Palomar Q4 Revenue Soars 62.7% to $253M, Combined Ratio Miss Sparks 10% Drop
Palomar reported Q4 revenue of $253.4 million, up 62.7% year over year, and adjusted EPS of $2.24, beating consensus by 7.1%. However, its underwriting combined ratio of 76.8% missed estimates by 2.06 points, triggering a near 10% stock plunge despite a sharply raised 2026 outlook.
1. Q4 Financial Results
Palomar reported Q4 2025 revenue of $253.4 million, a 62.7% year-over-year increase driven by higher gross written premiums, and delivered adjusted earnings per share of $2.24, topping analyst projections by 7.1%.
2. Underwriting Performance
The insurer recorded a combined ratio of 76.8% for the quarter, unchanged from last year but 2.06 percentage points above consensus, signaling weaker-than-expected underwriting profitability.
3. Stock Market Reaction
Following the underwriting shortfall, investors sold off shares, sending the stock down nearly 10% in a single session as market attention shifted from headline beats to margin metrics.
4. 2026 Outlook Revision
Management issued a sharply raised full-year 2026 outlook, citing sustained premium growth and tighter underwriting discipline, though specific guidance numbers were withheld.