Arch Capital Group Ltd.

AI-generated fair value estimate for this company.

Method: Residual-income / justified price-to-book model: book value per share of $68.06 (Q2 2026) times [(sustainable ROE 13% minus growth 4%) divided by (cost of equity 10% minus growth 4%)] equals $68.06 times a 1.5x justified P/B = $102.09/share. Reported Q2 2026 annualized operating ROE was 15.3% (net income ROE 18.0%), haircut to a 13% through-cycle sustainable ROE to reflect eventual underwriting-cycle normalization; 10% cost of equity is standard for a large diversified P&C reinsurer; 4% terminal book-value growth.

Reasoning: Arch Capital Group is a large, diversified Bermuda-domiciled but 10-K-filing NASDAQ insurer/reinsurer best valued off book value and sustainable ROE relative to cost of capital rather than FCF, since insurer free cash flow is not economically meaningful; the resulting value versus the current price of approximately $94.95 implies modest undervaluation, consistent with Arch's above-average but cyclical profitability.