HCI Group (HCI) AI Stock Analysis

• Market Cap: $2.16B
• Dividend Yield: 0.94%
• Average Volume (3M): 135.64K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.52
• Revenue Growth: 9.62%
• EPS Growth: -18.69%
• Country: US
• Employees: 552
• Sector: Financial
• Sector Strength: 76
• Industry: Insurance - Property & Casualty
• EPS (TTM): 5.18
• Shares Outstanding: 12,959,794
• 10 Day Avg. Volume: 117,214
• 30 Day Avg. Volume: 135,636
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 2.64
• Enterprise Value/Gross Profit: 4.45
• Enterprise Value/Ebitda: 8.69
• 1Y Price Target: $189.25
• Price Target Upside: 11.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 73 Outperform
• Price Target: $172.00 ▲(0.89% Upside)

HCI Group's overall stock score reflects strong earnings growth and strategic initiatives, supported by positive technical indicators. However, concerns about cash flow and a slightly overbought technical position temper the outlook. The company's proactive risk management through reinsurance is a positive strategic move.

Positive Factors

Earnings Growth

The earnings growth was driven by strong renewal of assumed Citizens policies, benign catastrophe weather losses, and favorable frequency trends in Florida.

Policy Assumptions

HCI entities have been approved for up to 75,000 policy assumptions, likely fueling further growth in the future.

Strategic Spin-off

HCI plans to split Exzeo off through an IPO, forming two separately traded public companies, which could unlock significant value for HCI shareholders.

Negative Factors

Growth Potential Not Fully Valued

The stock is currently trading at 8 times the 2025 EPS estimate, which may not fully account for potential growth.

Market Valuation

The stock is trading at 9 times the 2025 earnings estimate, which is believed to not take into account the near-term earnings growth.

Potential Underperformance

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 Business Overview & Revenue Model

Company Description

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

How the Company Makes Money

HCI Group generates revenue primarily through the underwriting of various insurance products, collecting premiums from policyholders in exchange for coverage against specified risks. A significant portion of its income is derived from property and casualty insurance premiums, where the company assesses risks and sets pricing accordingly. Additionally, HCI Group earns investment income from managing the premiums collected until claims are paid out, as well as from its real estate holdings and investments. The company may also benefit from strategic partnerships with other financial institutions and agents, enhancing its distribution channels and expanding its market reach, which contributes to its overall earnings.

HCI Group Financial Statement Overview

Summary

HCI Group shows strong revenue growth and improved profitability with a net profit margin of 17.00%. However, concerns arise from negative operating cash flow and declining free cash flow, which could impact future operations. The balance sheet indicates moderate leverage but 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.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	775.03M	749.45M	550.67M	491.99M	405.13M	274.08M
Gross Profit	459.73M	275.34M	528.04M	471.47M	386.07M	260.28M
EBITDA	235.35M	191.01M	136.95M	-52.64M	23.08M	57.41M
Net Income	144.11M	109.95M	79.03M	-58.51M	1.86M	27.58M
Balance Sheet
Total Assets	1.92B	2.23B	1.81B	1.80B	1.18B	941.31M
Cash, Cash Equivalents and Short-Term Investments	0.00	1.05B	770.50M	500.22M	671.53M	503.06M
Total Debt	15.60M	230.44M	209.90M	212.41M	62.71M	184.28M
Total Liabilities	1.13B	1.76B	1.39B	1.55B	762.40M	740.18M
Stockholders Equity	758.58M	453.33M	324.84M	162.60M	323.37M	201.14M
Cash Flow
Free Cash Flow	483.82M	327.76M	224.16M	-10.15M	93.19M	70.87M
Operating Cash Flow	485.84M	331.82M	230.66M	-12.00K	96.50M	77.31M
Investing Cash Flow	38.79M	-260.11M	4.27M	-434.54M	36.85M	143.22M
Financing Cash Flow	-23.27M	-75.17M	67.12M	41.07M	64.30M	-16.70M

HCI Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 170.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 170.48 is above the 20-day moving average (MA) of 156.56, above the 50-day MA of 148.36, and above the 200-day MA of 137.10, indicating a bullish trend. The MACD of 5.87 indicates Negative momentum. The RSI at 75.66 is Negative, neither overbought nor oversold. The STOCH value of 91.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HCI.

HCI Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HMN	82 Outperform	$1.87B	13.67	10.91%	2.99%	6.01%	72.52%
STC	77 Outperform	$2.04B	23.45	6.27%	2.84%	14.00%	100.44%
HCI	73 Outperform	$2.16B	15.03	23.90%	0.94%	9.62%	-18.69%
SKWD	73 Outperform	$1.96B	15.58	16.20%	―	22.20%	5.78%
Sector *	68 Neutral	$17.79B	11.64	10.28%	3.76%	9.64%	1.17%
ROOT	65 Neutral	$1.42B	18.68	27.52%	―	59.76%	―
PRA	64 Neutral	$1.22B	25.07	4.05%	―	-2.05%	―

HCI Group Corporate Events

HCI Group Announces New Director Compensation Plan

On July 21, 2025, HCI Group‘s compensation committee established a new compensation plan for its non-employee directors. This plan includes an annual payment of $100,000 in cash, distributed quarterly, and 750 restricted common shares, which cannot be transferred until May 22, 2026. Directors will retain dividend rights and ownership privileges during the restriction period.

HCI Group Holds Annual Shareholder Meeting on June 10

HCI Group held its Annual Meeting of Shareholders on June 10, 2025, where four key matters were voted upon. These included the election of two Class B directors, the ratification of FORVIS MAZARS, LLP as the independent accounting firm for 2025, and advisory votes on executive compensation and its voting frequency. Paresh Patel and Gregory Politis were elected as directors, and the appointment of the accounting firm was ratified. The advisory votes on executive compensation and its frequency were also addressed, reflecting shareholder engagement in corporate governance.

HCI Group Secures Comprehensive Reinsurance Program

HCI Group has secured a comprehensive reinsurance program for its subsidiaries and sponsored reciprocal insurers for the 2025-2026 treaty year, covering risks from hurricanes, tornados, and other catastrophes. The program involves three reinsurance towers, each tailored to specific regions and perils, with participation from multiple private reinsurers and the Florida Hurricane Catastrophe Fund. This strategic move ensures adequate coverage for catastrophic losses and reflects HCI’s proactive approach to risk management, potentially strengthening its market position and providing reassurance to stakeholders.