‘Jump In – If Price Doesn't Scare You,' Says Investor About Palantir Stock
Protect Your Portfolio Against Market Uncertainty
Though Palantir is not immune from the overall trends that have beset global economies, the company also shows no indications that its growth is slowing down. Just last month, at the company's AIPCon 6 gathering, Palantir announced a slew of new partnerships with major firms such as Qualcomm and Databricks.
The proof, as the saying goes, is in the pudding, and PLTR's share price has risen over 60% in 2025 – no trivial matter considering most of the tech industry has been sinking this year.
The company is gearing up to release its Q1 2025 results next week, on May 5, having guided for revenues between $858 million and $862 million. This would represent year-over-year growth of ~35%.
The big question facing investors is whether the company's white-hot growth trajectory has continued unabated through the early turbulence of 2025.
Investor Adria Cimino remains bullish on Palantir's long-term potential but isn't rushing to hit the buy button just yet.
'Rushing out to buy Palantir before May 5 to potentially benefit from earnings news is a bet on the short term, and that's risky,' cautions the 5-star investor.
Cimino notes that Palantir's previous track record has set a high bar, meaning that any stumbles – regardless of the cause – could spark a downslide. President Trump's on-again, off-again tariff policy has wreaked havoc throughout the markets, leaving the geopolitical situation far from stable.
'And any potential words of uncertainty from Palantir regarding this might worry investors,' adds Cimino.
Still, the investor points out that there are many reasons to be 'optimistic' about PLTR, such as the company's proven ability to expand its commercial and sovereign businesses by offering 'game-changing' AI-powered solutions specifically designed using the clients' own data.
'Aggressive tech investors who don't mind paying a bit more for a top-performing company may scoop up a few shares today — and keep this player in their portfolio for the long haul,' Cimino summed up. (To watch Cimino's track record, click here)
Meanwhile, Wall Street is erring on the side of caution. With 12 Hold recommendations accompanied by 3 Buys and Sells, each, PLTR holds a consensus Hold (i.e., Neutral) rating. The 12-month average price target of $93.69 would translate into losses approaching 24% in the year ahead. (See PLTR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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Globe and Mail
an hour ago
- Globe and Mail
No Pain, No 100,000% Gain
Since David Gardner's initial Nvidia (NASDAQ: NVDA) recommendation on April 15, 2005, a passive S&P 500 index investor could have enjoyed a 726% return simply by reinvesting dividends. But that 2005 rec, now Stock Advisor 's all-time top performer, leaves the market in the dust with a return of 107,479% as of this writing. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » That is not a typo. Nvidia is the first Stock Advisor pick to grow more than 1,000 times in value! While it's easy to highlight a winner, the real challenge was having the patience to hold Nvidia shares through every bout of uncertainty over the years. What lessons could we learn from the most successful outlier in our flagship service? Quite a few. Despite its impressive returns, holding onto Nvidia wasn't a walk in the park. Let's explore what it truly takes to achieve a 1,000x return. At a Glance The Good The Bad The Ugly The Foolish Bottom Line The Good A Stock That Has Doubled 10 Times The Rule of 72 is a simple way to estimate how long it takes for an investment to double. If a stock grows 9% a year, roughly the historical return of the stock market, it would take eight years (72 / 9) to double an investment. Now, imagine your favorite stocks are horses running a race around a track. Each time they complete a lap, they double in value. Knowing that the stock market as a whole might take nearly a decade to double, which horses would you bet on? In this race, the horses don't stop running, and you can choose to back those clearly leading the pack -- including Nvidia, which has now finished 10 laps of doubling since 2005, with 9 of those laps taking 2.5 years or less. Lap Multiple Achieved Month Started Months to Complete 1 2x April 2005 9 2 4x Jan. 2006 17 3 8x June 2007 109 4 16x July 2016 5 5 32x Dec. 2016 13 6 64x Jan. 2018 30 7 128x July 2020 13 8 256x Aug. 2021 22 9 512x June 2023 9 10 1,024x March 2024 16 Many investors might have hesitated to buy Nvidia, waiting for a pullback after seeing it double time and again. However, those who waited often found themselves still sidelined, missing out on its phenomenal growth. Anchoring to past prices is common, but in this endless race, wouldn't you prefer to back the horse consistently lapping the field? As David Gardner wisely notes, five harmful words for investors are, "I guess I missed it." The next doubling for Nvidia would require another $4 trillion in value, a feat that might not seem as far-fetched in the future. Excluding