Palomar Holdings (PLMR) closed FY 2025 with fourth quarter revenue of US$253.4 million and basic EPS of US$2.12. Trailing twelve month revenue was US$876.0 million and EPS was US$7.40, reflecting the full year earnings profile. Over the past six quarters, the company’s revenue moved from US$148.5 million in Q3 2024 to US$253.4 million in Q4 2025. Over the same period, quarterly EPS shifted from US$1.18 to US$2.12, setting up a results season where the focus falls squarely on how efficiently underwriting and expense discipline are flowing through to margins.

See our full analysis for Palomar Holdings.

With the headline numbers on the table, the next step is to see how this margin story lines up with the dominant narratives around Palomar's growth, risk profile, and earnings quality.

Combined ratio sits at 76.9% on a trailing basis

• On a trailing twelve month view to Q4 2025, Palomar reported a combined ratio of 76.9% and net income of US$197.1 million on US$876.0 million of revenue, pointing to a relatively efficient underwriting and expense profile in insurance terms.
• Consensus narrative highlights that strong combined ratios and low loss ratios are linked to proprietary technology and disciplined underwriting, and the current figures reflect that story in a few ways:
  • Across the last four reported quarters, quarterly net income stayed between US$42.9 million and US$56.2 million while revenue moved from US$174.6 million to US$253.4 million. This lines up with the idea that risk selection and pricing are supporting earnings quality.
  • The trailing net margin of 22.5% compared with 21.2% a year earlier fits with the view that better risk management and reinsurance terms are helping more of each premium dollar drop to the bottom line.

67.6% earnings growth and TTM EPS of US$7.40

• Over the last twelve months, earnings grew 67.6% and trailing twelve month basic EPS reached US$7.40, with quarterly EPS in FY 2025 ranging from US$1.61 in Q1 to US$2.12 in Q4 on revenue between US$174.6 million and US$253.4 million.
• Consensus narrative points to expanding specialty lines and technology driven underwriting as key growth drivers, and the recent earnings profile offers a mixed check on that view:
  • Trailing revenue of US$876.0 million and net income of US$197.1 million, alongside forecasts for revenue growth of about 18.2% per year and earnings growth of roughly 15.0% per year, are consistent with the idea that new products and geographies are contributing meaningfully to the top line.
  • At the same time, analysts expect profit margins to move from around 22.7% to 21.1% over the next three years, which challenges the most optimistic version of the bullish view that margin expansion from technology and diversification will continue without interruption.

On these numbers, bulls argue the growth engine is still very much on. The margin forecasts, however, suggest you should think carefully about how durable that pace really is before leaning too far in any one direction. 🐂 Palomar Holdings Bull Case

P/E of 14.9x with DCF fair value at US$286.25

• Palomar is trading on a trailing P/E of 14.9x at a share price of US$110.75, compared with 11.5x for the wider US Insurance industry and about 7x for peers, while a DCF fair value of US$286.25 and an analyst price target of US$164.17 both sit above the current price.
• Critics highlight the higher P/E relative to peers as a key concern, and the current valuation data gives both sides something to point to:
  • On one hand, trading at about 61.3% below the cited DCF fair value and below the US$164.17 analyst target, while earnings grew 67.6% over the past year, supports the idea that growth and profitability may not be fully reflected in the current share price.
  • On the other hand, the 14.9x P/E versus an industry 11.5x and peer 7x means the stock is still priced richer than many insurance companies, which fits with a more cautious, quasi bearish angle that investors are already paying up for the growth profile.

Skeptics point to this valuation gap versus peers as a reason to stay disciplined on price, even with the growth and margin profile laid out here. 🐻 Palomar Holdings Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Palomar Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With both upbeat and cautious signals in the mix, this is a moment to move quickly, review the underlying numbers yourself, and decide where you stand by weighing the 4 key rewards and 1 important warning sign

See What Else Is Out There

Palomar’s richer 14.9x P/E versus peers and expectations for margins to ease slightly leave you with less valuation cushion if the story changes.

If you want more breathing room on price, now is a good time to check stocks trading on more modest valuations using the 44 high quality undervalued stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.