Fairfax Financial Holdings Ltd. (FFH.TO) reported first-quarter 2025 earnings that substantially exceeded analyst expectations, with earnings per share (EPS) of C$42.70 compared to the estimated C$25.15, representing a roughly 70% beat. The company demonstrated a 23.82% year-over-year increase in net profit after tax (NPAT), largely driven by approximately C$1 billion in realized investment gains and a 5.3% increase in investments during the quarter. Key positive factors highlighted by analysts include high single-digit net premium growth, 3.5 combined ratio points of reserve releases, and steady investment income. Despite challenges such as catastrophe losses from California wildfires, Fairfax's diverse operations contributed to the strong performance. The company benefits from a substantial float of around C$40 billion against a market capitalization under C$35 billion, with a float-to-equity ratio exceeding 1.5 times. This leverage, combined with investment income from a roughly C$50 billion fixed income portfolio, supports pre-tax earnings estimated at about C$180 per share before returns from other investments, suggesting a high return on equity floor. Following the earnings release, CIBC raised its price target for Fairfax to C$2,700, reflecting a 1.6 times price-to-fair book value ratio and increased its 2025 earnings forecast from approximately C$90 to C$140. Morningstar maintained a more conservative fair value estimate of C$1,540, anticipating earnings to decline by 2028. The stock has been consolidating for months and continues to show potential for further gains, despite an 18% short interest during this period. Fairfax Financial's strong earnings and financial structure have reinforced investor confidence amid market uncertainties.