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HCI Group Inc (HCI)
NYSE:HCI
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HCI Group
(NYSE:HCI)
67Neutral
Positive Factors
Earnings
HCI reported operating EPS of $0.31 per share, handily beating both the loss estimate and consensus expectations.
Growth Potential
The stock is currently trading at 8 times the 2025 EPS estimate, which may not fully account for potential growth.
Partnership Opportunities
Management has received several inbound inquiries from other companies interested in partnerships to use its technology, indicating potential for lucrative long-term opportunities.
Negative Factors
Conflict of Interest
The spin-off would help clear conflict-of-interest concerns as Exzeo seeks homeowners insurance customers beyond HCI, and the move could unlock significant value for HCI shareholders if Exzeo can hold its own as a standalone company.
Valuation Concerns
The stock is currently trading at 10 times our 2025 EPS estimate, which we believe does not take into account the near-term earnings growth potential.
HCI Group (HCI) vs. S&P 500 (SPY)
Market Cap
$1.58B
Dividend Yield1.03%
Average Volume (3M)165.38K
Price to Earnings (P/E)16.7
Beta (1Y)0.58
Revenue Growth20.95%
EPS Growth3.25%
CountryUS
Employees552
SectorFinancial
Sector Strength89
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)5.35
Shares Outstanding10,764,836
10 Day Avg. Volume91,323
30 Day Avg. Volume165,380
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.91
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.92
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$178.25Price Target Upside6.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
HCI Group Business Overview & Revenue Model
Company DescriptionHCI Group (HCI) is a diversified holding company primarily engaged in the property and casualty insurance industry. Through its subsidiaries, HCI offers homeowners insurance, reinsurance, and information technology services. The company is headquartered in Tampa, Florida, and its operations are mainly concentrated in the United States, focusing on providing comprehensive insurance solutions to protect homes and businesses against various risks.
How the Company Makes MoneyHCI Group generates its revenue primarily through the underwriting and sale of insurance policies, with a significant portion coming from homeowners insurance. The company collects premiums from policyholders, which form the core of its income. Additionally, HCI earns revenue through its reinsurance operations, which involve selling portions of its insurance risk to other insurers, thereby receiving reinsurance premiums. The company also has a technology arm that provides IT services and solutions, contributing to its overall revenue. HCI's strategic partnerships with other insurers and reinsurers, as well as its focus on leveraging technology to enhance efficiency and customer experience, further bolster its revenue streams.
HCI Group Financial Statement Overview
Summary
HCI Group shows robust revenue growth and profitability with a strong income statement. However, concerns arise from negative operating cash flows and declining free cash flow, which could affect future operations. The balance sheet shows moderate leverage with a solid capital structure.Income Statement
The income statement shows strong revenue growth with a notable increase from $550.67 million in 2023 to $750.05 million in 2024, representing a growth rate of 36.14%. The gross profit margin stands at a solid 100% due to the company's revenue equating to gross profit. The net profit margin improved significantly to 17.00%, indicating enhanced profitability. However, the absence of EBITDA in 2024 suggests a potential area of concern in operational efficiency.―
Balance Sheet
The balance sheet highlights a high debt-to-equity ratio of 0.41, suggesting moderate leverage that is manageable but could pose risks if liabilities continue to rise. The return on equity is healthy at 28.13%, reflecting effective utilization of shareholder funds. However, the equity ratio of 60.11% suggests a solid capital structure, indicating strong financial stability.65
Cash Flow
Cash flow analysis reveals a concerning trend with operating cash flow turning negative in 2024, contrasting sharply with positive cash flows in previous years. The free cash flow growth rate is also negative, reflecting decreased liquidity. The operating cash flow to net income ratio is negative, indicating a disconnect between reported earnings and cash generation.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 750.05M | 550.67M | 496.45M | 407.92M | 274.08M | Gross Profit |
| 750.05M | 528.04M | 471.47M | 386.07M | 260.28M | EBIT |
| 686.90M | 474.17M | -64.68M | -600.00K | 35.07M | EBITDA |
| 0.00 | 136.95M | -52.64M | 340.64M | 57.41M | Net Income Common Stockholders |
| 109.95M | 79.03M | -54.60M | 7.24M | 27.58M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 97.75M | 770.50M | 718.76M | 671.53M | 503.06M | Total Assets |
| 754.20M | 1.81B | 1.80B | 1.18B | 941.31M | Total Debt |
| 186.44M | 209.90M | 212.41M | 62.71M | 184.28M | Net Debt |
| 87.51M | -326.57M | -22.45M | -566.24M | -247.07M | Total Liabilities |
| 1.76B | 1.39B | 1.55B | 762.40M | 740.18M | Stockholders Equity |
| 453.33M | 324.84M | 162.60M | 323.37M | 201.14M |
| Cash Flow | Free Cash Flow | |||
| -6.59M | 225.50M | -10.15M | 93.19M | 70.87M | Operating Cash Flow |
| -6.34M | 230.66M | -12.00K | 96.50M | 77.31M | Investing Cash Flow |
| -97.47M | 4.27M | -434.54M | 36.85M | 143.22M | Financing Cash Flow |
| -75.17M | 67.12M | 41.07M | 64.30M | -16.70M |
HCI Group Technical Analysis
Positive
167.13
Price Trends
142.88
Positive
130.47
Positive
117.66
Positive
Market Momentum
3.96
Negative
76.94
Negative
88.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCI, the sentiment is Positive. The current price of 167.13 is above the 20-day moving average (MA) of 147.29, above the 50-day MA of 142.88, and above the 200-day MA of 117.66, indicating a bullish trend. The MACD of 3.96 indicates Negative momentum. The RSI at 76.94 is Negative, neither overbought nor oversold. The STOCH value of 88.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HCI.
