Arch Capital Group Ltd. ACGL
Arch Capital trades at 7.8x trailing earnings versus a 14.3x peer median — a 45% discount — despite generating $6.1B in free cash flow in FY2025 and returning $1.2B via buybacks in Q2 2026 alone. Q2 2026 after-tax operating income of $893M ($2.56/share) beat estimates on reserve gains and investment income, and the technical setup is constructive with the stock above both its 50-day ($98.92) and 200-day ($95.71) moving averages and MACD histogram turning positive.
The core concern is that diluted EPS of $11.62 in FY2025 was unchanged from FY2023 despite revenue growing from $13.3B to $19.9B, and catastrophe exposure plus softer property pricing could pressure underwriting results going forward. However, the extreme valuation discount, fortress balance sheet ($2.7B debt against $24.2B equity), and aggressive capital returns keep risk-reward favorable.
What could go wrong
- Catastrophe losses. Q2 2026 results showed catastrophe pressure offset only by reserve gains and investment income; an active hurricane season or large loss event could compress underwriting margins further.
- EPS stagnation. Diluted EPS has been pinned at $11.62 across both FY2023 and FY2025 despite revenue nearly doubling from $9.7B (FY2022) to $19.9B (FY2025), suggesting growth is being absorbed by loss costs and expenses.
- Softening property pricing. Recent coverage notes softer property pricing as a headwind; a sustained pricing downturn would slow premium growth that has been the primary top-line driver.
- Insider net selling. Over the trailing 24 months, insider transactions show a net dollar outflow of approximately $28.1M, with the CFO exercising options and selling shares at $99.32 on 2026-08-18.
What would change my mind
Where this comes from: peer_relative (as of latest available data) · fundamentals FY2025 (period ended 2025-12-31) · news — MarketBeat, published 2026-07-29 · news — MarketBeat, published 2026-07-29. Orin's read on ACGL; not advice.
Twelve months actual closes to 2026-09-24 · actual filings
50-day average 200-day average · volume below
On file
All ACGL filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $2.2B | 0.0% of fund |
| State Street | $1.6B | 0.0% of fund |
| Bamco /Ny/ | $1.5B | 2.3% of fund |
| Vanguard Portfolio Management | $1.4B | 0.1% of fund |
| Geode Capital Management | $1.0B | 0.1% of fund |
| Jpmorgan Chase & | $685.6M | 0.0% of fund |
77 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 108 Form 4 filings, net −$28.1M. 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 7.3× | 8.0× | 21.6× |
| EV/EBITDA | 6.5× | 8.1× | — |
| P/S | 1.73× | 1.97× | — |
| P/B | 1.4× | 1.5× | — |
Its P/E sits 20th percentile of its own last 5 years (−0.56σ from its own mean).
-10.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $6.1B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$114
$100 – $126 · +20% against today's price
- 16 buy or overweight
- 16 hold
- 2 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| ACGLArch Capital Group Ltd. | $33B | 7.3× | 6.5× | 46.2% | 24.4% | 20% |
| AIGAmerican International Group, Inc. | $40B | 13.6× | 6.3× | 38.1% | 11.1% | 7% |
| HIGThe Hartford Financial Services Group, Inc. | $34B | 8.1× | 7.9× | 43.9% | 15.0% | 23% |
| STTState Street Corporation | $50B | 15.7× | 14.8× | 65.3% | 15.0% | 12% |
| WRBW. R. Berkley Corporation | $25B | 13.8× | 10.3× | 44.8% | 10.7% | 20% |
| WTWWillis Towers Watson Public Limited Company | $27B | 18.0× | 12.2× | 53.8% | 15.5% | 20% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 46.7% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.