ProAssurance Moves 12.6% Higher: Will This Strength Last?

ProAssurance PRA shares soared 12.6% in the last trading session to close at $13.16. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.2% loss over the past four weeks.

Increased optimism around the accelerated growth in new business is driving the stock. This is expected to boost premium levels in the near future. The company's Specialty P&C Segment and Workers' Compensation Insurance businesses are likely to be key growth drivers. Additionally, the company's focus on cost-control measures is expected to improve its margins, further enhancing its financial performance.

This medical professional liability insurer is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of -50%. Revenues are expected to be $273.65 million, down 3.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For ProAssurance, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PRA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy).

ProAssurance is a member of the Zacks Insurance - Property and Casualty industry. One other stock in the same industry, Root, Inc. ROOT, finished the last trading session 5.5% lower at $63.40. ROOT has returned 30.3% over the past month.

For Root, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$1.74. This represents a change of +31.8% from what the company reported a year ago. Root currently has a Zacks Rank of #1 (Strong Buy).

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