Have you been paying attention to shares of United Fire Group (UFCS)? Shares have been on the move with the stock up 1.6% over the past month. The stock hit a new 52-week high of $56.98 in the previous session. United Fire has gained 53.5% since the start of the year compared to the 3.4% move for the Zacks Finance sector and the 3% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 3, 2026, United Fire reported EPS of $1.3 versus consensus estimate of $0.7.
For the current fiscal year, United Fire is expected to post earnings of $4.97 per share on $1.54 in revenues. This represents a 8.26% change in EPS on a 10.98% change in revenues. For the next fiscal year, the company is expected to earn $5.18 per share on $1.68 in revenues. This represents a year-over-year change of 4.02% and 9.33%, respectively.
Valuation Metrics
United Fire may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
United Fire has a Value Score of A. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 11.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 11X. On a trailing cash flow basis, the stock currently trades at 10.8X versus its peer group's average of 9.9X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making United Fire an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, United Fire currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if United Fire fits the bill. Thus, it seems as though United Fire shares could have potential in the weeks and months to come.
How Does UFCS Stack Up to the Competition?
Shares of UFCS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is HCI Group, Inc. (HCI). HCI has a Zacks Rank of #2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of A.
Earnings were strong last quarter. HCI Group, Inc. beat our consensus estimate by 12.68%, and for the current fiscal year, HCI is expected to post earnings of $21.04 per share on revenue of $980.44 million.
Shares of HCI Group, Inc. have gained 6.8% over the past month, and currently trade at a forward P/E of 9.45X and a P/CF of 8.38X.
The Insurance - Property and Casualty industry is in the top 26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UFCS and HCI, even beyond their own solid fundamental situation.
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United Fire Group, Inc (UFCS): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).