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Heritage Insurance Holdings (HRTG)
NYSE:HRTG
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Heritage Insurance Holdings
(NYSE:HRTG)
74Outperform
Positive Factors
Earnings Performance
Heritage Insurance Holdings reported operating EPS of $0.61, beating both the analyst's estimate of $0.48 and the consensus of $0.41.
Profitability
The company now appears to be solidly profitable after several years of price increases and more recent moderating claims inflation.
Valuation
The stock is trading at approximately 100% of book value and 4.6 times forward earnings, suggesting an attractive valuation.
Negative Factors
Capital Constraints
Capital remains tight, as confirmed by the Board’s continued suspension of the quarterly dividend and the lack of any buyback activity.
Growth Limitations
Excess capital is limited, which could limit growth potential and increase wind season risk.
Peer Comparison
Shares of HRTG currently trade at about 1.0x tangible book value, compared to a peer median of 2.3x, indicating that the shares are fairly valued at current levels.
Heritage Insurance Holdings (HRTG) vs. S&P 500 (SPY)
Market Cap
$603.75M
Dividend YieldN/A
Average Volume (3M)368.73K
Price to Earnings (P/E)10.0
Beta (1Y)0.90
Revenue Growth11.41%
EPS Growth53.85%
CountryUS
Employees540
SectorFinancial
Sector Strength83
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.99
Shares Outstanding30,993,270
10 Day Avg. Volume411,604
30 Day Avg. Volume368,728
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 Cap0.85
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit0.63
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.50Price Target Upside-19.75% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Heritage Insurance Holdings Business Overview & Revenue Model
Company DescriptionHeritage Insurance Holdings, Inc. (HRTG) is a property and casualty insurance company based in the United States. It primarily operates in the homeowners insurance sector, providing residential insurance products to policyholders across several states. The company aims to offer comprehensive coverage options tailored to individual needs, ensuring protection against various risks including weather-related incidents and property damage.
How the Company Makes MoneyHeritage Insurance Holdings makes money primarily through the sale of insurance policies. The company collects premiums from policyholders, which serve as the main source of revenue. These premiums are calculated based on the risk profile of the insured property, the level of coverage required, and other factors such as location and claims history. Heritage Insurance also invests the premiums it collects in various financial instruments, generating investment income that contributes to its earnings. Additionally, the company partners with a network of independent agents and brokers to expand its reach and increase policy sales, further driving revenue growth.
Heritage Insurance Holdings Financial Statement Overview
Summary
Heritage Insurance Holdings displays strong revenue and profit growth with improved operational efficiency. The balance sheet reveals financial prudence with no debt and improved equity returns, yet potential leverage risks exist. Solid cash flow metrics underscore healthy liquidity and cash generation, though historical volatility should be monitored. Overall, the company is on a positive financial trajectory with some areas needing careful management.Income Statement
Heritage Insurance Holdings has shown strong revenue growth with a 11.1% increase in 2024 compared to 2023, and a significant improvement in profitability metrics. Gross profit margin stands at 100%, and net profit margin improved to 7.5% from 6.2% a year prior. EBIT and EBITDA margins also increased, indicating better operational efficiency. However, past volatility in EBIT and net income suggests potential risks in sustaining these margins.―
Balance Sheet
The company has a strong balance sheet with a notable absence of total debt in 2024, resulting in a sound debt-to-equity ratio of 0.00. The equity ratio is 11.8%, indicating a relatively low level of equity financing compared to total assets. Return on equity improved to 21.2% in 2024, reflecting better profitability. Despite these strengths, the low equity ratio points to potential risks related to leverage in the insurance industry.65
Cash Flow
Operating cash flow has grown significantly by 23.7% from 2023 to 2024, and free cash flow also showed healthy growth. The operating cash flow to net income ratio is 1.42, indicating robust cash generation relative to net earnings. Free cash flow to net income ratio is also strong at 1.42. However, fluctuations in past cash flows highlight potential volatility in cash generation.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 816.99M | 735.50M | 662.46M | 631.56M | 593.38M | Gross Profit |
| 816.99M | 735.50M | 662.46M | 631.56M | 593.38M | EBIT |
| 93.61M | 63.22M | -157.36M | -90.89M | -11.75M | EBITDA |
| 93.61M | 71.90M | -157.36M | -59.62M | 18.29M | Net Income Common Stockholders |
| 61.54M | 45.31M | -154.36M | -74.73M | 9.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 452.67M | 553.17M | 916.45M | 1.03B | 1.00B | Total Assets |
| 2.47B | 2.15B | 2.39B | 1.98B | 2.09B | Total Debt |
| 141.34M | 148.19M | 170.19M | 151.93M | 121.00M | Net Debt |
| -452.67M | -315.45M | -110.69M | -207.41M | -319.96M | Total Liabilities |
| 2.18B | 1.93B | 2.26B | 1.64B | 1.65B | Stockholders Equity |
| 290.80M | 220.28M | 131.04M | 343.05M | 442.34M |
| Cash Flow | Free Cash Flow | |||
| 87.09M | 60.52M | -46.64M | 59.12M | 169.46M | Operating Cash Flow |
| 87.09M | 70.42M | -34.26M | 60.13M | 170.21M | Investing Cash Flow |
| -91.60M | 100.81M | -37.86M | -124.48M | 22.06M | Financing Cash Flow |
| -5.19M | 14.55M | -5.06M | -17.28M | -28.90M |
Heritage Insurance Holdings Technical Analysis
Positive
24.30
Price Trends
15.40
Positive
13.53
Positive
12.84
Positive
Market Momentum
1.65
Negative
86.53
Negative
92.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRTG, the sentiment is Positive. The current price of 24.3 is above the 20-day moving average (MA) of 18.66, above the 50-day MA of 15.40, and above the 200-day MA of 12.84, indicating a bullish trend. The MACD of 1.65 indicates Negative momentum. The RSI at 86.53 is Negative, neither overbought nor oversold. The STOCH value of 92.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HRTG.
