Arch Capital Group Ltd.
Arch Capital Group Ltd. Fundamental Analysis
Arch Capital Group Ltd. (ACGLP) shows strong financial fundamentals with a PE ratio of 8.22, profit margin of 22.77%, and ROE of 19.02%. The company generates $31.8B in annual revenue with strong year-over-year growth of 27.92%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 87.9/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ACGLP's fundamental strength across five key dimensions:
Efficiency Score
WeakACGLP struggles to generate sufficient returns from assets.
Valuation Score
ExcellentACGLP trades at attractive valuation levels.
Growth Score
ModerateACGLP shows steady but slowing expansion.
Financial Health Score
ModerateACGLP shows balanced financial health with some risks.
Profitability Score
ExcellentACGLP achieves industry-leading margins.
Key Financial Metrics
Is ACGLP Expensive or Cheap?
P/E Ratio
ACGLP trades at 8.22 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ACGLP's PEG of 1.02 indicates fair valuation.
Price to Book
The market values Arch Capital Group Ltd. at 1.49 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.28 times EBITDA. This is generally considered low.
How Well Does ACGLP Make Money?
Net Profit Margin
For every $100 in sales, Arch Capital Group Ltd. keeps $22.77 as profit after all expenses.
Operating Margin
Core operations generate 26.09 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.02 in profit for every $100 of shareholder equity.
ROA
Arch Capital Group Ltd. generates $6.56 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Arch Capital Group Ltd. generates strong operating cash flow of $10.15B, reflecting robust business health.
Free Cash Flow
Arch Capital Group Ltd. generates strong free cash flow of $10.08B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $16.61 in free cash annually.
FCF Yield
ACGLP converts 17.25% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.22
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.02
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.49
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.84
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.11
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How ACGLP Stacks Against Its Sector Peers
| Metric | ACGLP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.22 | 18.86 | Better (Cheaper) |
| ROE | 19.02% | 847.00% | Weak |
| Net Margin | 22.77% | 4202.00% | Weak |
| Debt/Equity | 0.11 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.00 | 667.17 | Weak Liquidity |
| ROA | 6.56% | -21543.00% (disorted) | Weak |
ACGLP outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Arch Capital Group Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
177.30%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
184.25%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
251.38%
Industry Style: Value, Dividend, Cyclical
High Growth