MeritValue

RLI CORP

RLIdata completeness 100%18 fiscal years on file
The thesis, from the filings

RLI CORP earns about 26% on invested capital, far above its ~9% cost of capital, but has diluted owners by 102% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $38.78 and $358.07 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$1.18B1$1.7B2$1.51B3$1.77B3$1.88B3
Net income$279.4M4$583.4M5$304.6M6$345.8M6$403.3M6
Operating cash flow$384.9M7$250.4M8$464.3M9$560.2M9$614.2M9
Capital expenditure$8.31M10$5.89M11$5.91M12$4.71M12$5.52M12
Free cash flow (derived)$376.6M7$244.6M8$458.3M9$555.5M9$608.7M9
Total debt$199.7M13$199.9M14$200M14$100M15$100M15
Cash & equivalents$88.8M16$22.8M17$36.4M17$39.8M17$51.6M17
Diluted shares45.7M91.6M92.2M92.5M92.4M

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
$192.46
your share of equity
Profit it earned you last year
$43.66
Free cash flow it threw off
$65.88
Debt you’d be carrying
$10.82

10 shares is a claim on $192.46 of net worth that earned you $43.66 and generated $65.88 of cash last year, against $10.82 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
26% avg · 5y
FY21 21%FY22 44%FY23 20%FY24 22%FY25 22%

It earned about 26% 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
+102% shares · 5y

Share count is up 102% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 50% — deleveraging.

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 $38.78 and $358.07 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
$358.07
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$555.5M
DCF · Growth Exit 5Y
$195.51
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$555.5M
Earnings Power Value
$38.78
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$345.8M
  • growthAssumed0.0%
Graham Number
$43.5
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 $195.51
The three cases
Bear0.0%$85.38
Base20.0%$195.51
Bull20.0%$195.51

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 0001558370-24-001599 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-25-001301 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001104659-26-018013 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001558370-24-001599 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001558370-25-001301 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001104659-26-018013 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001558370-24-001599 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001558370-25-001301 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001104659-26-018013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001558370-24-001599 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001558370-25-001301 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001104659-26-018013 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001564590-22-005648 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001558370-24-001599 (LongTermDebt)
  15. 10-K · period ending 2024-12-31 · accession 0001104659-26-018013 (ShortTermBorrowings)
  16. 10-K · period ending 2021-12-31 · accession 0001564590-22-005648 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-12-31 · accession 0001104659-26-018013 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)