We publish no single base value for Arch Capital Group. Our valuation methods put it between $59.50 and $180.13 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $180.13 | +64.9% | free cash flow $5.63bn, growth -8.9% for 5 years, then fading to 3% over 5 more, discounted at 7.38%; stress floor $170.12 |
| Exit multiple (P/E) | $59.50 | -45.5% | earnings per share $10.23 valued at 10× (the 10× floor; the stock's own median P/E is 9.7×) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.22 (5 years of monthly returns against the S&P 500; standard error 0.20) |
| Peer beta | 0.29 (median of 7 S&P 500 Property & Casualty Insurance companies) |
| Blend of own and peers | 0.26 (47% own, 53% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.50 (0.67 × 0.26 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 7.38% |
Free cash flow grows -8.90% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $5.63bn | — | — |
| Year 1 | -8.90% | $5.13bn | 0.9313 | $4.78bn |
| Year 2 | -8.90% | $4.67bn | 0.8673 | $4.05bn |
| Year 3 | -8.90% | $4.26bn | 0.8077 | $3.44bn |
| Year 4 | -8.90% | $3.88bn | 0.7522 | $2.92bn |
| Year 5 | -8.90% | $3.53bn | 0.7005 | $2.47bn |
| Year 6 | -6.92% | $3.29bn | 0.6523 | $2.14bn |
| Year 7 | -4.93% | $3.13bn | 0.6075 | $1.90bn |
| Year 8 | -2.95% | $3.03bn | 0.5657 | $1.72bn |
| Year 9 | -0.97% | $3.00bn | 0.5269 | $1.58bn |
| Year 10 | 1.02% | $3.03bn | 0.4906 | $1.49bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (7.38% − 3%) | $71.36bn |
| Terminal value in today's money | $35.01bn |
| Present value of years 1–10 | $26.49bn |
| Total present value | $61.50bn |
| Shares outstanding | 341.40m |
| Value per share = total ÷ shares | $180.13 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth -13.9% | Growth -8.9% | Growth -3.9% |
|---|---|---|---|
| 6.38% | $161.15 | $226.79 | $318.04 |
| 7.38% | $130.08 | $180.13 | $249.19 |
| 8.38% | $110.33 | $150.61 | $205.78 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.22 | 6.12% | $243.76 |
| Peer beta | 0.29 | 6.43% | $223.53 |
| Adjusted beta (used) | 0.50 | 7.38% | $180.13 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $10.23 |
| Year 1 | -8.90% | $9.32 |
| Year 2 | -5.33% | $8.82 |
| Year 3 | -2.83% | $8.57 |
| Year 4 | -1.08% | $8.48 |
| Year 5 | 0.14% | $8.49 |
| Earnings per share in year 5 | $8.49 |
| Exit P/E (the 10× floor; the stock's own median P/E is 9.7×) | 10× |
| Value in 5 years = earnings × P/E | $84.94 |
| Discounted at 7.38% over 5 years: ÷ 1.4276 | $59.50 |
We publish no single base value for Arch Capital Group. Our valuation methods put it between $59.50 and $180.13 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $87.77 and a 10% chance it is above $150.33 in a year; a 60% chance it is higher than today's $109.24, from 20.89% volatility. The simulation assumes the price drifts up at our discount rate of 7.38% a year.
At $109.24 the price implies free cash flow growing -16.6% a year for five years and then fading toward 3% over five more; its revenue has grown -8.9%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $93.60 | — |
| 9 Oct 2026 | $95.57 | — |
| 16 Oct 2026 | $101.27 | — |
| 23 Oct 2026 | $101.69 | — |
| 30 Oct 2026 | $106.36 | — |
| 6 Nov 2026 | $107.28 | — |
| 12 Nov 2026 | $109.24 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
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