RLI Corp. (RLI)
Valuation Overview•Is RLI Corp. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
High-quality fundamentals with a strong composite quality score of 82/100, backed by robust profitability and solvency.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: High-quality compounder, with profitability as the only relative weakness.
Wall Street is broadly bullish, projecting solid upside. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
RLI demonstrates strong business quality with robust profitability and healthy margins (highlighted by a massive 22.8% ROIC). This is paired with a moderately leveraged but stable balance sheet.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. This growth is supported by elite operational efficiency, sustaining an impressive 26.7% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $423.9M | +6.3% | +3.5% | +13.8% | +9.0% | |
| EBITDA | $69.7M | — | -10.3% | — | — | |
| Net Income | $54.9M | +16.6% | -11.6% | — | +11.4% | |
| EPS (Diluted) | $0.60 | +16.6% | -11.9% | +20.3% | +10.8% | |
| Free Cash Flow | $42.8M | +9.6% | +35.5% | +18.8% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 37.5% | 27.1% | 32.7% | 31.0% |
| Operating Margin | 26.7% | 25.5% | 29.6% | 22.9% |
| Net Margin | 20.8% | 20.4% | 23.8% | 18.9% |
| FCF Margin | 29.0% | 31.3% | 28.0% | 26.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.85 | $0.83 | -2.4% | ||
| Q1'26 | $0.81 | $0.94 | +15.3% | ||
| Q4'25 | $0.71 | $0.83 | +16.6% | ||
| Q3'25 | $0.75 | $0.84 | +12.0% | ||
| Q2'25 | $0.88 | $0.92 | +4.5% | ||
| Q1'25 | $1.05 | $0.41 | -61.0% | ||
| Q4'24 | $0.96 | $0.66 | -31.2% | ||
| Q3'24 | $1.41 | $0.86 | -39.0% |
Total return is -19.3% (1Y), lagging the benchmark by -44.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -11.3% | -20.6% | — |
| 1Y | -19.3% | -44.2% | +6.5% |
| 3YCAGR | -1.6% | -21.3% | +13.6% |
| 5YCAGR | +5.9% | -7.3% | +28.3% |
| 10YCAGR | +8.5% | -5.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about RLI Corp. (RLI) valuation, health, and returns.
RLI Corp. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +15.0% upside to DCF intrinsic value of $61.08)
RLI Corp. has multiple valuation anchors: DCF Intrinsic Value: $61.08 | Peer Relative Fair Value: $73.38 | Wall Street Analyst Target: $56.33 (implying +6.1% upside). A convergence of these signals offers higher conviction.
RLI Corp. displays excellent financial health with a composite quality score of 82/100, supported by a Piotroski F-Score of 8/9, Return on Invested Capital (ROIC) of 22.8%.
RLI Corp. pays a 4.9% dividend yield, covered by a 60% payout ratio with 37 years of growth, supplemented by a 0.0% buyback yield.
RLI Corp.'s current growth trajectory is Accelerating. The company achieved +6.3% 1Y revenue growth and +16.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +3.5%.
Wall Street consensus is Hold based on 12 analysts, beating EPS expectations in 50% of recent quarters with a -1-quarter streak. The consensus price target represents a +6.1% change from current levels.
Investment risks for RLI Corp. include: -35.2% 1-year max drawdown. Volatility risk is characterized by a beta of -0.21x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.