Palomar Holdings delivered results ahead of Wall Street’s expectations in the third quarter, with management attributing outperformance to robust growth across all five product categories and especially strong execution in its crop, surety, and residential earthquake businesses. CEO Mac Armstrong highlighted that heightened consumer awareness following global earthquake activity and a competitor’s capacity constraints drove meaningful new business in residential earthquake, while the Gray Surety acquisition and the launch of PLMR.Farm powered substantial gains in surety and crop segments. The quarter was also marked by the company’s ability to adapt underwriting and reinsurance strategies to shifting market dynamics, supporting profitability amid broader industry headwinds.
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Palomar Holdings (PLMR) Q3 2026 highlights:
- Revenue $386.6 million vs S&P analysts’ estimates of $356.7 million (58% year-on-year growth, 8.4% beat)
- Adjusted EPS $3.01 vs S&P analysts’ estimates of $2.59 (16.3% beat)
- Operating margin 21.9%, down from 27.4% in the same quarter last year
- Market capitalization $4.09 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Palomar Holdings’s Q3 earnings call
- David Motemaden (Evercore): Asked about the durability of residential earthquake growth drivers. CEO Mac Armstrong explained that heightened awareness and a competitor’s capacity issues boosted new business, but high policy retention and inflation guard features should support continued growth even as those effects normalize.
- Paul Newsome (Piper Sandler): Inquired about which business segments are poised for further expansion. Armstrong cited crop, residential property, and surety as key growth vectors, while noting commercial property remains challenged.
- Andrew Andersen (Jefferies): Questioned the company’s ability to follow business between admitted and E&S markets. Armstrong said Palomar can leverage both platforms, especially in property lines, but will walk away from casualty business if admitted rates become too competitive.
- Mark Hughes (Truist Securities): Asked about seasonality and targets for the crop business. CFO Chris Uchida confirmed Q4 crop premiums are expected to be slightly lower but growing, with Armstrong reiterating confidence in reaching intermediate-term premium goals.
- Meyer Shields (KBW): Sought clarification on reserve development and the impact of crop reinsurance. Uchida noted favorable reinsurance outcomes reduced the net loss ratio, while Armstrong highlighted stable performance and risk management across the portfolio.
Catalysts in upcoming quarters
In the quarters ahead, the StockStory team will be monitoring (1) the pace of adoption and measurable impact from AI-enabled underwriting and policy administration tools, (2) continued product and geographic expansion in crop and surety lines, and (3) margin trends as Palomar balances growth with prudent risk transfer and capital allocation. Updates on new product launches in property and the integration of technology across specialty segments will also be important indicators of execution.
Palomar Holdings currently trades at $156, up from $144.04 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free).
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