How does Trendshare evaluate RLI as a worked example?

This example shows how we apply the Trendshare checklist to RLI: earnings power, cash generation, valuation, and margin of safety. We look at business quality, free cash flow trends, price to earnings, and whether there is a reasonable margin of safety at the current price of 59.39.

RLI Corp. Stock Price and Value Analysis

RLI Corp. (NYSE:RLI) in our automated value investing analysis, with the cash flow history and price comparison below.

Key Facts

Ticker: RLI (NYSE)
Current price: $59.39
Sector: Financial Services
Industry: Insurance - Property & Casualty
Dividend yield: 1.09%

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Hold-time calculator

Estimate how long you need to hold RLI Corp. to reach your target.

Target type Target price Target total return %

Current price

Expected annual return (compound annual growth rate, CAGR)

Margin of safety (%)

Target price (Trendshare FV)

Include dividend yield
1.09%

RLI Free Cash Flow Trend

CSV

Based on historical returns, we believe that RLI Corp. can grow its free cash at a rate of about 4%. That's positive!

Advantages	Disadvantages
This company has fluctuating growth. This company is solid.	This company has a low dividend yield. This stock looks overpriced. This company is making money at a modest rate.

Inside the RLI Numbers

	RLI Price (RLI Corp. stock price per share)	$59.39
× Present Value/Intrinsic Valuation The intrinsic value of a company is how much cash it can generate over its lifespan. If a business lasts for ten years and produces a million dollars of free cash profit every year, its intrinsic value is ten million dollars. The present value of an investment is the price you must pay right now to earn that intrinsic value in however many years you want to wait. This of course depends on the rate of return you want for your investment. You can't predict what a company will make in the future with perfect accuracy, but a company with a history of increasing its free cash flow every year is likely to do so over time. By projecting free cash flow into the future, you can calculate a fair price for the stock right now. While most stocks are priced fairly, sometimes they go on sale. This calculation will help you decide that. You still have to figure out if it's a good investment, but bargains exist. Close ^[?]	RLI Fair Price (based on intrinsic value)	$44.28
× Safety Margin Price The safety margin of a stock helps you avoid risk. Why? Because the discounted free cash flow analysis relies on estimates, discounting the fair price by a further safety margin gives you some wiggle room to be wrong about those estimates. Established companies with stable free cash flow growth need a small safety margin. Smaller and newer and riskier companies need a larger safety margin. A company with a lot of debt needs a larger safety margin and a company with a lot of equity needs less. By investing in multiple companies and keeping a sensible safety margin, you can be pleasantly surprised by great companies outperforming your expectations and minimize the possibility of stagnation (or even loss) by companies which underperform. Close ^[?]	RLI Safety Price (based on a variable margin of safety)	$28.78
	Try your own return The fair price above uses a 10.1% discount rate, the long-run US stock return (10.1% geometric, 1926 to 2025, from Bessembinder's working paper, updated 2026-11-09), and 2.5% terminal growth. A higher rate suits a higher return target and gives a lower value. Discount rate (%) Terminal growth (%) Value per share:
× PE Ratio Versus Sector The PE ratio measures the reported earnings of a company to its current stock price. While earnings are easy to manipulate on the balance sheet, this ratio gives you a sense of what buyers are willing to pay for the stock—what they believe it will do in the future. Comparing a stock's PE to the average PE of companies in its industry gives you a sense of market sentiment about the stock and how well it fares financially. It's not the only number, nor the most important, but comparing similar companies is valuable. A ratio far above or below that of its peers is significant. Industries are more specific than sectors, so companies within most industries are more similar than are companies within an industry. Be aware that the size and customers of companies are important to their prospects. Close ^[?]	PE Ratio versus Sector	5% lower than other Financial Services stocks
× PE Ratio Versus Industry The PE ratio measures the reported earnings of a company to its current stock price. While earnings are easy to manipulate on the balance sheet, this ratio gives you a sense of what buyers are willing to pay for the stock—what they believe it will do in the future. Comparing a stock's PE to the average PE of companies in its sector gives you a sense of market sentiment about the stock and how well it fares financially. It's not the only number, nor the most important, but comparing similar companies is valuable. A ratio far above or below that of its peers is significant. Be aware that sectors are very broad, with many types of companies in the same sector. Close ^[?]	PE Ratio versus Industry	22% higher than other Insurance - Property & Casualty stocks
× Cash Yield The cash yield of a stock is the ratio of free cash per share—real dollars available after bringing in revenue and paying bills—to the current price of the stock. It's similar to the PE ratio, but it's less prone to manipulation through accounting practices. In general, the less you have to pay to make more money, the better. Close ^[?]	Cash Yield	2.81%
× Free Cash Flow Jitter The free cash flow jitter of a stock measures how much the company's free cash flow varies from its historical trend, on average. While it's always nice to make more money than you expected, a company with predictable free cash flow is stable and good. A company with wild swings in its free cash flow warrants further research. In general, the lower this number, the better. Close ^[?]	Free Cash Flow Jitter	35%
× Dividend Yield The dividend yield of a stock is the amount of money paid out in dividends every year divided by the stock's current price. While not every stock pays a dividend, many solid companies pay good dividends. In general, the higher this calculation, the better—think of it like an interest rate of an investment—if the company pays dividends consistently. A high dividend payout rate may indicate that the share price has fallen recently. Be sure that the company is worth investing in before you chase high dividend yields! Close ^[?]	Dividend Yield	1.09% (tax impact)
	Shares Shorted	8,436,262

Insider Activity Summary

No open-market insider buys or sells are recorded for the last 12 months.

