What happened?

Shares of specialty insurance provider Palomar Holdings (NASDAQ: PLMR) jumped 5.3% in the afternoon session after the company reported third-quarter 2026 adjusted earnings per share above analyst estimates. 

According to a company press release, Palomar Holdings reported adjusted net income of $81.3 million, or $3.01 per diluted share. Adjusted earnings per share was 46 cents above the analyst consensus estimate of $2.55 per share. Net income was $65.3 million, or $2.42 per diluted share, and gross written premiums rose 28.4% year on year to $767.0 million. Revenue increased 58% year on year to $386.6 million, which was above analyst estimates of $356.7 million.

After the initial pop, the shares cooled down to $150.79, up 4.7% from the previous close.

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What is the market telling us

Palomar Holdings’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 9.9% on the news that its fourth-quarter 2025 earnings report revealed weaker-than-expected underwriting results, which overshadowed strong top- and bottom-line beats. The company reported that revenue grew 62.7% year over year to $253.4 million, while adjusted earnings per share of $2.24 topped analyst estimates by 7.1%. However, investors focused on the insurer's core profitability. Palomar's combined ratio—a key measure of underwriting efficiency where a lower number is better—came in at 76.8%. While this was in line with the same quarter last year, it missed Wall Street’s expectations by 2.06 percentage points. The miss suggested underwriting profitability was not as strong as anticipated, prompting a negative reaction from the market despite the headline beats.

Palomar Holdings is up 14.4% since the beginning of the year, and at $150.79 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Palomar Holdings’s shares 5 years ago would now be looking at an investment worth $1,587.

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