While the S&P 500 is up 12.9% since February 2026, Everest Group (currently trading at $367.36 per share) has lagged behind, posting a return of 7.1%. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Is now the time to buy Everest Group, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Everest Group Will Underperform?
We’re sitting this one out for now. Here are three reasons we avoid EG, plus one stock we’d rather own.
1. Net Premiums Earned Point to Soft Demand
Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what's collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.
Everest Group’s net premiums earned has grown at a 1.2% annualized rate over the last two years, much worse than the broader insurance industry and slower than its total revenue.
2. Revenue Projections Show Stormy Skies Ahead
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Everest Group’s revenue to drop by 13.4%, a decrease from its 2.4% annualized growth for the past two years. This projection is underwhelming and implies its products and services will see some demand headwinds.
3. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Everest Group, its EPS declined by 15.5% annually over the last two years while its revenue grew by 2.4%. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Everest Group falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 0.9× forward P/B (or $367.36 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are better stocks to buy right now. We’d recommend looking at the Amazon and PayPal of Latin America.
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