AMERISAFE, Inc. (AMSF) - Due Diligence

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53NeutralDD: Sep 02, 2026Analyst: 69

paidPrice at analysis date

USD 25.9 (02/09/2026)

domainMkt cap

$480.8M

pie_chartShares

18.52M

candlestick_chart52W

$25.63-$47.86

trending_downShort interest

3.70%

INFONASDAQFinancials370 employeesFounded 1985

Verdict: Moderately Attractive - Quality reset, limited mispricing

AMSF was selected by the FATTORIALE screen as a QUALITY candidate: no financial debt, high recent ROE, low short interest, active capital return and a sub-$500M market cap after a sharp 52-week drawdown. The independent valuation is constructive but not aggressive: Q2 2026 premium growth was strong, while the combined ratio deterioration and lower operating EPS keep the base fair value close to current public-company insurance multiples.

DIANALITICS RESEARCH INDEX

Score /100 - updated 2026-09-02

AMERISAFE, Inc. (AMSF)

Financials / Specialty workers' compensation insurance

Balance-sheet quality and capital discipline are strong, but the underwriting margin trend and limited base-case upside keep the rating below the strong-opportunity band.

Fin. strength

/20 pts

EBITDA/FCF

/15 pts

Debt/leverage

/15 pts

Stage/business

/15 pts

Catalysts

/10 pts

Reg. risk

/8 pts

Risk/reward

/7 pts

Management

/5 pts

Sector/macro

/3 pts

Compliance

/2 pts

FATT / QUALITY Debt-free insurer ROE 18.1% H1 2026 Combined-ratio pressure

Fair value decomposition

Fair value base case

USD 28.9

Range: USD 22.0-USD 36.0

Price at analysis date: USD 25.9 (02/09/2026)

Base upside/downside: +11%

Multiples were derived from P&C/worker-comp peers: EIG, SAFT and UFCS imply a P/B range of roughly 1.0-1.7x, with AMSF already at about 1.9x because its ROE is materially higher. The component bridge implies 2.14x book, 14.8x FY2026E EPS and 8.9% upside before dividends. Sensitivity is high to underwriting quality: a 2-point combined-ratio miss would reduce normalized underwriting value by roughly $1.20-$1.60 per share. Not investment advice.

Component	Assumption	USD/share
Normalized underwriting earnings	$22.8M after-tax underwriting profit x 11.0x earnings multiple / 18.52M shares	+13.54
Investment income earnings stream	$26.5M normalized pre-tax investment income x 80% after-tax conversion x 13.0x multiple / 18.52M shares	+14.89
Special dividend option	35% probability x $65M excess-capital distribution capacity / 18.52M shares	+1.23
Buyback accretion	70% probability x $7.3M remaining repurchase authorization / 18.52M shares	+0.28
Q2 loss-ratio reserve	-$18.5M reserve for weaker prior-year development and 95.4% Q2 combined ratio / 18.52M shares	-1.00
Liquidity and small-cap discount	-$0.04/sh rounding and trading-liquidity reserve below $500M market cap	-0.04
FV base case	Exact sum: 13.54 + 14.89 + 1.23 + 0.28 - 1.00 - 0.04 = $28.90	28.90

Bull

$34-$36

Probability: 25%

Premium growth stays high-single-digit, Q3/Q4 combined ratio returns near 91-92%, buybacks continue near the 52-week low and the market capitalizes AMSF closer to the analyst target band.

Base

$28-$30

Probability: 50%

Net premiums keep growing, investment income is stable, but underwriting margin recovers only partly from Q2. Capital return supports per-share value without requiring a major re-rating.

Bear

$22-$24

Probability: 25%

Loss severity and expense pressure persist, operating EPS trends closer to the low end of FY2026 estimates and the stock trades back toward 1.6-1.8x book value.

Methodology: Multiples were derived from P&C/worker-comp peers: EIG, SAFT and UFCS imply a P/B range of roughly 1.0-1.7x, with AMSF already at about 1.9x because its ROE is materially higher. The component bridge implies 2.14x book, 14.8x FY2026E EPS and 8.9% upside before dividends. Sensitivity is high to underwriting quality: a 2-point combined-ratio miss would reduce normalized underwriting value by roughly $1.20-$1.60 per share. Not investment advice. Not investment advice.

warning

Main caution - underwriting quality weakened in Q2

Q2 2026 net premiums earned rose 11.4% year over year, but the net combined ratio worsened to 95.4% from 91.7%, and operating EPS missed consensus. The stock can re-rate only if reserve development, loss severity and expense ratios stabilize over the next two reporting windows.

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Positive catalyst - capital return remains active at the lows

AMSF repurchased $5.6M of stock in Q2 2026, had $7.3M remaining under the authorization at June 30, 2026, and declared a $0.41 quarterly dividend payable September 25, 2026. This matters because the stock is trading near the bottom of its 52-week range.

