Analysts launch coverage on Accelerant Holdings, highlight growth potential

Investing.com -- Accelerant Holdings (NYSE:ARX) has recently been the subject of several coverage initiations from financial firms, each offering a distinct perspective on the company’s valuation and business model.

BMO Capital Markets initiated coverage with an “outperform” rating and a $34 price target.

The brokerage described Accelerant as an “insurance ecosystem” with a three-pronged business model encompassing a risk exchange, managing general agents (MGAs), and carrier balance sheets. 

The brokerage noted that while Accelerant has historically relied on its own balance sheet for growth, it is now positioned to onboard third-party insurance carriers, a critical step for future growth and margin expansion.

BMO also estimated that premiums written by third-party insurers will rise from 19% in the first quarter of 2025 to about 40% by the fourth quarter of the year.

RBC Capital Markets also initiated, assigning an “outperform” rating and a $33 price target.

RBC flagged Accelerant’s Risk Exchange as a unique asset with a compelling value proposition for its MGA members and Risk Capital Partners. 

The brokerage emphasized management’s success in curating a “high-quality supply of risk” and projected significant growth in written premiums through 2027. 

RBC also pointed to Accelerant’s proprietary technology, including a database of over 79 million rows of data as of the first quarter of 2025, as a key differentiator that enhances its attractiveness as a partner.

Citizens initiated coverage with a “market perform” rating, citing a valuation analysis that suggested fair value in the $32 to $33 range. This represented only modest upside from current levels. 

The brokerage described Accelerant as a “data-driven marketplace that connects selected specialty insurance underwriters...with capital providers,” noting that the business is highly differentiated and carries a strong likelihood of driving significant revenue growth and profitability.

Goldman Sachs initiated coverage with a “neutral’ rating and a 12-month price target of $30, implying about 6% upside from the current price of $28.33. 

Goldman acknowledged that Accelerant’s unique business model has generated “excess demand,” reflected in strong historical growth rates and underwriting profitability.

However, the brokerage also flagged several risks that differ from those of a typical capital-light insurance brokerage model. 

These include underwriting risk, the need to sustain better-than-industry underwriting margins, and the requirement to shift premiums directly to third-party carriers to fully realize the company’s potential. 

"Considering these factors together with an attractive growth runway, we see ARX stock as reasonably valued," Goldman Sachs said.