Erie Indemnity (ERIE)
NASDAQ:ERIE
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Erie Indemnity Company
(NASDAQ:ERIE)
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Rating:74Outperform
Price Target:
$281.00
▼(-11.19% Downside)
Action:ReiteratedDate:04/01/26
Overall score reflects strong underlying financial strength (very low leverage, solid profitability and cash flow) and a constructive earnings outlook with improved underwriting and shareholder returns. These positives are tempered by weak-to-neutral technical momentum (below key moving averages, negative MACD) and ongoing operational headwinds highlighted on the call (full-year combined ratio still above 100, retention/cost pressure).
Positive Factors
Conservative balance sheet and rising policyholder surplus
Erie’s near-zero leverage and materially expanded equity create durable financial flexibility, lowering solvency and liquidity risk. This conservatism supports capital deployment, dividend increases and capacity to absorb underwriting volatility over the next several quarters without forced asset sales or capital raises.
Negative Factors
Sustained underwriting pressure (combined ratio >100)
A full-year combined ratio above 100 signals underwriting losses before investment income, implying the business still faces structural margin headwinds. Even with Q4 improvement, elevated loss costs and catastrophe volatility could keep underwriting profitability constrained across several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet and rising policyholder surplus
Erie’s near-zero leverage and materially expanded equity create durable financial flexibility, lowering solvency and liquidity risk. This conservatism supports capital deployment, dividend increases and capacity to absorb underwriting volatility over the next several quarters without forced asset sales or capital raises.
Read all positive factors
Erie Indemnity Company (ERIE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.82B
Dividend Yield1.9%
Average Volume (3M)233.14K
Price to Earnings (P/E)23.9
Beta (1Y)0.39
Revenue Growth9.64%
EPS Growth15.87%
CountryUS
Employees6,715
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)1.21
Shares Outstanding46,189,068
10 Day Avg. Volume155,524
30 Day Avg. Volume233,144
Financial Highlights & Ratios
PEG Ratio-3.50
Price to Book (P/B)5.85
Price to Sales (P/S)3.28
P/FCF Ratio23.38
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue2.64
Enterprise Value/Gross Profit12.16
Enterprise Value/Ebitda15.78
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)14.01
Revenue Forecast (FY)$4.26B
Erie Indemnity Company Business Overview & Revenue Model
Company Description
Erie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. The company provides sales, underwriting, policy issuance, and renewal services for the policyholders on behalf...
How the Company Makes Money
ERIE primarily makes money by acting as the attorney-in-fact for the Exchange and earning a management fee (often referred to as a subscriber services fee) that is calculated as a percentage of the Exchange’s direct written premiums. This fee-base...
Erie Indemnity Company Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The call reflects a company in recovery: meaningful progress in underwriting metrics (notably a sharp Q4 combined ratio improvement), premium and average premium growth, stronger investment income, and increased policyholder surplus and shareholder returns. However, the business still faces notable headwinds—weather‑driven severity, an elevated full‑year combined ratio above 100, declines in policies in‑force and retention, expense growth that in places outpaced revenue, and a large $100 million charitable contribution that reduced reported net income. On balance, positives around restored rate adequacy, capital strength, product innovation and customer satisfaction are counterbalanced by remaining underwriting pressure and cost/retention challenges.Positive Updates
Direct Written Premium Growth
Direct written premiums grew ~5% in Q4 2025 year-over-year and almost 9% for the full year 2025 versus 2024, driven primarily by realization of prior rate actions.
Negative Updates
Net Income Decline in Q4 and Full Year Impacted by Charitable Contribution
Net income in Q4 2025 was over $63 million ($1.21 per diluted share) versus $152 million ($2.91) in Q4 2024; full year net income was over $559 million ($10.69) versus over $600 million ($11.48) in 2024. Results were impacted by a $100 million contribution to a newly established charitable foundation which reduced EPS by $1.54.
Read all updates
Q4-2025 Updates
Positive
Negative
Direct Written Premium Growth
Direct written premiums grew ~5% in Q4 2025 year-over-year and almost 9% for the full year 2025 versus 2024, driven primarily by realization of prior rate actions.
