Investment Thesis
AmeriSafe demonstrates solid operational profitability with an 18.6% operating margin and strong 18.7% ROE, supported by consistent revenue growth of 2.7% YoY. However, the company faces meaningful headwinds from declining diluted EPS (-14.5% YoY), weak free cash flow conversion (2.8% FCF margin), and significantly elevated liabilities relative to equity, which warrant cautious monitoring.
AMSF Strengths
- Strong operating margin of 18.6% and net margin of 14.9% demonstrate efficient core underwriting operations
- Exceptional ROE of 18.7% indicates effective deployment of shareholder capital despite moderate asset base
- Fortress balance sheet with zero long-term debt and zero leverage provides financial flexibility and stability
- Healthy interest coverage ratio of 104.0x reflects minimal financial distress risk
- Consistent revenue growth of 2.7% YoY in a stable insurance sector
AMSF Risks
- Diluted EPS declined 14.5% YoY while net income remained flat, indicating significant share dilution or expense growth
- Weak free cash flow generation of only $8.9M on $317.3M revenue (2.8% FCF margin) constrains capital allocation flexibility
- Elevated liabilities of $878.9M represent 78.8% of total assets; likely insurance reserves but warrants monitoring of claims trends
- Operating cash flow of $11.1M is extremely low relative to net income of $47.1M, suggesting potential earnings quality concerns
- Insider activity shows 12 Form 4 filings in 90 days; extent of buying vs. selling should be monitored for management confidence signals
Key Metrics to Watch
- Claims loss ratios and combined underwriting ratios to assess insurance portfolio health
- Operating cash flow conversion and working capital dynamics to explain cash generation gap
- Diluted share count trends and reasons for year-over-year EPS decline despite flat net income
- Investment portfolio performance and unrealized gains/losses on fixed income securities
- Premium growth rates by segment to validate revenue sustainability beyond reported 2.7% growth
AMSF Financial Metrics
AMSF Profitability Ratios
AMSF Balance Sheet & Liquidity
AMSF 5-Year Financial Trend
5-Year Trend Summary: AMERISAFE INC's revenue has declined by 14% over the 5-year period, indicating business contraction. The most recent EPS of $3.23 reflects profitable operations.
AMSF Growth Metrics (YoY)
AMSF Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $78.7M | $13.8M | $0.72 |
| Q2 2025 | $75.8M | $11.0M | $0.57 |
| Q1 2025 | $72.6M | $8.9M | $0.47 |
| Q3 2024 | $72.6M | $10.0M | $0.52 |
| Q2 2024 | $75.7M | $11.0M | $0.57 |
| Q1 2024 | $78.4M | $16.9M | $0.88 |
| Q3 2023 | $71.4M | $10.0M | $0.52 |
| Q2 2023 | $68.0M | $6.1M | $0.32 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AMSF Capital Allocation
AMSF SEC Filings
Access official SEC EDGAR filings for AMERISAFE INC (CIK: 0001018979)