Highlights

  • One-year basic EPS growth is 35.96%, with a P/E of 14.04 and PEG of 0.00.
  • Second quarter net income was $49,038 thousand, against $38,839 thousand a year earlier.
  • The combined ratio was 89.5% in the second quarter, against 89.4%.
  • The Board raised the share repurchase authorization to $100.0 million on July 15.

Growth, P/E and PEG sit side by side at Skyward Specialty (NASDAQ:SKWD), an undervalued growth stock: basic earnings per share grew 35.96% over one year, the trailing twelve-month P/E ratio is 14.04 and the PEG ratio, on an expected basis, is 0.00, with shares trading at USD 58.47 on October 28, 2026, down 0.21%. In its latest disclosures, the specialty insurer completed its acquisition of Apollo Group Holdings on January 1, repaid $50.0 million of its Tranche A term loan on June 26, raised its share repurchase authorization on July 15, and reported second quarter 2026 net income of $49,038 thousand in a Form 10-Q filed in August.

Based in Houston, Texas, Skyward Specialty Insurance Group is a Delaware corporation organized in 2006. The insurance holding company offers commercial property and casualty insurance and reinsurance through two reportable segments: Skyward Specialty, which has nine underwriting divisions, and Apollo, a Lloyd's of London specialist group whose managing agency services nine syndicates. It owns four insurance company subsidiaries in the United States and a captive reinsurer domiciled in the Cayman Islands.

Growth: Second Quarter Earnings, Premiums and Combined Ratio

Net income was $49,038 thousand in the second quarter against $38,839 thousand a year earlier, and $98,769 thousand for the six months against $80,897 thousand. Basic earnings per share were $1.10 against $0.96, and diluted earnings per share were $1.07 against $0.93. Total revenues were $489,533 thousand against $319,903 thousand.

Gross written premiums were $740,554 thousand against $584,914 thousand, and net earned premiums were $444,472 thousand against $295,542 thousand. The Apollo segment wrote $72,781 thousand of gross premiums, with no prior-year comparison because the acquisition closed on January 1, 2026. Underwriting income, a non-GAAP measure, was $54,810 thousand against $31,244 thousand, and operating income, also non-GAAP, was $59,198 thousand against $37,496 thousand.

The combined ratio was 89.5% against 89.4%, with a net loss and LAE ratio of 62.3% against 61.3% and a net expense ratio of 27.2% against 28.1%.

Valuation: P/E of 14.04, PEG of 0.00 and Returns on Equity

The P/E ratio of 14.04 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on expected growth. Annualized return on equity was 15.7% in the second quarter against 17.7%, and 17.3% for the six months against 19.1%. Annualized operating return on equity, a non-GAAP measure, was 19.0% against 17.1%. Stockholders' equity was $1,267,537 thousand at June 30, 2026, against $1,009,565 thousand at December 31, 2025.

On the August 5, 2026 earnings call, Chairman and Chief Executive Officer Andrew Robinson said the company regards share repurchases as an attractive use of capital given its returns, earnings growth and current valuation.

Capital Returns, Debt and Liquidity

Under the program approved in October 2024 for up to $50.0 million, the company repurchased 222,635 shares for approximately $9.7 million in the second quarter. On July 15, 2026, the Board authorized an additional $50.0 million, bringing the total authorization to $100.0 million. The program may be modified, suspended or terminated at any time.

Notes payable were $417,620 thousand at June 30, 2026, and subordinated debt was $19,585 thousand. The Term Loan Facility consists of two $150.0 million tranches drawn on December 30, 2025 to fund the Apollo acquisition; Tranche A matures January 1, 2028 and Tranche B matures July 2, 2029. The company repaid $50.0 million of Tranche A on June 26, 2026. The Revolving Credit Facility of up to $250.0 million had $114,500 thousand drawn, and the company stated it was in compliance with all covenants.

Cash and cash equivalents were $219,221 thousand. Net cash provided by operating activities was $184,167 thousand for the six months against $184,940 thousand.

Disclosed Risks and Outlook

The company attributed the higher second quarter loss ratios to catastrophe losses, primarily convective storms, and to a business mix shift toward the accident and health and global agriculture divisions, which generally have higher loss ratios. Catastrophe loss and LAE was $8,600 thousand against $4,000 thousand. Interest expense was $8,812 thousand against $1,876 thousand, and amortization expense was $8,843 thousand against $372 thousand. Gross written premiums in Global Property were $71,109 thousand against $83,992 thousand, and in Energy Solutions $62,690 thousand against $74,822 thousand.

The company excluded Apollo from its evaluation of disclosure controls and internal control over financial reporting, with integration of Apollo's controls planned for completion during 2026.

The filing contains no earnings guidance. On the second quarter call, Robinson said market conditions remain more challenging in property, both global and E&S, and in miscellaneous professional, and that the company prioritizes underwriting profitability over volume. Chief Financial Officer Mark Haushill said the company is moving toward a target debt-to-capital ratio in the low 20s.