Read all positive updates
Company Guidance
The company’s guidance for 2026 centers on continuing to strengthen profitability, support disciplined growth, and invest in products and capabilities: management plans to roll out Erie Secure Auto to additional states in the first half of 2026 (after deployments in West Virginia in December and Virginia in February and a successful Ohio pilot), expand Business Auto 2.0 beyond the current 9 states with more releases expected before the end of Q1, and respond to market headwinds with targeted pricing adjustments and product enhancements while pursuing non‑core revenue opportunities via Erie Strategic Ventures (recent investments in Atomic and Feathery). That guidance is given against 2025 results showing direct written premiums up ~5% in Q4 and ~9% for the year, average premium per policy +9.6% for the year, policies‑in‑force down 1.1% but still above 7.0 million with retention at 88.4%; a Q4 combined ratio of 94.1% (vs. 105.7% prior year Q4) and full‑year combined ratio of 104.9% (vs. 110.4% in 2024) with catastrophe losses contributing 10.6 points for the year (0.7 pts in Q4); policyholder surplus rising from ~ $9.3 billion to ~ $10.1 billion; net income of over $63 million ($1.21 diluted EPS) in Q4 and over $559 million ($10.69 diluted EPS) for the year (impacted by a $100 million charitable contribution that reduced EPS by $1.54); operating income down ~$10 million (‑5.7%) in Q4 but up ~$41 million (+6%) for the year; investment income just over $24 million in Q4 and almost $85 million for the year; and shareholder returns including over $254 million of dividends paid in 2025 and a Board‑approved 7.1% increase in the quarterly dividend for 2026.Erie Indemnity Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.07B | 3.80B | 3.27B | 2.84B | 2.63B |
| Gross Profit | 640.80M | 676.46M | 520.26M | 376.21M | 318.10M |
| EBITDA | 787.39M | 766.34M | 600.23M | 428.41M | 351.22M |
| Net Income | 559.34M | 600.31M | 446.06M | 298.57M | 297.86M |
Balance Sheet | |||||
| Total Assets | 3.36B | 2.89B | 2.47B | 2.24B | 2.24B |
| Cash, Cash Equivalents and Short-Term Investments | 379.78M | 319.44M | 226.07M | 166.36M | 222.10M |
| Total Debt | 0.00 | 7.51M | 0.00 | 122.50M | 93.83M |
| Total Liabilities | 1.07B | 901.36M | 809.13M | 791.05M | 899.58M |
| Stockholders Equity | 2.28B | 1.99B | 1.66B | 1.45B | 1.34B |
Cash Flow | |||||
| Free Cash Flow | 570.97M | 486.40M | 288.56M | 298.95M | 253.99M |
| Operating Cash Flow | 686.66M | 611.25M | 381.20M | 366.15M | 402.79M |
| Investing Cash Flow | -439.33M | -226.91M | -157.56M | -106.92M | -185.49M |
| Financing Cash Flow | -199.85M | -230.00M | -221.68M | -300.84M | -194.84M |
Erie Indemnity Company Technical Analysis
Neutral
316.42
Price Trends
260.17
Negative
271.69
Negative
300.16
Negative
Market Momentum
-1.25
Negative
52.22
Neutral
80.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERIE, the sentiment is Neutral. The current price of 316.42 is above the 20-day moving average (MA) of 245.68, above the 50-day MA of 260.17, and above the 200-day MA of 300.16, indicating a neutral trend. The MACD of -1.25 indicates Negative momentum. The RSI at 52.22 is Neutral, neither overbought nor oversold. The STOCH value of 80.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ERIE.
Erie Indemnity Company Risk Analysis
Erie Indemnity Company disclosed 11 risk factors in its most recent earnings report. Erie Indemnity Company reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Erie Indemnity Company Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.82B | 23.87 | 25.30% | 1.90% | 9.64% | 15.87% | |
70 Outperform | $22.10B | 23.44 | 9.72% | 0.77% | 17.87% | -9.35% | |
69 Neutral | $54.90B | 45.10 | 6.50% | 1.01% | 17.17% | 19.12% | |
68 Neutral | $26.49B | 20.06 | 20.10% | 1.14% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $66.97B | 20.54 | 45.99% | 0.82% | 14.06% | 5.52% |
* Financial Sector Average
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Erie Indemnity Company Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Erie Indemnity Earnings Hit by One-Time Foundation Charge
Negative
Feb 23, 2026
Erie Indemnity Company reported on February 23, 2026, that full-year 2025 net income declined to $559.3 million, or $10.69 per diluted share, from $600.3 million, or $11.48 per share, in 2024, with fourth-quarter 2025 net income falling to $63.4 m...
Business Operations and StrategyExecutive/Board Changes
Erie Indemnity Announces CEO Retirement and Leadership Transition
Positive
Feb 20, 2026
Erie Insurance announced on February 20, 2026, that president and CEO Tim NeCastro will retire on December 31, 2026, concluding a 30-year career with the company and a decade in the top role. The board will launch an immediate search for his succe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.