AMERISAFE, Inc. (NASDAQ: AMSF) has experienced a significant decline in its stock value, hitting a new 52-week low of $35.40 during mid-day trading on Thursday. This fall follows the release of disappointing earnings results, with the stock last trading at $35.4250. The sharp drop is a stark contrast to its previous closing price of $36.89.
The insurance provider reported earnings per share (EPS) of $0.51 for the quarter, falling short of analysts’ expectations of $0.57 by $0.06. Despite this earnings miss, AMERISAFE’s revenue for the quarter was $81.59 million, slightly exceeding the forecast of $80.05 million. The company recorded a net margin of 14.86% and a return on equity of 15.66%.
Dividend Announcement and Market Sentiment
In a related development, AMERISAFE announced a quarterly dividend of $0.41 per share, to be paid on March 20, 2025. This dividend will be distributed to stockholders of record as of March 13, 2025, with an ex-dividend date also set for March 13, 2025. The announcement indicates an annualized dividend of $1.64 and a yield of 4.9%, with a current payout ratio of 59.77%.
Recent news surrounding AMERISAFE has been mixed. On one hand, the company’s decision to raise its quarterly dividend by 5.1% serves as a positive indicator. This cash-return strategy may appeal to income-focused investors, potentially offering some support to the share price. Management highlighted strong premium growth during their recent earnings call, suggesting a robust return on equity and year-over-year revenue increase, which are supportive signs for future earnings potential.
Conversely, the disappointing EPS results were attributed to rising expenses and cost-of-sales pressures, which have impacted operating profit despite revenue growth. Additionally, an increase in short interest, with approximately 372,998 shares shorted as of February 13, represents around 2% of total shares. This trend can increase selling pressure if market sentiment continues to worsen.
Analyst Perspectives and Institutional Activity
Several equities research analysts have provided insights into AMERISAFE’s stock. Weiss Ratings recently reaffirmed a “hold (c-)” rating, while Citizens JMP lowered their target price from $60.00 to $55.00, maintaining a “market outperform” rating. Morgan Stanley also set a price target of $55.00. Analysts from Wall Street Zen upgraded the stock from a “sell” to a “hold” rating, indicating a moderate level of confidence in the company’s performance.
Currently, two analysts have issued a Buy rating, while two others have given Hold ratings. According to MarketBeat, the stock holds an average rating of “Moderate Buy” with an average price target of $53.33.
In terms of institutional activity, several hedge funds have adjusted their holdings in AMERISAFE. Clearstead Advisors LLC increased its stake by 142.4% in the fourth quarter, acquiring an additional 386 shares. Similarly, Hantz Financial Services Inc. raised its position by 159.6%, adding 439 shares to its portfolio. Quarry LP also boosted its stake by 346.9% during the third quarter, now owning 943 shares valued at $41,000. Institutional investors currently hold 97.41% of AMERISAFE’s stock.
AMERISAFE operates as a specialty provider of workers’ compensation insurance products in the United States, focusing on small to mid-sized businesses in higher-hazard industries. With its network of independent agents, the company offers tailored coverage solutions that incorporate risk management and loss prevention programs.
As the market continues to respond to AMERISAFE’s performance, the upcoming dividend payment and strategic insights from management will be critical for investors navigating the company’s evolving landscape.