PetroChina 's brief brush with a trillion-dollar valuation in 2007, Apple (NASDAQ: AAPL) founded the trillion-dollar club in August 2018 before reaching the $2 trillion and $3 trillion thresholds in 2020 and 2023, respectively. Nvidia broke the $4 trillion barrier earlier in July, with Microsoft (NASDAQ: MSFT) joining on Wednesday. There's no guarantee that Nvidia will ever get to $8 trillion or $16 trillion -- let alone get there first -- but it does have the inside lane. More Years of Doubling Than Down Years One fun stat I've stumbled upon while following Nvidia comes courtesy of a website listing calendar-year returns as well as pre-split pricing (which I'll mention again later). Including the partial year of its 1999 IPO, Nvidia has enjoyed 10 calendar years with gains of 100% or more, while the stock fell by any amount in only 7 years so far. 1999, 2001, 2003, 2006, 2009, 2016, 2020, 2021, 2023, 2024 2002, 2008, 2010, 2011, 2012, 2018, 2022 Nvidia isn't unique in this category -- Shopify (NASDAQ: SHOP) and The Trade Desk (NASDAQ: TTD) share the same distinction of having more years of 100% gains than of losses for now -- but it's noteworthy. The Winner Outweighing All the Losers Stock Advisor members have access to our complete scorecard, where each recommendation is tracked against the S&P 500 from the time it's selected until it's sold (or held through today). With two stock picks each month since 2002, we've seen hundreds of winners and losers along the way. Data Source: The Motley Fool. Returns as of July 29, 2025. Graphic: Rik Silverman. This graphic illustrates the returns of all 562 Stock Advisor recommendations relative to their S&P 500 benchmark. David's April 2005 Nvidia selection leads with more than 106,000 percentage points of outperformance above the market's 726% return in the same period. Not all underperformers lost value; some, like FedEx 's (NYSE: FDX) 403% gain since 2003, underwhelmed compared to the S&P's 959% over the same time frame. One standout like Nvidia can outweigh all the underperformers in Stock Advisor 's storied history. David's 2009 Nvidia rerecommendation, along with two long-standing Netflix (NASDAQ: NFLX) recommendations, further highlights this point. But it gets better: The gain on the initial rec since April 15, 2025 -- the compounding just after the 20th anniversary -- nearly makes up for the hundreds of losing stock picks over the years. Nvidia exemplifies the Foolish principle of holding winners and not selling too early. Yet its journey wasn't always smooth. A stock that seems today to be taking a long victory lap once appeared to be slowly circling the drain. The Bad The Stock That Plummeted 85% Imagine a stock falling 80%. It might invoke thoughts of high-growth investments facing challenges or an unfavorable interest rate climate, perhaps echoing bad memories of 2021 or 2022. If you remember the 2000s, you might recall that something big happened in the market before the end of the decade. The first Nvidia rec quintupled by 2007 only to lose all those gains in mere months. Data Source: Yahoo Finance. Returns as of July 29, 2025. Graphic: Rik Silverman. If it needs to be repeated, this is a chapter in the greatest stock story of the last 20 years. The 85% plummet was the steepest for Nvidia shares since 2005, but seeing it trade significantly below previous highs was common for shareholders over the last 20-odd years. On average, Nvidia spent its time on our scorecard 34% below its then-highs. If we count days on which the stock closed more than 20% below its historic high price, Nvidia was in its own bear market more than 59% of the time! Let that marinate for a moment. We all wish for a time machine so we could go back and buy Nvidia stock decades in the past. But if you had owned shares at that time, would you honestly have held through to today? After all, the discomfort wasn't limited to the sharp pangs of these low points. There was also a dull pain that lasted for years. The Lost Decade On October 17, 2007, Nvidia closed at an all-time high. The next day, shares declined, and the record high was not reset until May 15, 2016. There's a reason the Fool encourages investors to hold stocks for five years or more. Periods of volatility or apparent mispricing can persist much longer than most investors (and all traders) are willing to wait. Could you sit on your hands while a stock was 85% underwater after six months or 50% in the red after the better part of a decade, waiting like a good Foolish investor should? And after all of those years waiting to break even, would you cut ties as soon as shares rose in spring 2016 back to prices of more than eight years earlier? If that sounds like something you might have done, I have some bad news. Guess which Fool rec was the best-performing stock in the entire S&P 500 in 2016? That would be Nvidia, of course, the dog many investors sold along the way. It gained 227% that year, before David recommended it for a third time in January 2017. The Ugly Holding Leads to Portfolio Concentration Nothing is quite as unpleasant as several years of dismal returns, but