Arch Capital Group Ltd.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Arch Capital trades at a deep discount to diversified-insurance peers — 7.81x trailing earnings versus a 12.64x peer median (38% below) and 6.74x EV/EBITDA versus 11.47x (41% below) — supported by a fortress balance sheet with $2.73B total debt against $24.21B equity and $6.13B in FY2025 free cash flow.
However, the fundamental picture is mixed: Q2 2026 revenue of $4.47B fell 10.1% YoY and Q1 2026 declined 5.0% YoY, reversing FY2025's 14.3% full-year growth, while Q2 2026 diluted EPS of $3.00 is down from $3.23 in Q2 2025. The stock has recovered above its 50-day ($97.17) and 200-day ($96.39) moving averages with an RSI of 68, and Arch has beaten EPS estimates in each of the last eight quarters, but insider activity remains net negative at -$42.4M over 24 months and smart money sits slightly negative at -0.05 as of Q2 2026. With Q3 2026 results due October 27, the call hinges on whether revenue contraction stabilizes.
What could go wrong
- Revenue contraction persists. Q1 and Q2 2026 revenue declined 5.0% and 10.1% YoY respectively, a sharp reversal from FY2025's 14.3% growth; if this trend continues into H2 2026, the valuation discount may prove justified.
- Margin compression. Net margin fell from 33.4% in FY2023 to 22.1% in FY2025, and FY2025 EPS of $11.62 was flat versus FY2023 despite revenue nearly doubling over that span.
- Insider selling. Net insider disposition of 454,615 shares worth $42.4M over 24 months, including the CFO exercising and selling shares in August 2026 at $99.32.
- Technical overextension. RSI at 68 with the stock at $101.27, above both the 50-day ($97.17) and 200-day ($96.39) moving averages, suggests near-term overbought conditions ahead of Q3 earnings on October 27.
What would change my mind
Where this comes from: peer comparison · quarterly results · fundamentals · FY25 fundamentals. Orin's read on ACGL; not advice.
How has the share price moved?
Up 16.8% over twelve months, from $85.94 on 27 Oct 2025 to $100.34 at the Tue 27 Oct 2026 close. Its highest close in that time was $106.48 on 28 Jul 2026; the last close is 5.8% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 8.5M, on 18 Sep 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All ACGL filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $2.9B | 0.0% |
| Vanguard Capital Management | $2.2B | 0.0% |
| State Street | $1.6B | 0.0% |
| BAMCO | $1.5B | 2.3% |
| Vanguard Portfolio Management | $1.4B | 0.1% |
| Geode Capital Management | $1.0B | 0.1% |
| JPMorgan Chase | $685.6M | 0.0% |
| Invesco | $480.2M | 0.0% |
| Norges Bank | $453.8M | 0.0% |
| Morgan Stanley | $423.1M | 0.0% |
80 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 108 Form 4 filings; open-market trades net −$42.4M. Of the 50 on hand, 1 was an open-market purchase and 6 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ACGL
Orin answers questions about ACGL from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 8.1× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of its last 5 fiscal years (middle 8.1×); the typical Financial Services company on the NASDAQ is at 20.4×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 8.1×near usual | 8.1× | 20.4× |
| P/S | 1.81×below usual | 1.97× | — |
| EV/EBITDA | 8.2×near usual | 8.1× | — |
| P/B | 1.5×near usual | 1.5× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $112 (from $100 to $126) — 11% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$112
$100 – $126 · +11% against the last close
- 6 buy or overweight
- 9 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 8.1× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 12.4×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ACGLArch Capital Group Ltd. | $34B | 8.1× | 8.2× | n/a | 23.2% | 18% |
| CBChubb Limited | $137B | 12.4× | 13.1× | n/a | 18.0% | 15% |
| EGEverest Re Group, Ltd. | $15B | 8.3× | 6.6× | n/a | 11.5% | 12% |
| WRBW. R. Berkley Corporation | $27B | 15.2× | 11.1× | n/a | 10.4% | 19% |
- ACGL, CB, EG, WRB: gross margin is not used (n/a) for a bank, an insurer or a property trust — what it sells is money or space, not goods.
- WRB: dividend yield marked one-off — most of the last 12 months' payouts were special or irregular, so the yield is not income that repeats.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 8.1× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now8.1×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Financial Services companies on the NASDAQ were priced at a typical 20.4× their yearly profit (Tue 27 Oct close).
- Now20.4×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A cash-flow model is not built for a bank or an insurer — its cash moves with deposits, loans and claims — so none is shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.