This stock has short interest! This means that people have shorted it.

Why does that matter? They've made a bet that price will decrease from where they bought it. Maybe there are financial problems, or maybe there's a value play.

As of the latest analysis, there are 8,436,262 shares shorted. With 81,506,328 shares available for purchase and an average trading volume over the past 10 trading days of 542,750, it would take at least 15.5 days for all of the short holders to cover their shorts.

What does this mean to you? At this volume, it'll take more than two trading weeks for shorts to cover. This may indicate a short squeeze play would work! If this stock has good fundamentals and it'll take a while for the short holders to cover, buying now could net you bigger short-term technical gains if and as the price rises.

Estimate Intrinsic Value (DCF)

Project future free cash flow and discount it back to today to compare market price vs intrinsic value. See how compound returns work over time.

📊 Intrinsic Value Calculator (DCF Method)

Calculate the present value of future cash flows to determine stock intrinsic value.

Annual Free Cash Flow ($):

Current or most recent year free cash flow (operating cash - capex)

Expected Annual Growth Rate (%):

Conservative estimate (3-7% for mature companies, 10-20% for growth)

Discount Rate (%):

Required rate of return (8-10% stable, 12-15% growth, 15%+ speculative)

Projection Period (Years):

Longer projections are less certain but may reveal more value

Terminal Value Multiple:

Exit multiple for terminal value (10-15x typical for mature companies)

Calculation Results

Total Intrinsic Value:

Discounted Cash Flows:

Terminal Value (PV):

Year	Future CF	Present Value

How to use this result: Compare the intrinsic value to the current stock price. If intrinsic value is significantly higher than market price (30-50% margin of safety), the stock may be undervalued. Remember, these are estimates based on your assumptions.

Learn to Evaluate RLI

Learn how to evaluate stocks, understand expected returns, and build a value investing strategy.

See How Returns Compound →

Free Cash Flow by Fiscal Year

Each year names the SEC filer that reported it, so a change of filer shows up here.

Fiscal year	SEC filer (CIK)	Free cash flow (USD millions)
2008	84246	155.3
2009	84246	119.0
2010	84246	93.4
2011	84246	111.5
2012	84246	28.0
2013	84246	124.4
2014	84246	113.5
2015	84246	141.5
2016	84246	161.2
2017	84246	185.5
2018	84246	207.4
2019	84246	267.2
2020	84246	254.4
2021	84246	377.6
2022	84246	243.8
2023	84246	457.7
2024	84246	554.1
2025	84246	608.2

Download the yearly data as CSV.

Price Versus Our Estimated Value

RLI Corp. is priced at $59.39, above our fair value estimate of $44.28 and its safe value of $28.78.

Free cash flow was positive in all 18 fiscal years we have for RLI Corp. under its current SEC filer.

RLI Corp.'s average free cash flow rose sharply, from $122.6 million in its earliest three years to $540.0 million in its latest three.

Year-to-year variability in free cash flow is uneven, measured at 35%.

These figures are automated calculations from SEC filings and the recent price. They are not a recommendation to buy or sell. See how we estimate value.

RLI Corp. yields 1.09% in dividends.

Compared With Its Sector and Industry

Its trailing P/E ratio is 5% below the average for stocks in the Financial Services sector.

Its trailing P/E ratio is 22% above the average for stocks in the Insurance - Property & Casualty industry.

A P/E ratio depends on trailing earnings, which one-time items can distort, so a lower P/E is not by itself evidence of value.

SEC Filer History

Every fiscal year on this page is reported by one SEC filer, CIK 84246.

Each figure on this page comes from that filer.

Risks to This Analysis

This page's data was last updated on 2026-09-18. Prices and filings may have changed since.
These figures are automated calculations from SEC filings and the recent price. They may contain errors, and they do not reflect lawsuits, management changes, or other events the filings do not show.

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Questions to Answer Before You Invest in RLI

Does RLI Corp. have a coherent story? Does it have a plan to continue to make money? Is it worth your time? Only you can decide where to go from here. Our investment guide helps you ask the right questions, including how to buy stocks. Use these research links for more information.

Step 1 — Snapshot
- Price: 59.39
- Market cap: $5.5B
- EPS: 4.76
Step 2 — Valuation checks
- P/E: 12.477
- FCF yield: 2.8%
- Date checked: Sep 18, 2026
Step 3 — Margin of safety
- Compare price to fair value and safety price.
- Look for durable cash generation and reasonable leverage.
- Decide if it passes your personal checklist.