what differentiates Foolish investing outcomes is often a willingness to sit in your own discomfort and build the long-term-investor mindset when the short run looks bleak. That involves challenging conventional wisdom. I suspect most investors wouldn't believe the following: A large cap worth $40 billion in 2016 could grow 100x in the next nine years. A mega cap worth $400 billion in 2022 could grow 10x in just three years. An investor who sold at the 2007 peak and who successfully avoided the 85% drop would have missed out on 17,660% gains if they stayed on the sidelines. An investor who locked in gains by selling half their position when Nvidia first doubled and stayed in with "house money" has now given up 54,689% of the gains they could have earned. The greatest mistake we make as investors is selling our winners too early. The opportunity cost of those mistakes compounds over time as well, but that doesn't mean you should never sell. While the pullback in Nvidia's stock price during the great financial crisis was much deeper from prior highs than any drop since, relatively smaller recent drawdowns had much larger dollar impacts for anyone who has held many years. The 37% pullback between January and April meant that the earliest Nvidia rec dropped from being a 910-bagger to a 574-bagger, temporarily losing 336 times an original investment. We know now that Nvidia went on to greater heights within months, but a concentrated position without any allocation guardrails would have become a major risk. You have more flexibility to set your own sleep number and trim overweight positions than the Stock Advisor team has on our scorecard. It's possible that we could someday keep Nvidia as a high-conviction buy recommendation while at the same time closing one or two of the active recs as a reminder of prudent portfolio management rather than as a statement of near-term outlooks or overvaluation. The Thesis Had to Evolve In the 1990s, our Chief Rule Breaker actually rooted against Nvidia, seeing it as a rival to his preferred video game graphics card company, 3Dfx. By 2005, Nvidia had acquired 3Dfx, and David's investment thesis focused on Nvidia's growth potential with Microsoft's Xbox and Motorola (NYSE: MSI) cellphones. Cloud computing and data centers, now Nvidia's largest business segment, were nonexistent. Cryptocurrency mining hadn't been invented yet, and artificial intelligence was absent from the original vision. Even CEO Jensen Huang's enduring leadership wasn't part of David's initial analysis. While some investment theses remain straightforward -- perhaps selling more shoes or opening more coffee shops -- the biggest winners have a quality we call optionality. You might foresee that an online bookseller like Amazon (NASDAQ: AMZN) could become "the everything store" or that Netflix could pivot from mailed DVDs to video streaming. It's crucial to look ahead, acknowledging that successful investments might differ greatly from their original business models. But reevaluating your understanding of your investments is easier said than done, and it might take some extra homework to stay comfortable holding onto developing winners. The Penny Stock That Wasn't Nvidia's 2005 cost basis on our scorecard is just $0.16, at least until it's adjusted further lower due to dividends or future stock splits. One of the biggest mistakes new investors often make is to see data like this and presume the only place to hunt for multibaggers is among penny stocks. The reason for that misdirection is stock splits. Nvidia has never traded in penny-stock territory since 2005 due to four splits: April 2006: 2-for-1 split September 2007: 3-for-2 split July 2021: 4-for-1 split June 2024: 10-for-1 split If you followed the April 2005 recommendation, an investment of less than $20 per share would now translate to 120 shares for every 1 held since then. Without these splits, that single share would today be worth above $21,000. Nvidia would have the same market cap but far fewer shares outstanding. While fractional shares weren't available back then, today's investors can buy partial shares of many companies through their broker for as little as $5. For the same dollar amount invested, I'd rather own a fraction of a strong business like Nvidia than thousands of shares of a failing one trading over the counter for pennies. The Foolish Bottom Line Nvidia has been a mainstay on Stock Advisor 's Foundational Stocks list since 2022 and is likely to remain a Fool favorite for years to come. If you don't own shares directly, know that almost $8 out of every $100 invested in an S&P index fund is tied to Nvidia, its largest weight today. And those who have followed our recommendation for years might own more than enough already, which shifts the question of whether to buy to when to pare down an oversize position in the years ahead. (That's how I'm thinking through the 70x gains on the first block of shares I bought in 2017.) As I wrote above, there's no guarantee Nvidia will continue to be the market darling it has been for so long. But if there's one idea I would take to the bank -- one premise I'm nearly certain about -- it's that Nvidia isn't done teaching Fools lessons about long-term thinking that will pay dividends across all the other investments we consider on our investing journeys. If you haven't held Nvidia since 2005, it's not too late to collect a small slice of one of the highest-quality businesses in the world. And if you have... take that victory lap. You've earned it. Further Reading A Motley Fool Co-Founder's Roller-Coaster Nvidia Story by David Gardner, 1/29/2024 * When Hunting for Outliers Makes All the Difference by Loren Horst, 8/25/2023 * The Best Problem to Have by Loren Horst, 3/10/2020 * The Agony of High Returns by Morgan Housel, 2/9/2016 David's Top Pick: Nvidia by David Gardner, 4/15/2005 *Accessible to Motley Fool Stock Advisor members. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Loren Horst has positions in Amazon, Nvidia, Shopify, and The Trade Desk. The Motley Fool has positions in and recommends Amazon, Apple, Booking Holdings, FedEx, Microsoft, Netflix, Nvidia, Shopify, and The Trade Desk. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
2 hours ago
- Globe and Mail
Should You Buy Nvidia Stock Before Aug. 27? Here's What the Evidence Suggests.
Key Points After more than two years of phenomenal gains, investors are wary about the future of AI. Nvidia's GPUs are a staple in the AI revolution, and sales continue at a brisk pace. There's a growing body of evidence that suggests Nvidia's epic run will continue, as will the stocks volatility. 10 stocks we like better than Nvidia › The dawn of artificial intelligence (AI) in late 2022 has had a profound impact on the technology landscape. The initial fervor has since died down, and investors are looking for compelling evidence that the adoption of AI has room to run. Nvidia (NASDAQ: NVDA) graphics processing units (GPUs) were widely adopted and have become the gold standard for generative AI. The company is scheduled to release the results of its fiscal 2026 second quarter after the market closes on Wednesday, Aug. 27, and Wall Street and shareholders alike will be sitting on the edge of their seats looking for clues that strong demand for AI chips continues. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Let's look at the company's most recent results, what current events suggest about the future, and determine if Nvidia stock still represents a compelling opportunity heading into the company's highly anticipated financial report. Remarkable results After generating triple-digit revenue and profit growth for two consecutive fiscal years, growth inevitably slowed, and investors got the jitters. Despite tough year-over-year comps, Nvidia's results were still enviable. For its fiscal 2026 first quarter (ended April 27), Nvidia reported record revenue of $44.1 billion, which soared 69% year over year and 12% sequentially. This resulted in adjusted earnings per share (EPS) of $0.81, up 33%, but there's an asterisk on those numbers. Nvidia took a $4.5 billion writedown on H20 chips destined for China, because of the Trump administration's moratorium on AI chip sales in that country (which has since been lifted). Without that charge, EPS would have been $0.96, a 57% increase. Make no mistake: It was the continuing adoption of AI that drove the robust results, as revenue from Nvidia's data center segment climbed 73% to $39 billion, representing 89% of its total revenue. Management expects Nvidia's growth spurt to continue, albeit at a more moderate pace. For its fiscal 2026 second quarter (ended July 27), management is guiding for revenue of $45 billion, which would represent year-over-year growth of 50%. Wall Street is equally bullish, with analysts' consensus estimates calling for revenue of $45.68 billion and adjusted EPS of $1.00. While this would represent a minor slowing compared with last quarter's robust growth, it would still be remarkable nonetheless. Same customers, expanding opportunity The biggest concern among Nvidia investors is that the adoption of AI will hit a wall, but there's simply no evidence to back that assertion. In fact, all the available evidence suggests the proliferation of AI continues. Amazon Web Services, Microsoft Azure, and Alphabet 's Google Cloud, are collectively known as the "Big Three" in cloud computing, and each has recently revealed plans to increase infrastructure spending this year, beyond the already robust spending that was previously announced. Furthermore, most of that spending will be allocated to additional data centers to support the growing demand for AI -- most of which will run on Nvidia GPUs. In addition, Meta Platforms also announced that it was increasing its capital expenditure spending plans for the year. The totals are enlightening: Amazon: $118 billion, up from $100 billion. Microsoft: $100 billion, up from $80 billion. Alphabet: $85 billion, up from $75 billion. Meta: $69 billion, up from $62.5 billion. It's no coincidence that these four companies are also Nvidia's biggest customers. Add to that the resumption of H20 chip sales and China, and it appears clear that Nvidia's AI