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Hagerty Inc Class A (HGTY)
NYSE:HGTY
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Hagerty Inc Class A (HGTY) AI Stock Analysis

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HGTY

Hagerty Inc Class A

(NYSE:HGTY)

Rating:74Outperform
Price Target:
$12.50
▲(16.06% Upside)
Hagerty Inc Class A's overall stock score is driven by strong earnings performance and positive technical indicators. The company's financial health is solid, though cash flow management needs improvement. The high P/E ratio suggests the stock is expensive, which may deter value investors.

Hagerty Inc Class A (HGTY) vs. SPDR S&P 500 ETF (SPY)

Hagerty Inc Class A Business Overview & Revenue Model

Company DescriptionHagerty Inc Class A (HGTY) is a specialty insurance provider that focuses on classic and collectible vehicles. The company offers a range of insurance products tailored to the needs of classic car enthusiasts, including coverage for vintage cars, classic motorcycles, and collector vehicles. In addition to insurance, Hagerty provides membership-based services that offer automotive enthusiasts access to exclusive events, publications, and resources that cater to their passion for classic cars.
How the Company Makes MoneyHagerty Inc generates revenue primarily through the sale of insurance policies for classic and collectible vehicles. The company earns premiums from policyholders who seek specialized coverage for their valuable automotive assets. Additionally, Hagerty benefits from membership fees associated with its Hagerty Drivers Club, which offers automotive enthusiasts a range of benefits, including roadside assistance, access to unique events, and subscription to the Hagerty magazine. The company's partnerships with automotive clubs, events, and other organizations in the classic car community also contribute to its earnings by expanding its reach and enhancing its brand presence in the marketplace.

Hagerty Inc Class A Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q2-2025)
|
% Change Since: 7.49%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance with significant revenue and profitability growth, successful international expansion, and strategic developments that enhance Hagerty's future profitability. However, there were minor challenges with premium growth being slightly below expectations and increased costs related to technology and marketplace expansion.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue increased by 18% in the second quarter of 2025 to $369 million, driven by an 11% increase in Written Premium and a 12% growth in Commission revenue.
Significant Profitability Improvements
Operating margins increased by 210 basis points, resulting in a net income gain of 46% and adjusted EBITDA growth of 28% in the first half of 2025.
Successful European Expansion
Hagerty launched its European auction business, achieving a 78% sell-through rate at its inaugural Villa d'Este auction and announcing two additional auctions in Belgium and Switzerland.
New Fronting Arrangement with Markel
Hagerty signed an LOI to move to a new fronting arrangement with Markel, allowing Hagerty to control 100% of the premium and risk starting in 2026, which will result in increased profitability.
Positive Membership and Marketplace Revenue
Membership, marketplace, and other revenue jumped 68% due to higher inventory sales and the launch of the European auction business.
Negative Updates
Below Expected Premium Growth
Premium growth in the first half of 2025 was slightly below expectations, affected by intentional growth deemphasis in certain markets like California and New York.
Technology and Marketplace Costs
Increased technology spending of $15 million for a new platform and $5 million for marketplace expansion caused a temporary pinch in profitability.
Company Guidance
During the Hagerty Second Quarter 2025 Earnings Conference Call, leadership highlighted robust growth metrics, with total revenue increasing by 18% and new business count contributing to an 11% rise in Written Premium. Membership, marketplace, and other revenues surged by 68%, aided by higher inventory sales and the launch of a European auction business. Operating margins improved by 210 basis points, resulting in a 46% increase in net income and 28% growth in adjusted EBITDA. Strategic priorities for 2025 were centered on expanding specialty insurance offerings, simplifying and integrating the membership experience, and broadening the marketplace business internationally. The company also announced a new fronting arrangement with Markel, allowing Hagerty to control 100% of the premium and risk from 2026, enhancing profitability with additional underwriting and investment income.

