What Happened?
Shares of specialty insurance provider Skyward Specialty Insurance (NASDAQ: SKWD) jumped 4.5% in the morning session after the company reported strong third-quarter 2025 financial results that surpassed expectations for both earnings and revenue. Skyward Specialty announced adjusted earnings of $1.05 per share, comfortably beating analyst estimates of $0.89. The company's revenue for the quarter also impressed, coming in at $382.5 million, which was 14.3% above Wall Street's expectations. A key driver of this growth was a 30.5% year-over-year jump in net premiums earned, reaching $351.8 million. This figure reflects the income from insurance policies after accounting for reinsurance. The company also demonstrated strong profitability in its core operations, reporting a combined ratio of 89.2%. A combined ratio below 100% indicates an underwriting profit, and Skyward's result was better than the 90.9% analysts had anticipated.
After the initial pop the shares cooled down to $46.63, up 3.7% from previous close.
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What Is The Market Telling Us
Skyward Specialty Insurance’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 5.7% on the news that the company announced a definitive agreement to acquire Lloyd’s specialist, Apollo Group Holdings Limited, for a total consideration of $555 million. The deal, consisting of $371 million in cash and $184 million in stock, is expected to significantly benefit Skyward's financial performance. The company projects the acquisition will deliver double-digit adjusted operating earnings per share (EPS) accretion in the first full year after closing and add over $1.5 billion in managed premium. Strategically, the move provides Skyward with a strong source of inorganic growth and diversification into the Lloyd's market, opening up new specialty business areas. Following the news, JMP Securities reiterated its 'Market Outperform' rating and raised its price target on the stock from $65 to $70, signaling confidence in the company's prospects.
Skyward Specialty Insurance is down 4.9% since the beginning of the year, and at $46.63 per share, it is trading 28.3% below its 52-week high of $65 from June 2025. Investors who bought $1,000 worth of Skyward Specialty Insurance’s shares at the IPO in January 2023 would now be looking at an investment worth $2,441.
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