Palomar Holdings (PLMR) Q3 earnings: what to expect

What happened

Palomar Holdings, a specialty insurance provider, will report earnings this Wednesday after market close. Last quarter it reported revenue of $314.4 million, up 54.7% year on year. Analysts expect revenue to grow 45.8% this quarter.

Confirmed

Global impact / market context

Palomar has a history of beating Wall Street expectations, so the report will show whether that pattern holds as expected growth slows sharply from last year's pace. A miss could push investors to reassess how much they are willing to pay for the stock's growth.

Analyst inference

Peer results offer a mixed signal. Markel Group grew revenue 5.7% year on year, beating estimates by 10%, and RLI grew 5.3%, topping estimates. Both grew far slower than Palomar, so the report will test whether Palomar's faster growth is holding up.

Analyst inference

What to watch

1. Watch whether reported revenue reaches the 45.8% year-on-year growth analysts expect, which is slower than the 64.8% increase Palomar recorded in the same quarter last year. Confirmed
2. Watch whether Palomar again beats analysts' estimates, since it beat revenue expectations last quarter and has a history of exceeding Wall Street expectations. Analyst inference
3. Watch book value per share, which means the accounting value of the company's net assets divided by shares, because Palomar missed analysts' estimates for it last quarter. Analyst inference

Evidence

• stockstory.org