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1. Company Snapshot

1.a. Company Description

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty business services, asset management, and real estate businesses.The company operates through three segments: Extended Warranty, Leased Real Estate, and Kingsway Search Xcelerator.The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also sells new home warranty products, as well as offers uninsured warrant administration services to homebuilders and homeowners; markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies.


The Leased Real Estate segment owns a parcel of real property consisting of approximately 192 acres located in the State of Texas.The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, SEC reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services.The company offers its products and services through credit unions, dealers, homebuilders, and consumers.


Kingsway Financial Services Inc.was incorporated in 1989 and is based in Itasca, Illinois.

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1.b. Last Insights on KFS

Kingsway Financial Services Inc.'s recent performance was driven by strategic acquisitions and business growth. The company's acquisition of M.L.C. Plumbing LLC and Bud's Plumbing added $6.0 million of annual unaudited revenue and $0.8 million of annual unaudited adjusted EBITDA. Additionally, the acquisition of Viewpoint by SPI Software positions the company as a global leader in vacation ownership software, expanding its market reach and capabilities.

1.c. Company Highlights

2. Kingsway's Q3 2025 Earnings: Strong Revenue Growth and Segment Performance

Kingsway reported a robust third quarter with consolidated revenue increasing by 37% to $37.2 million, driven by significant growth in the KSX segment. The KSX segment achieved a 104% increase in revenue to $19 million, while adjusted EBITDA grew by 90% to $2.7 million. However, the company's adjusted consolidated EBITDA was $2.1 million, below the prior year's quarter. The earnings per share (EPS) came in at -$2.04, missing analyst estimates of -$1.48.

Publication Date: Nov -20

📋 Highlights
  • 37% Revenue Growth:: Consolidated revenue reached $37.2M, up from $27.1M in Q3 2024.
  • KSX Segment Stellar Performance:: Revenue surged 104% to $19M, with adjusted EBITDA up 90% to $2.7M.
  • Extended Warranty Resilience:: 2% revenue growth combined with robust cash flow and modified cash EBITDA stability.
  • TTM Adjusted Run Rate EBITDA:: $20.5M–$22.5M, reflecting sustained portfolio performance.
  • Strategic Acquisitions:: Four deals in Q3, including Southside Plumbing, with three mid-quarter acquisitions boosting Q4 projections.

Segment Performance

The KSX segment's strong performance was a key driver of the company's revenue growth, with the segment representing the majority of Kingsway's revenue for the first time. The Extended Warranty segment also performed well, with a 2% increase in top-line growth and robust cash flow. According to John Fitzgerald, the company's operating subsidiaries, such as Roundhouse and Kingsway Skilled Trades, have performed well since day one and are ahead of the underwriting case.

Valuation Metrics

To understand what's priced into Kingsway's stock, we can examine various valuation metrics. The company's Price-to-Sales Ratio stands at 2.82, while the EV/EBITDA ratio is significantly high at 120.15. The Price-to-Book Ratio is 21.18, indicating a premium valuation. These metrics suggest that the market is pricing in significant growth expectations for the company.

Growth Prospects

Kingsway's management is optimistic about the company's growth prospects, with a robust pipeline of attractive opportunities and a focus on disciplined execution. The company is targeting high single-digit organic growth potential at all of the businesses it acquires. The acquisition of Southside Plumbing and the addition of Colter Hanson as the newest Operator-in-Residence are expected to contribute to the company's growth momentum.

Challenges and Risks

Despite the positive outlook, Kingsway faces some challenges and risks, including uncertainty regarding Medicare and reimbursements that may affect its secure nursing and digital diagnostics businesses. However, the company is well-positioned to navigate these challenges, with a diversified portfolio of high-quality services companies and a strong management team.

3. NewsRoom

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Critical Review: Kingsway Financial Services (NYSE:KFS) & American Integrity Insurance Group (NYSE:AII)

Dec -04

Source: defenseworld.net

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Kingsway Financial Stock Slips Post Q3 Earnings Despite Revenue Growth

Nov -13

Source: zacks.com

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Kingsway Financial Services Inc. (KFS) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Kingsway Reports Third Quarter 2025 Financial Results

Nov -06

Source: accessnewswire.com

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Kingsway to Report Financial Results for Third Quarter 2025 on November 6

Oct -29

Source: accessnewswire.com

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Kingsway Search Xcelerator Announces New OIR Colter Hanson

Oct -21

Source: accessnewswire.com

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Kingsway Announces Acquisition of Southside Plumbing

Aug -18

Source: accessnewswire.com

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Kingsway Financial Shares Dip on Mixed Q2 Earnings and Revenue Growth

Aug -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.17%)

6. Segments

Extended Warranty

Expected Growth: 7.5%

Growing demand for extended warranties driven by increasing consumer electronics sales, rising product complexity, and need for post-purchase protection. Additionally, Kingsway Financial Services Inc.'s strong distribution network and partnerships with manufacturers will fuel growth.

Kingsway Search Xcelerator

Expected Growth: 12.4%

The Kingsway Search Xcelerator's growth is driven by the increasing demand for digital insurance platforms, the need for insurance professionals to efficiently compare products, and the rising adoption of insurtech solutions.

7. Detailed Products

Insurance Premium Finance

Kingsway Financial Services Inc. offers insurance premium finance solutions to individuals and businesses, allowing them to pay their insurance premiums in installments rather than a lump sum.

Commercial Loan Servicing

Kingsway Financial Services Inc. provides commercial loan servicing solutions to lenders, managing loan portfolios and providing administrative support.

Receivables Management

Kingsway Financial Services Inc. offers receivables management services, helping businesses manage their accounts receivable and improve cash flow.

Capital Markets Services

Kingsway Financial Services Inc. provides capital markets services, including investment banking, advisory services, and capital raising.

8. Kingsway Financial Services Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Kingsway Financial Services Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Kingsway Financial Services Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative financial services providers.

Bargaining Power Of Suppliers

Kingsway Financial Services Inc. has a diversified supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the financial services industry is moderate, as there are barriers to entry such as regulatory requirements and capital requirements.

Intensity Of Rivalry

The financial services industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.85%
Debt Cost 3.95%
Equity Weight 38.15%
Equity Cost 3.45%
WACC 3.76%
Leverage 162.11%

11. Quality Control: Kingsway Financial Services Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.79$

Current Price

12.79$

Potential

-0.00%

Expected Cash-Flows