HCI Group Risk Analysis
HCI Group disclosed 39 risk factors in its most recent earnings report. HCI Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
HCI Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.81B | 14.53 | 11.47% | 0.93% | 10.78% | 28.31% | |
74 Outperform | $1.59B | 12.64 | 8.14% | ― | -5.61% | -44.11% | |
74 Outperform | $1.59B | 11.73 | 9.91% | 3.25% | 6.33% | ― | |
69 Neutral | $1.71B | 19.58 | 6.04% | 2.09% | -2.00% | -23.84% | |
67 Neutral | $1.58B | 16.73 | 28.75% | 1.03% | 20.95% | 3.25% | |
64 Neutral | $12.57B | 9.74 | 7.88% | 16985.68% | 12.42% | -5.45% | |
48 Neutral | $1.59B | 97.23 | -0.15% | ― | 4.29% | -109.93% |
* Financial Sector Average
Performance Comparison
HCI
HCI Group
167.13
65.61
64.63%
FBNC
First Bancorp
41.80
10.78
34.75%
FCF
First Commonwealth
15.66
2.24
16.69%
CUBI
Customers Bancorp
52.00
3.01
6.14%
NIC
Nicolet Bankshares
120.04
39.90
49.79%
CLBK
Columbia Financial
15.26
-0.48
-3.05%
HCI Group Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 7.92%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented numerous positive developments, including strong financial performance, strategic debt reduction, and significant progress in corporate restructuring efforts. The company's operational metrics showed improvement, and plans for future growth, particularly the spin-off of Exio, were well-received.Q1-2025 Updates
Positive Updates
Revenue and Profit Growth
Gross earned premiums increased by 17% compared to the same quarter last year. Pretax net income was over $100 million, and earnings were $5.35 per share, up from $3.81 last year.
Loss Ratio Improvement
The gross loss ratio this quarter was less than 20%, down from 31% in the previous year, driven by legislative changes and favorable weather conditions.
Debt Reduction
HCI plans to redeem its 4.75% convertible senior notes, reducing debt by approximately $172 million.
Exio Separation Progress
Substantial progress made on separating Exio from HCI Group, with plans to spin off Exio as a standalone company by the end of the year.
Real Estate Achievements
Greenleaf division entered a multiyear lease with GEICO, adding 190,000 square feet to its portfolio, contributing to an $85 million off-balance sheet gain.
Negative Updates
Impact of Hurricane Milton
Hurricane Milton resulted in a net impact of $128 million, including $78 million of net loss expense and a $50 million reversal of benefits under a reinsurance agreement.
Company Guidance
During HCI Group's first-quarter 2025 earnings call, the company reported robust financial performance, including a 17% increase in gross earned premiums and a reduction in the net combined ratio to 56% from 67% in the previous year. Pretax net income exceeded $100 million, with earnings of $5.35 per share. The gross loss ratio decreased to less than 20%, driven by legislative changes and favorable weather conditions, with claim frequency down over 40% compared to the previous year. HCI's shareholder equity grew by nearly $70 million, and book value per share increased by more than $6. Additionally, the company announced plans to redeem its 4.75% convertible senior notes by June, reducing debt by approximately $172 million. Exio, HCI's technology division, is set to spin off as a standalone entity, creating opportunities to expand its platform beyond HCI and capture a broader market share, with Exio already managing $1.2 billion in premiums.HCI Group Corporate Events
Executive/Board Changes
HCI Group Director Lauren Valiente Steps Down
Neutral
Apr 10, 2025
On April 9, 2025, Lauren Valiente, a director at HCI Group, informed the chairman of the board of directors that she will not seek reelection. This decision marks a significant change in the board’s composition, potentially impacting the company’s governance and strategic direction.
Spark’s Take on HCI Stock
According to Spark, TipRanks’ AI Analyst, HCI is a Outperform.
HCI Group demonstrates strong financial performance with significant revenue growth and profitability but faces challenges with negative cash flows. Technical indicators show a positive momentum, though caution is advised due to overbought signals. Valuation is reasonable, and the company’s strategic moves and resilience in the face of natural disasters are commendable, contributing positively to its outlook.
To see Spark’s full report on HCI stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.