Capital Structure - Short Interest - Buyback & Dilution

Short Interest

3.7%

685,502 shares short at the Aug. 14, 2026 settlement, equal to about 3.70% of shares outstanding and 3.77% of float; days to cover about 1.4-2.0.

Share dilution (1Y)

-1.1%

Shares outstanding fell to about 18.52M; repurchases offset equity compensation and reduced the share count year over year.

Buyback

$7.3M

AMSF repurchased $9.7M in H1 2026, including $5.6M in Q2; $7.3M remained authorized at June 30, 2026.

Short Interest - context

AMSF - 3.7%

3.7%

Short interest is low, so the setup is not a squeeze thesis. It is a quality/value reset where shareholder yield, no financial debt and premium growth must offset investor concern over Q2 underwriting quality. Insider Form 4 review did not surface any 2026 insider sales above $500K; small former-CFO sales in late 2025 were well below that threshold.

$Financial analysis - FY

TTM revenue

$335.7M

+9.5% YoY; premium growth recovered

TTM net income

$47.0M

-6.8% YoY; margin pressure

Q2 combined ratio

95.4%

+370 bps vs Q2 2025

Investment portfolio

$770.7M

cash + investments at Jun. 30

Item	FY2023	FY2024	FY2025	TTM Jun-26	Guidance / estimate 2026
Total revenue	$306.9M	$309.0M	$317.3M	$335.7M	~$341.7M consensus
Net premiums earned	$267.1M	$270.6M	$283.1M	~$307.1M run-rate	H1 2026 +10.2% YoY
Net income	$62.1M	$55.4M	$47.1M	$47.0M	FY2026E EPS ~$1.95-$1.97
Diluted EPS	$3.23	$2.89	$2.47	$2.48	Estimates imply lower operating EPS
Book value / share	N/D	$13.51	$13.39	$13.49	Depends on special dividend timing
Net combined ratio	N/D	88.7%	91.3%	94.3% H1	Q3 reserve trend is key

N/D means the data point was not available in the source set used for this report or is not meaningful for an insurer in that period.

Quarterly dynamics - last 5 quarters
Metric	Q2 2025	Q3 2025	Q4 2025	Q1 2026	Q2 2026
Net premiums earned ($M)	69.4	71.2	73.6	75.1	77.3
Gross margin / combined ratio %	91.7%	90.6%	93.6%	93.2%	95.4%
Net income / loss ($M)	14.0	13.8	10.4	8.1	14.6
Cash EOP ($M)	N/D	N/D	61.9	N/D	65.5

Financial position and sustainability

H1 premium growth

+10.2%

Q2 combined ratio

95.4%

Financial debt

account_tree

Business model - specialty workers' compensation

Hazardous-industry workers' compensation with investment-income support

AMERISAFE writes workers' compensation insurance for small and mid-sized employers in higher-hazard industries such as construction, trucking, agriculture, manufacturing, logging and maritime. The model is mature and capital intensive: value is created through disciplined underwriting, claim reserving, premium retention, investment portfolio yield and recurring capital return. This is not a hyper-growth story; the key question is whether the current market price overreacted to a loss-ratio reset.

Workers' compensation underwriting ~$307M annualized net premiums earned from Q2 2026 run-rate profitable The core engine. Premiums are growing again, but underwriting value depends on keeping the combined ratio below the mid-90s through pricing and reserve discipline. Investment portfolio $770.7M carrying value including cash at Jun. 30, 2026 income anchor Municipal and fixed-income investments plus cash provide a recurring earnings stream. The portfolio is a major part of valuation because there is no financial debt. Capital return program $0.41 quarterly dividend plus $7.3M remaining buyback policy-dependent Regular dividends and buybacks support per-share value. Special dividends are possible historically, but they should be treated as optionality, not a base-case certainty.

gavel

Legal, regulatory and risk analysis

Loss severity and reserves

High

Q2 2026 benefited from favorable prior-year development, but less than the prior year. A sustained deterioration would hit both earnings and book-value confidence.

Combined-ratio reset

High

The combined ratio moved to 95.4% in Q2. The stock's rerating path depends on proving that this was not the start of a weaker underwriting cycle.

Investment portfolio yield

Moderate

Net investment income was down slightly in Q2 as investable assets declined after dividends and buybacks. Lower reinvestment yields would reduce the earnings floor.

Regulatory and state-market risk

Moderate

Workers' compensation is state-regulated. Rate adequacy, benefit-cost inflation and mandated pooling arrangements can alter underwriting economics.

Balance sheet

Positive

No financial debt, $65.5M cash and a $770.7M cash/investment portfolio lower solvency risk and give management capital-allocation flexibility.

Capital allocation

Positive

Buybacks near the 52-week low can be accretive, and the regular dividend is visible. The main caveat is preserving statutory capital through the cycle.

Analyst target gap

Moderate

The $35.67 average target is well above price, but Truist cut its target to $32 after Q2. Sell-side support is constructive but has been moving lower.

