Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 24 Sept 2026
ACGL· Financial Services
Arch Capital Group
Arch Capital Group's 15.6% ROIC and 18.29% owner earnings yield signal a strong moat and compelling valuation.
Buffett fit
Partial fit
Owner
57
Durability
84
Management
85
Price
100
Score updated 22 Oct 2026 · analysis from 24 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of Arch Capital Group, we'd focus on maintaining its strong of 15.6% and leveraging its 18.29% yield.
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Arch Capital's 5-year EPS CAGR of 22.03% and consistent profitability suggest durability.
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Management has effectively reduced the share count by 1.48% CAGR over 5 years, with a yield of 2.23%.
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With an yield of 18.29% and a of 6.9, Arch Capital is attractively priced.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
8- 1 of 15.6% is top-quintile in its sector.
- 2 yield of 18.29% indicates strong cash generation.
- 3 ratio of 6.9 suggests undervaluation relative to earnings.
- 4Net margin of 24.7% underscores efficient operations.
Concerns
8- 1 of 42.8% is below sector top-quintile.
- 2 of 27.6% lags behind sector leaders.
- 3Current ratio of 0.68 suggests potential short-term liquidity constraints.
- 4 YoY growth of -7.46% indicates recent cash flow pressure.
Price history
$100+132.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Arch Capital Group provides a diversified range of insurance and reinsurance products, including mortgage insurance. The company operates globally, with a strong focus on casualty, marine, and aviation insurance. Its revenue mix includes primary and excess casualty coverages and various liability insurances. With a net margin of 24.7%, the company demonstrates solid unit economics, converting a significant portion of its revenue into profit.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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