Is American Coastal Insurance Corp. overvalued or undervalued?

As of 6 August 2025, the valuation grade for American Coastal Insurance Corp. moved from attractive to very attractive, indicating a positive shift in its valuation outlook. The company appears to be undervalued, supported by a P/E ratio of 7, significantly lower than its peers, such as Universal Insurance Holdings, Inc. with a P/E of 16.53 and Greenlight Capital Re Ltd. at 11.50. Additionally, the EV to EBITDA ratio stands at 48.79, which, while high, is offset by the low P/E, suggesting that the market may not be fully recognizing the company's potential. In terms of performance, American Coastal Insurance Corp. has shown a remarkable 3-year return of 1182.67%, far exceeding the S&P 500's return of 70.41% over the same period, although it has underperformed in the year-to-date and 1-year comparisons. With a Price to Book Value of 2.03 and an EV to Sales ratio of 1.14, the company's valuation metrics further reinforce the notion that it is undervalued relative to its peers.