opportunity continues to expand. Should you buy the stock before Aug. 27? To be clear, I expect Nvidia stock to remain volatile, driven by the inevitable ebbs and flows of AI spending. That said, its success thus far has been undeniable. Over the past three years, the stock has gained 882% (as of this writing) but has also fallen as much as 37% -- so it isn't for the faint of heart. This helps illustrate one of the hallmarks of investing success: Treat buying stocks as partial ownership in a business, own stocks in the best companies out there, and commit to holding for at least three to five years. That takes us back to the main question: Should you buy Nvidia stock before Aug. 27? The unspoken question here is whether Nvidia stock will be up or down following the release of its highly anticipated quarterly report. Truth be told, I have no idea, nor does anyone else for that matter. My crystal ball has been on the blink for some time, but if I were in the mood to prognosticate, I would feel comfortable making several very vague predictions: Nvidia will announce yet another in a long and growing series of quarterly revenue records. Given the company's track record of exceeding expectations, I suspect it will beat analysts' consensus estimates, which are calling for sales of $45.68 billion -- which is slightly ahead of management's guidance of $45 billion -- and adjusted EPS of $1.00. Beyond that, it's anyone's guess, and my predictions could be way off base. That said, I'm still extremely confident that my investing thesis for Nvidia remains intact. The company's cutting-edge GPUs are still the gold standard, driving the AI revolution, and rivals have yet to challenge its position as the undisputed market leader or come up with a superior product. The specter of competition remains, as there's always the possibility that a technological innovation could steal Nvidia's thunder. Most experts agree that it's still early innings for AI, but there's no consensus about the size of the market. Even the most conservative estimates start at $1 trillion. Big Four accounting firm PwC estimates the total economic impact at $15.7 trillion between now and 2030. The truth is nobody knows for sure. Nvidia stock is currently selling for roughly 30 times next year's earnings. However, that premium is backed by the company's track record of innovation, industry-leading position, and history of growth. This underpins my confidence that the runway ahead is long. For those who believe that the AI revolution will play out over the next decade and Nvidia will maintain its position as the leading provider of AI chips, the answer is clear. We don't know what the stock will do between now and Aug. 27 and for long-term investors, that doesn't matter. We'll simply buckle up for the bumpy (and profitable) ride ahead. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025
Globe and Mail
3 hours ago
- Globe and Mail
Palomar (PLMR) Q2 Revenue Jumps 55%
Key Points Non-GAAP EPS reached $1.76 in Q2 2025, beating non-GAAP analyst estimates and This figure represents a 40.8% increase compared to Q2 2024. GAAP revenue totaled $203.3 million in Q2 2025, This was up 55.1% year over year. Palomar raised its full-year adjusted net income guidance for 2025 and continued to diversify beyond its core earthquake insurance segment. These 10 stocks could mint the next wave of millionaires › Palomar (NASDAQ:PLMR), a specialty property insurance provider known for its focus on niche markets such as earthquake and specialty lines, announced its Q2 2025 results on August 4, 2025. The most important headline: Palomar delivered better-than-expected non-GAAP earnings per share and raised its outlook for adjusted net income for 2025. Non-GAAP earnings per share came in at $1.76, ahead of the $1.67 non-GAAP analyst estimate, while GAAP revenue was reported as $203.3 million. Net earned premiums, a core insurance metric, climbed 47.2% year-over-year (GAAP). Overall, the period was marked by solid organic growth across key business lines, increases in profitability, and tangible progress on Palomar's diversification initiatives. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (Non-GAAP) $1.76 $1.67 $1.25 40.8 % Revenue (GAAP) $203.3 million N/A $131.1 million 55.1 % Net Earned Premiums $180.0 million $122.3 million 47.2 % Adjusted Combined Ratio 73.1 % 73.1 % 0.0 % Annualized Adjusted Return on Equity 23.7 % 24.7 % (1.0) pp Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Palomar's Business and Growth Focus Palomar's core business centers on specialty property and casualty insurance for underserved risk categories. It holds a prominent position in earthquake insurance in California, is growing rapidly in casualty, with gross written premium for casualty increasing 113% year-over-year, and also serves markets like inland marine, fronting, and crop insurance. Its competitive edge comes from using advanced technology platforms and proprietary analytics for underwriting and pricing, allowing for speed and flexibility. In recent years, Palomar has prioritized diversification. It is broadening its insurance