Why Is Axis Capital (AXS) Up 0.5% Since Last Earnings Report?

A month has gone by since the last earnings report for Axis Capital (AXS). Shares have added about 0.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Axis Capital due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AXIS Capital Reports Q4 Earnings Growth Despite Higher Expenses

AXIS Capital Holdings Limited reported fourth-quarter 2025 operating income of $3.25 per share, which outpaced the Zacks Consensus Estimate by 9.4% and rose 9.4% year over year. The strong performance was driven by higher net premiums earned and net investment gains, partially offset by higher expenses.

AXS’s Quarterly Operational Update

Total operating revenues of $1.7 billion beat the Zacks Consensus Estimate by 5.2%. The top line rose nearly 9% year over year on higher premiums earned.
Net premiums written rose 13% to $1.4 billion with an increase of 14% in the Insurance segment, and growth of 5% in the Reinsurance segment.

Net investment income decreased 4.5% year over year to $187 million, due to lower income from cash and fixed maturities. The Zacks Consensus Estimate was pegged at $198 million. Our estimate was $215 million.

Total expenses in the quarter increased 16.6% year over year to $1.4 billion due to higher net losses and loss expenses, acquisition costs, general and administrative expenses and foreign exchange losses. Our estimate was pegged at $1.2 billion.

Pre-tax catastrophe and weather-related losses and net of reinsurance were $30 million, including $17 million attributable to Hurricane Melissa and other weather-related events. AXIS Capital’s underwriting income of $184 million increased 42% year over year. The combined ratio improved to 90.4 in the quarter from 94.2 a year ago, reflecting stronger underwriting performance. The Zacks Consensus Estimate was pegged at 91. Our estimate was 91.2.

Segment Results

Insurance: Gross premiums written improved 11.7% year over year to $1.9 billion. Our estimate was $1.8 billion. Net premiums earned increased 13.3% year over year to $1.2 billion. This gain is attributable to most lines of business. Our estimate was $1 billion. Underwriting income of $157.6 million increased 74.2% year over year. The combined ratio improved 470 basis points to 86.5. The Zacks Consensus Estimate for the combined ratio was pegged at 94.

Reinsurance: Gross premiums written increased 13% year over year to $310.7 million, primarily attributable to new business in motor lines, and credit and surety lines, together with premium adjustments in credit and surety lines. Our estimate was $372 million. Net premiums earned increased 4.2% year over year to $365.6 million. Our estimate was $400 million. Underwriting income of $26.6 million decreased 31.9% year over year. The combined ratio deteriorated 300 basis points, up 93.3%. The Zacks Consensus Estimate for the combined ratio was pegged at 103.

Full-Year Highlights

The company reported full-year 2025 operating income of $12.92 per share, which outpaced the Zacks Consensus Estimate by 1.9% and rose 15.6% year over year. Total operating revenues of $6.5 billion beat the Zacks Consensus Estimate by 1.2%. The top line rose 6.7% year over year on higher net investment gains and higher premiums earned.

Net premiums written increased 6% to $6.1 billion, driven by a 9% increase in the Insurance segment, partially offset by a 1% decline in the Reinsurance segment. Underwriting income was $725 million, reflecting a 27% year-over-year increase. The combined ratio improved 250 basis points to 89.8 from 92.3 a year ago.

Financial Update

AXIS Capital exited the fourth quarter with cash and cash equivalents of $820.3 million, down 61.7% from the 2024-end level. Debt was $1.3 billion at quarter-end, up 0.1% from the 2024-end level. Book value per diluted common share was $77.20, up 18.3% from the Dec. 31, 2024, level. An annualized operating ROACE of 18.1% reflected strong capital efficiency despite easing from 18.6% a year ago.

Capital Deployment

AXIS repurchased $888 million of common shares in full-year 2025, underscoring its commitment to reducing share count and enhancing earnings per share. The company also declared and paid a quarterly cash dividend of 44 cents per share, resulting in total annual common share dividends of $139 million for 2025.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 7.92% due to these changes.

VGM Scores

Currently, Axis Capital has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Axis Capital has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Axis Capital is part of the Zacks Insurance - Property and Casualty industry. Over the past month, W.R. Berkley (WRB), a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended December 2025 more than a month ago.

W.R. Berkley reported revenues of $3.72 billion in the last reported quarter, representing a year-over-year change of +5.9%. EPS of $1.13 for the same period compares with $1.13 a year ago.

For the current quarter, W.R. Berkley is expected to post earnings of $1.16 per share, indicating a change of +14.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for W.R. Berkley. Also, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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