20.

To add more color to this target, the company’s high over the last year is $48.32 and the low is $20.93. Over the last 52 weeks, ACGL is down -21.79% while the S&P 500 is up 15.29%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, ACGL reported a profit of $512.39 million. Arch Capital Group Ltd. also saw revenues increase to $2.31 billion. In addition, ACGL has free cash flow of $2.3 billion as of 09-2020. The company’s EBITDA came in at $615.33 million which compares well with its peers.

ACGL booked profit margins of 14.70%, its Return on Equity (ROE) is 10.40%, and its Return on Assets is 2.90%. All told, it is clear that, ACGL needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. ACGL has a short ratio of 2.22 and outstanding shares of 402.85M.

Company Outlook

ACGL has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.15 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 2.79. Investors should also keep an eye on sector updates as ACGL has historically followed its peers on positive news.

All told, Arch Capital Group Ltd. ACGL has strung together solid data and demonstrated underlying fundamentals. At its current valuation, ACGL represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Arch Capital Group Ltd. ACGL is now commanding a market cap of 13.62B and a float of 394.15M. ACGL is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of ACGL stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in ACGL, either long or short, and we have not been compensated for this article.

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