FIDELIS INSURANCE HOLDINGS LIMITED (FIHL): what the price requires

At today's price, FIDELIS INSURANCE HOLDINGS LIMITED (FIHL) is priced for 8.1% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/FIHL

Headline

FieldValue
TickerFIHL
CompanyFIDELIS INSURANCE HOLDINGS LIMITED
Current price$20.72/sh

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed8.1%
Return on equity now4.6%
ROE gap+3.5pp
Price-to-book0.79x

Solve inputs: computed at a 9.2% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~0.8pp.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.40σ
cohort percentile (of 80 peers)8
sustained it ~10 years at this level82%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.47x3justifies
Earnings0.35x2justifies
Relative0.47x3justifies
Growth1.40x2expensive

Families that justify the price: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.

Per-Model Detail (n=10)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$66.160.31xyesTBVPS $24.07 × 2.75x (ROE (TTM) 16.7% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption))
Relative ValuationRelative$31.520.66xyesP/E 8.66x (blended: static sector reference 11x + trailing (TTM) 5x), scenarios: 7.3x / 8.7x / 10.0x (bear / base = reference held flat / bull), EV/EBITDA 10x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$20.151.03xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$43.410.48xyesBV/sh $24.07, ROE (TTM) 16.7%, ke 9.3%
Two-Stage Excess ReturnAsset$57.540.36xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$11.731.77xyesRev $2.5B, growth -3% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$43.680.47xyesEPS $3.64, growth 1% (input: historical EPS growth), PEG=3.53 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$44.400.47xyes√(22.5 × EPS $3.64 × BVPS $24.07) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$117.450.18xyesEPS $3.64 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative$136.500.15xyesEPS $3.64 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$39.350.53xyesEPS $3.64 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (buyback)-5.4%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

The market is pricing Fidelis below the value of its own equity. The stock trades near $21 against book value per diluted share of about $26, even as the company posted a strong 86.6% combined ratio and a 15.2% annualized operating return on equity in Q1 2026.

The fundamentals support the price on the conservative methods. The bank-style tangible-book model, relative valuation, and the excess-return methods all cluster in the $23 to $25 range, above the current price, while the growth-DCF is the lone method calling it expensive.

Q1 2026 EPS of $0.94 beat the $0.77 estimate, and the company is returning capital aggressively, with a $400 million buyback and a $0.15 dividend. The catch is a related-party underwriting structure that complicates the picture.

Bull Case

Begin with what the market is pricing in, then check it against the fundamentals, because the two are out of step. At roughly $21 the stock trades below book value per diluted share of about $26, so the market is valuing Fidelis at around 0.8 times the equity it carries. That is the price the market assigns a company it expects to earn below its cost of capital. The fundamentals say otherwise. Q1 2026 produced a combined ratio of 86.6%, meaning the company kept roughly 13 cents of underwriting profit on every premium dollar before investment income, and an annualized operating return on equity of 15.2%, well above the 9.3% cost of capital. A specialty insurer underwriting at a profit and earning a mid-teens return should not trade at a discount to book.

The earnings beat reinforces the disconnect. Q1 EPS of $0.94 cleared the $0.77 estimate by a wide margin, and the company reported a record quarterly increase in book value per share driven by improved underwriting and capital returns. For an insurer, growing book value per share while buying back stock below book is the cleanest form of value creation: each repurchased share is retired at a discount to its intrinsic worth, lifting the per-share equity of everyone who stays.

The valuation methods that fit a financial agree the price is low. The bank-style tangible-book model lands at $24, relative valuation at $25, the excess-return methods at $23, the earnings-yield method at $23, and the Graham number at $33, all above the current price. Only the growth-DCF, which a specialty insurer's lumpy results suit poorly, says expensive. For a buyer who underwrites the combined ratio and the book-value compounding rather than a smooth growth curve, a profitable insurer trading below book while returning capital is a value-supported setup.

