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Kinsale Capital Group, Inc. (KNSL) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Kinsale Capital Group, Inc. (KNSL)

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Intrinsic Value (DCF)

Current$380.95
→
Intrinsic$625.30
+64%
$424.76$625.30$1,005.77
Market implies 12% growth for 5 years
DCF analysis suggests KNSL could have 64% upside at 25% growth — verify assumptions match your view.
At $381, the market prices in 12% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $425 → Bull $1006. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$770$832$898$969
10%$538$580$625$673
12%$409$441$474$510
14%$328$353$379$407

Bull Case

  • Bull case ($1006) offers 164% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (12%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($425) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Net Income Projection

Year 1$518.55M
Year 2$648.19M
Year 3$810.24M
Year 4$1.01B
Year 5$1.27B
Terminal$18.63B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$414.84MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is KNSL stock undervalued or overvalued?
🟢 UNDERVALUED

KNSL trades at $380.95 vs. our DCF-derived intrinsic value of $517.47, implying +29% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of KNSL's future cash flows. The bear case ($338.36) still suggests upside, providing margin of safety.

What is KNSL's intrinsic value?

Using a 5-year DCF model: Base FCF of $415M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $71M net debt and dividing by 0.02B shares: Bear $338.36 | Base $517.47 | Bull $781.22. Current price $380.95 implies +29% to base case.

How is KNSL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($12.14B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.