Kingstone Stock Trades at a Premium to Industry: Time to Buy or Hold?

Core Insights - Kingstone Companies (KINS) shares are trading at a premium compared to the Zacks Property and Casualty Insurance industry, with a price-to-book value of 3.36X versus the industry average of 1.63X [1] - KINS is the 15th largest homeowner insurer in New York with a market share of 1.6% and is positioned to benefit from a $200 million market opportunity as competitors exit the personal property market in July 2024 [2] - KINS shares have increased by 5.4% year to date, outperforming its industry, sector, and the Zacks S&P 500 composite [4] Financial Performance - The Zacks Consensus Estimate for KINS is$ 1.55 for 2025, indicating a 10.7% year-over-year increase with revenues projected to rise by 22.8% to $192.6 million [10] - KINS expects earnings per share for 2025 to be between$ 1.60 and $2.00 [10] - Return on equity (ROE) for KINS in the trailing 12 months was 32.6%, significantly higher than the industry average of 7.6% [14] - KINS anticipates ROE to be between 32% and 36% in 2024 and between 24% and 32% in 2025 [14] - Return on invested capital (ROIC) for KINS was 27% in the trailing 12 months, also above the industry average of 5.8% [15] Growth Strategy - KINS is focusing on its core business while scaling back unprofitable non-core operations, only writing businesses that meet its underwriting standards [11] - The company has successfully implemented price increases ahead of inflation, enhancing its pricing capabilities through a partnership with Earnix [12] - KINS expects direct written premium in its core business to grow between 15% and 25% in 2025 [12] - The company has been reducing its net underwriting expense ratio by increasing average premiums and lowering commissions and staffing [12] Market Position - KINS shares are trading well above the 50-day moving average, indicating a bullish trend and are near the high end of its 52-week range [7] - The average target price for KINS is$ 17, reflecting a 4.6% upside potential from the recent closing price [17]