Heritage Insurance Holdings Risk Analysis
Heritage Insurance Holdings disclosed 37 risk factors in its most recent earnings report. Heritage Insurance Holdings 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
Heritage Insurance Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $721.91M | 11.23 | 16.95% | 2.50% | 7.24% | -9.28% | |
74 Outperform | $692.48M | 9.78 | 13.11% | 3.45% | 5.29% | 1200.44% | |
74 Outperform | $603.75M | 9.96 | 27.59% | ― | 11.41% | 53.85% | |
67 Neutral | $413.97M | 9.22 | 4.14% | 4.86% | -10.61% | -19.48% | |
64 Neutral | $12.51B | 9.81 | 7.92% | 16985.69% | 12.67% | -5.98% | |
56 Neutral | $558.93M | 7.39 | 37.69% | ― | 1.00% | -77.16% | |
46 Neutral | $253.97M | 51.06 | 2.47% | ― | -6.46% | ― |
* Financial Sector Average
Performance Comparison
HRTG
Heritage Insurance Holdings
24.30
15.99
192.42%
DGICA
Donegal Group
19.71
6.80
52.67%
GBLI
Global Indemnity
27.67
-3.21
-10.40%
UVE
Universal Insurance Holdings
25.31
5.70
29.07%
ACIC
American Coastal Insurance
11.63
1.30
12.58%
NODK
NI Holdings
12.39
-2.16
-14.85%
Heritage Insurance Holdings Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 22.54%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant net income growth and improved loss ratios, despite facing challenges such as increased catastrophe losses from California wildfires. The expansion of production capacity and positive legislative impacts in Florida are promising for future growth. However, the increased catastrophe losses and a decline in policy count pose challenges. Overall, the highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Strong Net Income Growth
Net income of $30.5 million, or $0.99 per diluted share, up from $14.2 million, or $0.47 per diluted share in the prior year, demonstrating strong financial performance despite catastrophe losses.
Improved Loss Ratio
Loss ratio improved by 7.2 points to 49.7% from 56.9% in the prior year quarter, indicating effective risk management and underwriting discipline.
Expansion of Production Capacity
Production capacity for new business increased from 30% to 75% by the end of April 2025, with plans to fully open by the end of the year, positioning the company for future growth.
Legislative Impacts in Florida
Positive legislative changes in Florida have reduced frivolous lawsuits, potentially improving the insurance market and reducing reinsurance pricing in 2026.
Reinsurance Program Stability
Maintained a stable indemnity-based reinsurance program with increased limit by $285 million, while costs rose by less than $8 million, showcasing effective cost management.
Book Value Per Share Increase
Book value per share increased to $10.62, up 11.8% from the fourth quarter of 2024, and up 38.5% from the first quarter of 2024, indicating strong shareholder value growth.
Negative Updates
Impact of California Wildfires
Incurred $31.8 million of net pre-tax losses related to California wildfires, highlighting vulnerability to environmental risks.
Increased Catastrophe and Weather Losses
Net weather and catastrophe losses for the first quarter were $43.5 million, an increase of $25.1 million from the prior year quarter, driven by California wildfires and other weather events.
Policy Count Decline
Policy count from the fourth quarter of 2024 is down 3%, primarily due to attrition and seasonality, which could impact revenue generation.
Company Guidance
In the first quarter of 2025, Heritage Insurance Holdings achieved a net income of $30.5 million, or $0.99 per diluted share, despite facing $31.8 million in net pre-tax losses due to California wildfires. This compares favorably to the previous year's first quarter net income of $14.2 million, or $0.47 per diluted share. The company's gross premiums earned increased by 3.6% to $353.8 million, while net premiums earned rose by 11.5% to $200 million. The loss ratio improved by 7.2 points to 49.7%, and the net combined ratio decreased by 9.5 points to 84.5%. Heritage successfully managed its exposure with a strategic focus on rate adequacy, resulting in a return on average equity of 39%. The company expects to grow its premiums in force in the latter half of 2025, aiming for continued profitable growth while maintaining underwriting discipline. Heritage is also expanding its production capacity, with 75% open by the end of April 2025, and plans to fully open by the year's end. Looking ahead, legislative changes in Florida are expected to positively impact pricing and reinsurance costs, potentially reducing reinsurance pricing in 2026.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.