Bear Case

The structure of this company is the reason to hesitate, and it is a governance and capital-allocation question more than a valuation one. Fidelis does not do its own underwriting. All underwriting is outsourced to the separately owned Fidelis MGU, the managing general underwriter, under a rolling ten-year framework agreement signed at the 2023 separation, and that MGU is not consolidated with Fidelis. In plain terms, the entity that sources and binds the risk Fidelis carries on its balance sheet is a related party with its own owners and incentives, compensated through commissions. That arrangement aligns interests in good years and strains them in bad ones, because the MGU is paid to write business while the insurance balance sheet bears the loss if the underwriting turns. A shareholder is trusting a structure, not just a management team, and structures like this are exactly why the market applies a discount that the per-share book-value math does not explain.

Capital allocation deserves the same scrutiny. The company returned $313.7 million to shareholders in 2025, repurchasing about 15.2 million shares for $261.4 million and paying $52.3 million in dividends, and it has since expanded the buyback authorization to $400 million. Buying back stock below book is accretive, but a property-and-specialty insurer returning capital this aggressively is also drawing down the buffer it would need if a major catastrophe year arrives. The business is inherently lumpy, and the discount to book may be the market's way of pricing the tail risk that a single bad season, or an adverse reserve development, can erase several quarters of underwriting gains.

The return profile is also thinner than the Q1 headline suggests. On a trailing basis the return on equity sits at about 9.4%, essentially at the cost of capital, so the 15.2% operating figure reflects a favorable quarter rather than a through-cycle norm. The conservative methods that land above the price all assume the company keeps earning around its cost of capital, and the growth-DCF, the one forward-looking method, says expensive. Sentiment is divided, with a consensus around Hold and a spread of ratings that includes both strong-buy and strong-sell calls, and the average target near $24 implies only modest upside. A below-book insurer with a related-party engine and a catastrophe-exposed balance sheet is the kind of value that can stay cheap because the risks are real, not imagined.

Valuation

Fidelis is a financial, so the read is the return on equity against its cost and the multiple of book the market assigns. On a trailing basis the company earns about 9.4% on equity against a 9.3% cost of capital, essentially breakeven, while Q1 2026 showed a much stronger 15.2% annualized operating return. Book value per diluted share is about $26, and the stock trades near $21, roughly 0.8 times book. The bank-style tangible-book model, adjusted for the modest spread, lands at $24, just above the price.

The other financial-appropriate methods cluster in the same zone. Relative valuation puts it at $25 on a sector P/E near 11x, the simple and two-stage excess-return methods at $23, the earnings-yield method at $23, and the Graham number at $33. The two-stage dividend-discount method is the outlier on the low side at $12, reflecting a modest dividend, and the growth-DCF reads expensive because it cannot handle lumpy insurance earnings well.

The model's reported band is degenerate here, with the low and base both pinned near a token figure and the high implausibly high, so it carries no information and should be ignored; the method cluster is the better guide. On that cluster the stock is modestly cheap, trading below book and below where the conservative financial methods land. The deciding variable is whether the through-cycle return settles closer to the strong Q1 reading or the breakeven trailing figure, and whether the related-party structure and catastrophe exposure justify the persistent discount to book.

Catalysts

Q1 2026, reported in mid-May, was the most recent data point and it beat. EPS of $0.94 cleared the $0.77 estimate, the combined ratio came in at a healthy 86.6%, the annualized operating return on equity reached 15.2%, and book value per diluted share rose to a record near $26. The next print is the test of whether the favorable underwriting holds, since a single catastrophe-heavy quarter can swing a specialty insurer's results sharply.

Capital return is the most active catalyst and the clearest signal of management's view of the discount. The company returned $313.7 million to shareholders in 2025 and has expanded its buyback authorization to $400 million while paying a $0.15 dividend. Continued repurchases below book are accretive, so the pace of buybacks is the thing to watch for closing the gap to book value.

Two structural items round out the picture. The company is moving to rebrand as Pelagos Insurance Capital, and it continues to operate through the non-consolidated Fidelis MGU under the long-term framework agreement, so any change in that relationship would be material. Sentiment is mixed, with a Hold consensus, a wide spread of individual ratings, and an average target near $24 against a current price near $21, implying modest upside if the underwriting and capital-return story stays on track.

Sources: stocktitan.net (2025 results and buyback), investing.com (buyback expansion), fool.com (Q1 2026 transcript), marketbeat.com (FIHL forecast).

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive FIHL report on boothcheck