Globe Life (GL)

Insurance holding company Globe Life (NYSE:GL) missed Wall Street’s revenue expectations in Q3 CY2025 as sales rose 3.8% year on year to $1.51 billion. Its GAAP profit of $4.73 per share was 3.9% above analysts’ consensus estimates.

Company Overview

With roots dating back to 1900 and a rebranding from Torchmark Corporation in 2019, Globe Life (NYSE:GL) is an insurance holding company that offers life insurance, supplemental health insurance, and annuity products through various distribution channels.

Life insurance companies collect premiums from policyholders in exchange for providing a future death benefit or retirement income stream. Interest rates matter for the sector (and make it cyclical), with higher rates allowing insurers to reinvest their fixed-income portfolios at more attractive yields and vice versa. Additionally, favorable demographic shifts, such as an aging population, are driving strong demand for retirement products while AI and data analytics offer significant opportunities to improve underwriting accuracy and operational efficiency. Conversely, the industry faces headwinds from persistent competition from agile insurtechs that threaten traditional distribution models.

Globe Life competes with other insurance providers such as Aflac (NYSE:AFL), MetLife (NYSE:MET), Prudential Financial (NYSE:PRU), and Lincoln National (NYSE:LNC) in the life and supplemental health insurance markets.

Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Over the last five years, Globe Life grew its revenue at a tepid 5% compounded annual growth rate. This was below our standard for the insurance sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Globe Life’s annualized revenue growth of 4.5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Globe Life’s revenue grew by 3.8% year on year to $1.51 billion, falling short of Wall Street’s estimates.

Net premiums earned made up 80.9% of the company’s total revenue during the last five years, meaning Globe Life barely relies on non-insurance activities to drive its overall growth.

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are:

• Gross premiums - what’s ceded to reinsurers as a risk mitigation and transfer strategy

Globe Life’s net premiums earned has grown at a 5.1% annualized rate over the last five years, worse than the broader insurance industry and in line with its total revenue.

When analyzing Globe Life’s net premiums earned over the last two years, we can paint a similar picture as it recorded an annual growth rate of 4.6%. This performance was similar to its total revenue.

Globe Life produced $1.23 billion of net premiums earned in Q3, up 5% year on year and in line with Wall Street Consensus estimates.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For insurance companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

Insurance companies are balance sheet businesses, where assets and liabilities define the economics. Interest income and expense should therefore be factored into the definition of profit but taxes - which are largely out of a company’s control - should not. This is pre-tax profit by definition.

Over the last four years, Globe Life’s pre-tax profit margin has fallen by 4.8 percentage points, going from 19% to 23.8%. It has also expanded by 2.7 percentage points on a two-year basis, showing its expenses have consistently grown at a slower rate than revenue. This typically signals prudent management.

Globe Life’s pre-tax profit margin came in at 31.5% this quarter. This result was 5.7 percentage points better than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Globe Life’s EPS grew at a solid 16% compounded annual growth rate over the last five years, higher than its 5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Globe Life, its two-year annual EPS growth of 19.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, Globe Life reported EPS of $4.73, up from $3.44 in the same quarter last year. This print beat analysts’ estimates by 3.9%. Over the next 12 months, Wall Street expects Globe Life’s full-year EPS of $13.81 to grow 5.1%.

Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float – premiums collected but not yet paid out – are invested, creating an asset base supported by a liability structure. Book value captures this dynamic by measuring:

• Assets (investment portfolio, cash, reinsurance recoverables) - liabilities (claim reserves, debt, future policy benefits)

BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

Globe Life’s BVPS declined at a 2.3% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 19.1% annually over the last two years from $49.04 to $69.52 per share.

Over the next 12 months, Consensus estimates call for Globe Life’s BVPS to grow by 51.9% to $94.22, elite growth rate.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Globe Life has no debt, so leverage is not an issue here.

Return on Equity, or ROE, ties everything together and is a vital metric. It tells us how much profit the insurer generates for each dollar of shareholder equity entrusted to management. Over a long period, insurers with higher ROEs tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Globe Life has averaged an ROE of 17.3%, excellent for a company operating in a sector where the average shakes out around 12.5% and those putting up 20%+ are greatly admired. This is a bright spot for Globe Life.

Net premiums earned met expectations, but EPS beat. Overall, this was a fine quarter. The stock traded up 3.3% to $140.19 immediately after reporting.

Updated: December 4, 2025 at 11:17 PM EST

Are you wondering whether to buy Globe Life or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

Globe Life’s business quality ultimately falls short of our standards. First off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while its estimated BVPS growth for the next 12 months is great, the downside is its BVPS has declined over the last five years. On top of that, its projected EPS for the next year is lacking.

Globe Life’s P/B ratio based on the next 12 months is 1.8x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $166.70 on the company (compared to the current share price of $130.82).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.