It has been about a month since the last earnings report for Axis Capital (AXS). Shares have lost about 4.6% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Axis Capital due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Axis Capital Holdings Limited before we dive into how investors and analysts have reacted as of late.
AXIS Capital Q1 Earnings Beat Estimates on Solid Underwriting Income
AXIS Capital Holdings Limited reported first-quarter 2026 operating income of $3.42 per share, which outpaced the Zacks Consensus Estimate of $3.23 and rose 7.9% year over year. The quarterly results benefited from higher net premiums earned and stronger underwriting income, partly offset by lower net investment income and higher expenses.
AXS’s Quarterly Operational Update
Total operating revenues of $1.7 billion marginally beat the Zacks Consensus Estimate by 0.4%. The top line rose nearly 7.7% year over year on higher premiums earned. Net premiums written increased 9% to $1.9 billion, driven by a 24% rise in the Insurance segment, partially offset by a 13% decline in the Reinsurance segment. Net investment income decreased 11.1% year over year to $184.7 million, due to lower income from cash. The Zacks Consensus Estimate was pegged at $225.1 million.
Total expenses in the quarter increased 3.8% year over year to $1.3 billion due to higher net losses and loss expenses, acquisition costs and reorganization expenses. Our estimate was pegged at $1.4 billion. Pre-tax catastrophe and weather-related losses, net of reinsurance, totaled $48 million, including $33 million from natural catastrophes. The remaining $15 million was attributable to the Middle East conflict.
AXIS Capital’s underwriting income of $187 million increased 15% year over year. The combined ratio improved to 89.8 in the quarter from 90.2 a year ago, reflecting stronger underwriting performance. The Zacks Consensus Estimate was pegged at 93.1. Our estimate was 92.6.
Segment Results
Insurance: Gross premiums written improved 19.8% year over year to $2 billion. Our estimate was $1.8 billion. Net premiums earned increased 23.8% year over year to $1.3 billion, driven by higher gross premiums written and a lower cession rate in liability lines, partly offset by a higher cession rate in property lines. Our estimate was $1.1 billion. Underwriting income of $157.4 million increased 17% year over year. The combined ratio improved 40 basis points to 86.3. The Zacks Consensus Estimate for the combined ratio was pegged at 88.4.
Reinsurance: Gross premiums written decreased 2.2% year over year to $1.1 billion, mainly due to non-renewals and reduced line sizes in liability and motor lines, in line with our estimate of $1.1 billion. Net premiums earned increased 2.4% year over year to $338.7 million, exceeding our estimate of $315.3 million.
Underwriting income of $30 million increased 3.8% year over year. The combined ratio deteriorated 40 basis points, up 92.7%. The Zacks Consensus Estimate for the combined ratio was pegged at 101.
Financial Update
AXIS Capital exited the first quarter with cash and cash equivalents of $862.4 million, up 5.1% from the 2025-end level. Debt was $1.3 billion at quarter-end, unchanged from the 2025 year-end level. Book value per diluted common share was $78.19, up 1.3% from the Dec. 31, 2025, level. An annualized operating ROACE of 17.7% reflected strong capital efficiency despite easing from 19.2% a year ago.
Capital Deployment
AXIS Capital returned $93 million to common shareholders in the quarter, including $60 million in share repurchases and $33 million in dividends.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Axis Capital has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axis Capital has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Axis Capital Holdings Limited (AXS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).