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LA JOLLA, Calif. - Palomar Holdings, Inc. (NASDAQ:PLMR), a specialty insurer with a market capitalization of $3.5 billion and impressive revenue growth of 47% in the last twelve months, announced today its definitive agreement to acquire Advanced AgProtection (AAP), a Texas-based Crop Managing General Agent. This move comes after Palomar’s strategic investment in AAP in 2023 and is expected to close in the second quarter of this year.
AAP, known for its industry expertise and robust relationships in the crop insurance sector, will now become part of Palomar’s growing portfolio, which includes a range of residential and commercial insurance products. According to InvestingPro analysis, Palomar currently trades below its Fair Value, suggesting potential upside for investors. Jon Christianson, President of Palomar, highlighted the acquisition as a "natural progression" for the company, aiming to establish Palomar as a preferred entity in the crop insurance marketplace.
The integration of AAP is anticipated to bolster Palomar’s infrastructure for continued growth and expansion within the crop insurance domain. With a strong financial health score rated as "GREAT" by InvestingPro, and four analysts recently revising earnings estimates upward, the company appears well-positioned for future growth. Christianson expressed enthusiasm for the opportunities the acquisition will present, stating, "Our teams are energized by the opportunities this combination brings."
Palomar’s insurance subsidiaries, including Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, hold an A (Excellent) financial strength rating from A.M. Best.
In its press release, Palomar also cautioned that the forward-looking statements regarding the acquisition are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The company emphasized that these statements are based on current beliefs and expectations and should not be seen as guarantees of future performance.
This acquisition is part of Palomar’s strategy to enhance its position in the specialty insurance market, particularly within the crop insurance sector. The information reported is based on a press release statement from Palomar Holdings, Inc.
In other recent news, Palomar Holdings reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.52, compared to the forecasted $1.22. However, the company’s revenue was slightly below expectations at $373.7 million against a forecast of $377.97 million. Palomar demonstrated robust growth with a 47.5% increase in adjusted net income for the quarter and a 43% increase for the full year. The company’s strategic expansion in specialty insurance lines contributed to these results. Meanwhile, Keefe, Bruyette & Woods (KBW) has maintained an Outperform rating on Palomar, raising its price target from $136.00 to $152.00. This decision followed a review of Palomar’s year-end 2024 financials, revealing a modest reserve redundancy of $7.6 million. KBW analysts have also revised their EPS estimates for Palomar, projecting $6.45 for 2025 and $7.90 for 2026, based on expectations of faster premium growth and lower catastrophe loss ratios. These developments reflect confidence in Palomar’s ability to sustain its growth trajectory.
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