This Stock With Massive Earnings Growth Crushes S&P 500, Hangs Tough Near Entry

 Updated 03/07/2025 04:12 PM ET

With the stock market currently in the midst of a sharp pullback, it is a good time to look for stocks showing relative strength. Insurance stock Axis Capital (AXS) is hanging tough near an entry as earnings rocket.

The Bermuda-based company is a global specialty underwriter and provider of insurance. It has operations in the U.S., Europe, Singapore and Canada. It operates in two segments, insurance and reinsurance, with the former providing the bulk of its sales.

Insurance stocks have been performing well so far in 2025. Axis is no exception, with the firm's gain so far this year coming in at nearly 4%. This is better than the benchmark S&P 500, which has fallen nearly 2% year to date.

All-around performance for the stock is strong, with its IBD Composite Rating currently sitting at 94 out of 99.

Its biggest strength is earnings performance. In the most recent quarter, the firm swung from a year-ago loss of $1.17 per share to EPS of $3.06, according to MarketSurge. This comes on top of earnings growth of 31% and 16% in the prior two quarters.

Full-year earnings are seen declining 4% this year before accelerating to 11% growth in 2026.

Analyst Rates Insurance Stock

The stock currently has a consensus analyst rating of buy with an average price target 108.29, according to TipRanks.

Jefferies analyst Andrew Andersen believes the firm is benefiting from less-volatile underwriting margins and a mix shift to the specialty space.

"The company has been making progress toward derisking and lowering its catastrophe exposure while shifting to specialty insurance," Andersen said in a Feb. 7 note to clients. "We do not believe consensus estimates accurately reflect catastrophe derisking and the company's turnaround and rate momentum in insurance."

Anderson, who has a buy rating on the stock and a price target of 116, said its insurance business is positioned for mid-to-high single-digit growth in 2025.

Axis Capital Stock Analysis

Axis Capital stock is among the top 9% of issues in terms of price performance over the past 12 months.

It had cleared a cup-with-handle entry of 94.54, according to MarketSurge pattern recognition. However, it has slipped below the buy point amid broad market weakness.

It fell below the 21-day exponential moving average. If it can retake the benchmark it would be a positive step. So far, the stock is not threatening any sell signals, and on Friday found support at the 50-day line.

Big Money has been a net buyer of shares in recent times. This is reflected in its Accumulation/Distribution Rating of B. In total, 56% of its stock is currently held by funds.

Causeway Capital, which is led by prominent value investor Sarah Ketterer, is among the noteworthy holders of the stock.

Please follow Michael Larkin on X at @IBD_MLarkin for more analysis of growth stocks.