MeritValue

ARCH CAPITAL GROUP LTD.

ACGLdata completeness 88%18 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

ARCH CAPITAL GROUP LTD. earns about 19% on invested capital, far above its ~9% cost of capital, and has bought back 6% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $118.87 and $974.93 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$9.25B1$9.61B2$13.6B3$17.4B3$19.9B3
Net income$2.16B4$1.48B5$4.44B6$4.31B6$4.4B6
Operating cash flow$3.43B7$3.82B8$5.75B9$6.67B9$6.17B9
Capital expenditure$41M10$50M11$52M12$51M12$44M12
Free cash flow (derived)$3.38B7$3.77B8$5.7B9$6.62B9$6.13B9
Total debt—————
Cash & equivalents$859M13$855M14$917M15$979M15$993M15
Diluted shares400.3M377.6M378.8M381.8M375.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$643.95
your share of equity
Profit it earned you last year
$117.03
Free cash flow it threw off
$163.02
Debt you’d be carrying
—

10 shares is a claim on $643.95 of net worth that earned you $117.03 and generated $163.02 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
19% avg · 5y
FY21 19%FY22 13%FY23 21%FY24 22%FY25 19%

It earned about 19% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−6% shares · 5y

Share count is down 6% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $118.87 and $974.93 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$974.93
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$6.13B
DCF · Growth Exit 5Y
$534.15
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$6.13B
Earnings Power Value
$118.87
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$4.31B
  • growthAssumed0.0%
Graham Number
$129.64
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $534.15
The three cases
Bear0.0%$235.56
Base20.0%$534.15
Bull20.0%$534.15

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000947484-24-000020 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000947484-25-000017 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0000947484-26-000017 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000947484-24-000020 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000947484-25-000017 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000947484-26-000017 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000947484-24-000020 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000947484-25-000017 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000947484-26-000017 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000947484-24-000020 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0000947484-25-000017 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0000947484-26-000017 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0000947484-24-000020 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000947484-25-000017 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000947484-26-000017 (CashAndCashEquivalentsAtCarryingValue)