ASIC

Ategrity is a pure-play excess & surplus (E&S) specialty insurer targeting SMBs, and the FY2025 numbers are genuinely strong: revenue grew 23.4% to $424M, net income jumped 57.2% to $74M, and the net margin expanded to 17.4%. Operating cash flow of $147M comfortably exceeds reported net income — a healthy quality-of-earnings signal for an insurer. Stockholders' equity grew 54.2% (largely from the June 2025 IPO that raised proceeds from 7.67M new shares), and retained earnings tripled to $109M, showing real compounding rather than purely paper-driven book growth. The 'productionized underwriting' model — micro-segmentation, automated workflows for high-volume small-premium policies — is a credible structural edge in a niche where speed and consistency matter to brokers.

Valuation at 13.5x trailing P/E and 2.4x sales is not demanding for a 23%-growth specialty insurer earning a 17% net margin, especially with leverage (liabilities/equity 1.40x) that is modest for the industry. The MD&A confirms diversified state exposure (top-5 states sum to ~59% of GWP, with California 18.9% the largest), and operating across 48 states plus DC limits single-jurisdiction risk. ROE of 12.0% is decent but understated by the mid-year equity raise — run-rate ROE on a more normalized base is likely materially higher.