What's Driving Allstate Corp's Surprising 32% Stock Rally?

Allstate Corp (ALL, Financial) has recently experienced a notable uptick in its stock performance. With a current market capitalization of $37.56 billion, the stock price stands at $143.54. Over the past week, Allstate has seen a 1.19% gain, while the past three months have been particularly impressive, with a 32.05% gain. This surge has brought the company's valuation from being significantly undervalued to fairly valued, according to the GF Value, which now stands at $158.98, up from the past GF Value of $157.36.

Introduction to Allstate Corp

Allstate Corp, a titan in the insurance industry, is a leading U.S. property and casualty insurer. The company boasts a diverse portfolio of insurance products, including its flagship personal auto insurance. Allstate's products are distributed across North America, primarily through a network of approximately 10,000 company agencies. This extensive reach has solidified Allstate's position as a key player in the insurance sector. 1734231757743517696.png

Assessing Allstate's Profitability

When it comes to profitability, Allstate holds a Profitability Rank of 6/10. The company's Return on Equity (ROE) is currently at -11.94%, which, despite being negative, is better than 8.26% of the industry. Similarly, Allstate's Return on Assets (ROA) stands at -1.99%, surpassing 8.59% of its peers. The Return on Invested Capital (ROIC) is also negative at -1.75% but still outperforms 9.63% of the industry. Over the past decade, Allstate has maintained profitability for 9 years, which is more consistent than over half of the companies in the industry.

Growth Trajectory of Allstate

The Growth Rank for Allstate is 6/10. The company has demonstrated robust growth with a 3-Year Revenue Growth Rate per Share of 14.20%, outperforming 81.86% of the industry. The 5-Year Revenue Growth Rate per Share is also strong at 12.50%, better than 81.5% of the industry. Looking ahead, Allstate's Total Revenue Growth Rate is estimated at 6.89% for the next 3 to 5 years, which is better than 64% of the industry. However, the EPS without NRI Growth Rate is projected at -147.10%, a figure that, while negative, is still better than 0% of the industry.

Notable Shareholders in Allstate

Among the major holders of Allstate stock, Barrow, Hanley, Mewhinney & Strauss leads with 5,344,741 shares, accounting for a 2.04% share percentage. Diamond Hill Capital (Trades, Portfolio) follows with 4,184,211 shares, representing 1.6% of the shares, and Nelson Peltz (Trades, Portfolio) holds 3,643,618 shares, or 1.39%. These significant investments by reputable firms and individuals underscore the confidence in Allstate's market position and future prospects.

Competitive Landscape

Allstate operates in a competitive insurance market. Its closest competitors based on market capitalization include The Travelers Companies Inc (TRV, Financial) with a market cap of $41.32 billion, The Hartford Financial Services Group Inc (HIG, Financial) valued at $23.58 billion, and Markel Group Inc (MKL, Financial) at $18.31 billion. Despite the competition, Allstate's recent stock performance and growth prospects position it as a formidable player in the industry.

Conclusion

In summary, Allstate Corp's recent stock performance has been impressive, with a significant 32.05% gain over the past three months, bringing its valuation to a fair level according to the GF Value. The company's profitability metrics, although featuring some negative figures, still compare favorably within the industry. Growth indicators are strong, particularly in revenue growth rates, which bode well for the company's future. The confidence of major shareholders further solidifies Allstate's standing in the market. When juxtaposed with its competitors, Allstate's market cap and recent stock rally highlight its resilience and potential for continued success in the competitive insurance landscape.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure