Specialty insurance company Bowhead Specialty Holdings (NYSE: BOW) announced better-than-expected revenue in Q4 CY2025, with sales up 27.1% year on year to $151.7 million. Its GAAP profit of $0.44 per share was 2.2% below analysts’ consensus estimates.

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Bowhead Chief Executive Officer, Stephen Sills, commented, “Bowhead had a great year in 2025. Gross written premiums grew more than 21% in the fourth quarter, and 24% for the full year. At the start of the year, we expected a low 30s expense ratio for the full year of 2025 but achieved an expense ratio below 30% starting in the third quarter and for the full year of 2025. With these accomplishments, Bowhead’s adjusted net income for the year grew over 30%, adjusted return on equity was 13.6%, and diluted adjusted earnings per share was $1.65.”

Company Overview

Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE: BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.

Revenue Growth

In general, insurance companies earn revenue from three primary sources. The first is the core insurance business itself, often called underwriting and represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Over the last three years, Bowhead Specialty grew its revenue at an incredible 47.1% compounded annual growth rate. Its growth surpassed the average insurance company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within financials, a stretched historical view may miss recent interest rate changes and market returns. Bowhead Specialty’s annualized revenue growth of 39.5% over the last two years is below its three-year trend, but we still think the results suggest healthy demand.

This quarter, Bowhead Specialty reported robust year-on-year revenue growth of 27.1%, and its $151.7 million of revenue topped Wall Street estimates by 6%.

Net premiums earned made up 90.5% of the company’s total revenue during the last three years, meaning Bowhead Specialty lives and dies by its underwriting activities because non-insurance operations barely move the needle.

Our experience and research show the market cares primarily about an insurer’s net premiums earned growth as investment and fee income are considered more susceptible to market volatility and economic cycles.

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Book Value Per Share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

Fortunately for investors, Bowhead Specialty’s BVPS grew at an incredible 30.8% annual clip over the last two years.

Key Takeaways from Bowhead Specialty’s Q4 Results

We were impressed by how significantly Bowhead Specialty blew past analysts’ net premiums earned expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its EPS missed. Overall, this print had some key positives. The stock remained flat at $24.83 immediately after reporting.

Indeed, Bowhead Specialty had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).