offerings outside earthquake coverage, focusing on product expansion, geographic reach, and customer mix. These moves aim to reduce its reliance on any single risk type or region. Key success factors include disciplined risk management, strong reinsurance programs, and investments in operational technology. Quarter in Detail: Revenue Growth, Segment Trends, and Profitability Drivers Palomar saw a notable increase in business activity. Net earned premiums (GAAP) increased from $122.3 million in Q2 2024 to $180.0 million, reflecting expansion across product lines. Growth in premiums written was strongest in the casualty segment, which surged 118.8% to $128.2 million and The casualty segment now composes over a quarter of total gross written premium. Inland marine and property lines gross written premiums grew 28.4%. Crop insurance posted impressive gains, with gross written premium rising from $2.2 million to $39.5 million year over year. Conversely, the fronting segment, previously a larger contributor, declined 36.5% as expected due to the wind-down of a major partnership. The diversification strategy was evident in the quarterly mix: earthquake made up 29.8% of gross written premiums (down from 35.1% in Q2 2024), while no single line exceeded that share. Geographically, California exposure was 33.0% of gross written premium, further highlighting Palomar's broader portfolio. This balance limits concentration risk and reflects a shift toward markets with higher growth potential. Key profitability metrics also improved. The adjusted combined ratio (non-GAAP), which measures claims and expenses as a percentage of premiums earned, remained stable at 73.1%. The combined ratio excluding catastrophe losses ticked up, and upfront expense recognition related to crop business expansion. Loss ratios, which show claims costs compared to premiums, rose modestly from 24.9% in Q2 2024 to 25.7%, while the catastrophe loss ratio (non-GAAP) dropped to zero, signaling an absence of major insured events this period. The expense ratio (GAAP) improved, falling to 53.1% from 54.2% compared to Q2 2024. Earthquake insurance, Palomar's original specialty, recorded slower but steady growth, with management expecting mid- to high-teens gross written premium growth for FY2025. Thanks to investments in new talent and acquisitions like Advanced AgProtection. Notably, the fronting business is in runoff and becoming less significant for the company's outlook. On the finance side, net investment income rose 68.0% year over year, benefiting from higher yields and a bigger asset base, while annualized adjusted return on equity (non-GAAP) was 23.7%. Strategic Initiatives and Risk Management Execution During the period, Palomar made progress on several strategic initiatives. Specialty insurance markets like earthquake remain core to its identity, but expansion in casualty, crop, and inland marine has reshaped its revenue balance. The acquisition of Advanced AgProtection expanded the crop business's geographic reach and distribution footprint. Meanwhile, the planned runoff of the fronting segment, particularly following the termination of larger partnerships, continued as forecast and should have less impact after the next quarter. The company also executed a successful renewal of its reinsurance program at an adjusted rate decrease of approximately 10% year-over-year. Reinsurance is a form of insurance for insurers, letting Palomar limit its exposure to large, unpredictable events like natural disasters. The structure of its catastrophe bond placements and reinsurance treaties has further reduced volatility, as evidenced by the minimal catastrophe losses this quarter. Investment in technology and analytics was again highlighted, supporting automation and operational scale. These efforts allow for more targeted underwriting in specialty lines and maintain Palomar's competitive position, though the company is incurring additional costs as it builds out new lines, especially crop. The company does not currently pay a dividend. Looking Ahead: Outlook and Watch Points Management raised its full-year adjusted net income guidance to a range of $198–208 million (non-GAAP) for 2025, up from the prior estimate of $186–200 million (adjusted net income). This new outlook factors in a likely $8–12 million in catastrophe-related losses for the remainder of the year, as well as the expected seasonal effects from crop insurance operations. Overall, the company expects the combined ratio to be in the mid-to-upper 70% range. Investors should monitor several evolving trends and risks. These include sustained growth in casualty and crop gross written premiums, ongoing reduction in the fronting segment, expense levels tied to scaling new lines, the attritional loss ratio as business mix changes, and potential shifts in reinsurance market conditions. Analysts will look to see—especially as the company adapts to changing competitive pressures. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,019%* — a market-crushing outperformance compared to 178% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025
