Since January 2025, Aflac has been in a holding pattern, posting a small loss of 1.9% while floating around $102.89. The stock also fell short of the S&P 500’s 4.3% gain during that period.
Is now the time to buy Aflac, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Is Aflac Not Exciting?
We're cautious about Aflac. Here are three reasons why you should be careful with AFL and a stock we'd rather own.
1. Declining Net Premiums Earned Reflects Weakness
Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.
Aflac’s net premiums earned has declined by 7.8% annually over the last four years, much worse than the broader insurance industry.
2. Projected Revenue Growth Is Slim
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Aflac’s revenue to rise by 2.4%. Although this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average.
3. EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Aflac’s EPS grew at an unimpressive 9.6% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 5% annualized revenue declines and tells us management adapted its cost structure in response to a challenging demand environment.
Final Judgment
Aflac isn’t a terrible business, but it doesn’t pass our quality test. With its shares lagging the market recently, the stock trades at 2.1× forward P/B (or $102.89 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - you can find more timely opportunities elsewhere. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce.
Stocks We Like More Than Aflac
Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