Litigation / governance screen

Low

Searches for current class action, short-seller report and SEC investigation did not surface a material issue. Insider selling above $500K in the last 12 months was not found in the public-source screen.

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SWOT analysis

Strengths

+Debt-free balance sheet and large investment portfolio.
+Specialty workers' compensation niche with long operating history.
+H1 2026 net premiums earned grew 10.2% year over year.
+Active dividend and buyback support per-share value.

Weaknesses

−Net income and EPS have trended down from FY2023 levels.
−Q2 2026 underwriting profit fell sharply year over year.
−Special dividends are discretionary and should not be capitalized fully.
−Small-cap liquidity limits institutional sponsorship.

Opportunities

→Combined-ratio improvement in Q3/Q4 could restore confidence.
→Repurchases below intrinsic value can lift EPS and book value per share.
→Stable investment yield supports income while underwriting resets.
→Analyst average target remains above the independent base FV.

Threats

!Claims inflation or adverse reserve development can erase underwriting profit.
!A weaker labor/construction cycle can reduce premium growth.
!Lower special dividends may disappoint yield-oriented shareholders.
!Further target cuts could keep the multiple compressed.

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Summary by assessment area

Financial risk - Low

The company has no financial debt and enough liquidity to fund normal claims, dividends and modest buybacks.
Book value is not expanding quickly, but solvency risk is low.

Operating risk - Medium

Premium growth is healthy, yet underwriting profitability weakened in Q2.
The next two quarters must show whether reserve pressure is temporary.

Valuation - Modest upside

Base FV of $28.90 implies roughly +11% from the verified price line.
The thesis is quality support plus capital return, not a deep dislocation.

{ "verdict_label": {"it": "Giudizio: Moderatamente attraente", "en": "Verdict: Moderately Attractive"}, "verdict_text": {"it": "AMSF offre qualita di bilancio e capital return, ma il fair value resta vicino ai multipli assicurativi dopo il peggioramento del combined ratio.", "en": "AMSF offers balance-sheet quality and capital return, but fair value stays close to insurance multiples after the combined-ratio reset."}, "bull_points": [ {"it": "Debito finanziario nullo e portafoglio investimenti da circa $770,7M riducono il rischio di bilancio.", "en": "No financial debt and a roughly $770.7M investment portfolio reduce balance-sheet risk."}, {"it": "H1 2026 net premiums earned +10,2% YoY: la crescita del business rimane visibile.", "en": "H1 2026 net premiums earned grew 10.2% YoY, keeping business growth visible."}, {"it": "Buyback e dividendo regolare sostengono il valore per azione vicino ai minimi a 52 settimane.", "en": "Buybacks and the regular dividend support per-share value near the 52-week low."} ], "bear_points": [ {"it": "Q2 2026 combined ratio al 95,4%, in peggioramento rispetto al 91,7% dell'anno precedente.", "en": "Q2 2026 combined ratio was 95.4%, worse than 91.7% a year earlier."}, {"it": "Il target Truist e stato tagliato a $32 dopo Q2, segnalando cautela sell-side.", "en": "Truist cut its target to $32 after Q2, showing sell-side caution."}, {"it": "L'upside base e solo moderato: FV $28,90 contro prezzo verificato $25,94.", "en": "Base upside is only moderate: $28.90 FV versus the $25.94 verified price."} ], "risks": [ {"it": "Rischio chiave: loss severity e reserve development possono erodere underwriting profit.", "en": "Key risk: loss severity and reserve development can erode underwriting profit."}, {"it": "Dividendi speciali e buyback dipendono dalla conservazione del capitale statutario.", "en": "Special dividends and buybacks depend on statutory capital preservation."}, {"it": "Ulteriori miss EPS potrebbero riportare il titolo verso 1,6-1,8x book value.", "en": "Further EPS misses could push the stock back toward 1.6-1.8x book value."} ] }

Sources & Disclaimer

Sources: StockAnalysis dedicated current-price and statistics pages; Investing.com historical data page; MarketBeat daily quote chart, short-interest, competitors and dividend pages; AMERISAFE Q2 2026 results release dated July 21, 2026; AMERISAFE Q1 2026, Q3 2025, Q4 2025 and FY2025 result releases; SEC Form 10-Q for the quarter ended June 30, 2026 and Form 10-K for FY2025; StockAnalysis forecast page and Investing.com consensus page for analyst targets; Barchart and public earnings-calendar snippets for the next reporting estimate. Market data used: AMSF price $25.94 at the Sep. 1, 2026 close; market cap about $480.8M-$482.4M; 52-week range about $25.63-$47.86; shares outstanding about 18.52M. Price sanity check: $25.94 x 18.52M shares = about $480.4M, consistent with reported market cap. Short interest: 685,502 shares, 3.70% of shares outstanding / 3.77% of float, Aug. 14, 2026 settlement. This document is for informational purposes only and does not constitute financial or investment advice.