RLI Corp.
RLI Corp. Fundamental Analysis
RLI Corp. (RLI) shows strong financial fundamentals with a PE ratio of 13.92, profit margin of 21.43%, and ROE of 14.18%. The company generates $1.9B in annual revenue with strong year-over-year growth of 17.09%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 82.2/100 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 RLI's fundamental strength across five key dimensions:
Efficiency Score
WeakRLI struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRLI trades at attractive valuation levels.
Growth Score
ExcellentRLI delivers strong and consistent growth momentum.
Financial Health Score
ExcellentRLI maintains a strong and stable balance sheet.
Profitability Score
ModerateRLI maintains healthy but balanced margins.
Key Financial Metrics
Is RLI Expensive or Cheap?
P/E Ratio
RLI trades at 13.92 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, RLI's PEG of 0.99 indicates potential undervaluation.
Price to Book
The market values RLI Corp. at 0.91 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.61 times EBITDA. This signals the market has high growth expectations.
How Well Does RLI Make Money?
Net Profit Margin
For every $100 in sales, RLI Corp. keeps $21.43 as profit after all expenses.
Operating Margin
Core operations generate 27.53 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.18 in profit for every $100 of shareholder equity.
ROA
RLI Corp. generates $6.55 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
RLI Corp. generates strong operating cash flow of $583.09M, reflecting robust business health.
Free Cash Flow
RLI Corp. generates strong free cash flow of $581.19M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.33 in free cash annually.
FCF Yield
RLI converts 10.44% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
13.92
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.99
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.91
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.97
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.33
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How RLI Stacks Against Its Sector Peers
| Metric | RLI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 13.92 | 18.86 | Better (Cheaper) |
| ROE | 14.18% | 847.00% | Weak |
| Net Margin | 21.43% | 4202.00% | Weak |
| Debt/Equity | 0.02 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 1.33 | 667.17 | Neutral |
| ROA | 6.55% | -21543.00% (disorted) | Weak |
RLI outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews RLI Corp.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
72.43%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
76.37%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
97.75%
Industry Style: Value, Dividend, Cyclical
High Growth