Kingstone Companies KINS has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend. Its share price, as of Jan. 2, 2025, was $15.03, down 16.9% from its 52-week high of $18.08.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend. 

KINS was the 15th largest homeowner insurer in New York in 2023 with a market share of 1.6%. Kingstone Companies is poised to gain from the $200 million market opportunity with its competing carriers exiting the personal property market countrywide in July 2024.

KINS Trading Above 50-Day Moving Average

Image Source: Zacks Investment Research

KINS: An Outperformer

Shares of Kingstone Companies have rallied 612.3% in a year, zooming past the industry’s increase of 23.2%, the Finance sector’s rise of 23.2% and the Zacks S&P 500 composite’s gain of 26.1% in the same time frame. 

KINS Outperforms Industry, Sector & S&P in a Year

Image Source: Zacks Investment Research

Optimistic Analyst Sentiment for KINS

The Zacks Consensus Estimate for 2025 earnings has moved 25% north in the past 60 days.
 

Image Source: Zacks Investment Research

The consensus estimate for 2025 suggests a 10.7% year-over-year increase on 22.8% higher revenues of $192.1 million. The company has a Growth Score of A. 

KINS expects 2025 earnings per share between $1.60 and $2.00.

KINS’ Growth Strategy

Kingstone Companies’ heightened focus on core business, while prudently scaling back on unprofitable non-core business, poises this Northeast regional property and casualty insurer well for growth. The insurer only writes businesses that meet its underwriting standards and profit-margin objectives.

It has been successful in implementing a price increase ahead of inflation, matching prices to risks. KINS’ partnership with Earnix enhances its pricing capabilities and supports its strategic growth initiatives.

KINS expects direct written premium in core business to grow between 15% and 25% in 2025.

KINS’ efforts to drive higher average premiums, along with lowering commissions and staffing, helped it to lower its net underwriting expense ratio. With continued focus on lowering expenses, it now expects the net expense ratio to be less than 31% in 2024. 

Kingstone Companies has a solid reinsurance program in place that shields its balance sheet from erosion. It has strengthened its balance sheet by improving its cash balance while lowering debt. 

KINS’ Favorable Return on Capital

Return on equity in the trailing 12 months was 32.6%, higher than the industry average of 7.6%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.

KINS now expects ROE between 32% and 36% in 2024 and 24% and 32% in 2025.

Image Source: Zacks Investment Research

Its return on invested capital (ROIC) has been improving for quite some time. This reflects KINS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 27%, higher than the industry average of 5.8%.

Image Source: Zacks Investment Research

KINS Shares Are Expensive

The stock is overvalued compared to its industry. It is currently trading at a price-to-book multiple of 2.79, higher than the industry average of 1.53.
 

Image Source: Zacks Investment Research

It also has a Value Score of A. Back-tested results have shown that stocks with a solid Value Score and a favorable Zacks Rank are the most attractive, and their returns are better. 

Shares of other insurers like Heritage Insurance Holdings, Inc. HRTG and ROOT Inc. ROOT are also trading at a multiple higher than the industry average.

Final Take on KINS Stock

KINS’ focus on its core business, improving pricing and combined ratio, expanding margins and delivering strong earnings bodes well for growth.  

The target price of $17 reflects an 11.9% upside potential to Thursday's closing price.

Image Source: Zacks Investment Research

Despite its expensive valuation, the time appears right for potential investors to bet on this Zacks Rank #1 (Strong Buy) insurer, given positive analyst sentiment, its growth prospects and its VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Heritage Insurance Holdings, Inc. (HRTG) : Free Stock Analysis Report

Kingstone Companies, Inc (KINS) : Free Stock Analysis Report

Root, Inc. (ROOT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research