Hagerty Inc Class A Financial Statement Overview

Summary
Hagerty Inc Class A demonstrates solid financial health with consistent revenue growth and improved profitability margins. The balance sheet reflects reduced leverage and enhanced return on equity, contributing to financial stability. However, the decline in free cash flow growth and moderate cash flow ratios highlight areas for improvement in cash management.
Income Statement
78
Positive
Hagerty Inc Class A has shown consistent revenue growth, with a TTM revenue growth rate of 4.58%. The company maintains a strong gross profit margin of 80.52% and a healthy net profit margin of 5.79% in the TTM period. EBIT and EBITDA margins have improved over the years, indicating better operational efficiency. However, the net profit margin, while improved, remains modest, suggesting room for further profitability enhancement.
Balance Sheet
72
Positive
The company's debt-to-equity ratio has significantly improved to 0.24 in the TTM period, reflecting reduced leverage and better financial stability. Return on equity has surged to 47.89%, indicating strong profitability relative to shareholder equity. The equity ratio is moderate, suggesting a balanced capital structure. However, past high leverage levels pose a potential risk if not managed carefully.
Cash Flow
65
Positive
Hagerty Inc Class A's cash flow performance shows mixed results. The operating cash flow to net income ratio is 0.13, indicating moderate cash generation relative to net income. Free cash flow has decreased by 6.34% in the TTM period, which could be a concern for future investments and debt servicing. The free cash flow to net income ratio remains strong at 86.26%, suggesting efficient cash conversion from profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.31B1.20B1.01B829.49M576.54M499.55M
Gross Profit1.06B978.58M574.20M540.88M404.64M271.02M
EBITDA160.35M132.59M69.04M0.00-32.46M27.65M
Net Income75.89M17.02M20.23M4.08M-61.35M10.17M
Balance Sheet
Total Assets2.04B1.71B1.59B1.31B1.04B610.71M
Cash, Cash Equivalents and Short-Term Investments259.63M232.84M108.33M95.17M275.33M38.11M
Total Debt194.29M154.86M181.14M196.61M135.50M69.00M
Total Liabilities1.46B1.19B1.09B945.15M771.07M493.39M
Stockholders Equity172.28M150.32M175.54M59.25M-323.78M117.20M
Cash Flow
Free Cash Flow131.53M155.68M107.30M10.95M-1.09M46.32M
Operating Cash Flow152.48M177.02M133.71M55.33M42.28M84.57M
Investing Cash Flow-170.47M-618.56M-52.65M-91.52M-68.99M-47.39M
Financing Cash Flow33.34M-46.92M103.16M-28.08M332.07M39.95M

Hagerty Inc Class A Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.77
Price Trends
50DMA
10.25
Positive
100DMA
9.71
Positive
200DMA
9.99
Positive
Market Momentum
MACD
0.24
Negative
RSI
54.78
Neutral
STOCH
74.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGTY, the sentiment is Positive. The current price of 10.77 is above the 20-day moving average (MA) of 10.69, above the 50-day MA of 10.25, and above the 200-day MA of 9.99, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 54.78 is Neutral, neither overbought nor oversold. The STOCH value of 74.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HGTY.

Hagerty Inc Class A Risk Analysis

Hagerty Inc Class A disclosed 67 risk factors in its most recent earnings report. Hagerty Inc Class A 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

Hagerty Inc Class A Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$3.24B21.9922.45%52.60%50.69%
79
Outperform
$4.08B10.4521.56%1.70%14.93%22.19%
74
Outperform
$3.74B53.2612.70%17.25%-11.72%
68
Neutral
$1.34B18.2527.52%59.76%
67
Neutral
¥850.22B13.139.24%2.97%7.76%9.30%
58
Neutral
$3.38B10.1512.21%2.36%2.75%572.22%
55
Neutral
$4.23B-35.10%22.91%4.95%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HGTY
Hagerty Inc Class A
10.77
-0.63
-5.53%
MCY
Mercury General
75.97
15.52
25.67%
KMPR
Kemper
53.40
-7.25
-11.95%
PLMR
Palomar Holdings
126.87
29.48
30.27%
LMND
Lemonade
56.10
38.76
223.53%
ROOT
Root
88.09
43.33
96.81%

Hagerty Inc Class A Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Hagerty Inc Class A Announces Secondary Offering Pricing
Neutral
Aug 11, 2025

On August 7, 2025, Hagerty, Inc. announced the pricing of its upsized secondary offering of 9,700,000 shares of Class A Common Stock at $9.34 per share, with the offering closing on August 11, 2025. The selling stockholders, Hagerty Holding Corp. and Aldel LLC, will not pass proceeds to Hagerty, as they will use the net proceeds to redeem shares for the benefit of Kim Hagerty’s estate. The offering, managed by Keefe, Bruyette & Woods and J.P. Morgan, highlights Hagerty’s strategic financial maneuvers but does not directly impact its operational cash flow.

Private Placements and FinancingBusiness Operations and Strategy
Hagerty Inc Announces Secondary Public Offering
Neutral
Aug 6, 2025

On August 6, 2025, Hagerty, Inc. announced a secondary public offering of 8,700,000 shares of its Class A Common Stock, facilitated by Aldel LLC and Hagerty Holding Corp. While Hagerty will not receive proceeds from this sale, the offering is intended to benefit the estate of Kim Hagerty through a redemption of shares. The announcement underscores Hagerty’s strategic financial maneuvers and may influence its market positioning and stakeholder interests.

Business Operations and StrategyFinancial Disclosures
Hagerty Inc Reports Strong Q2 2025 Financial Growth
Positive
Aug 4, 2025

On August 4, 2025, Hagerty Inc announced its tenth consecutive quarter of profitable growth, with a significant revenue increase of 18% to $688 million and a net income rise of 46% to $74 million in the first half of 2025. The company highlighted its expansion in the auction business through Broad Arrow Auctions, which has become the second-largest auction house in the premium segment globally. Notable events include successful auctions in Europe and an upcoming auction in the United States, showcasing Hagerty’s strategic growth and market leadership in the classic car industry.

Business Operations and StrategyRegulatory Filings and Compliance
Hagerty Inc Announces Fronting Arrangement with Markel
Positive
Jul 24, 2025

On July 24, 2025, Hagerty, Inc. announced a non-binding letter of intent for a proposed fronting arrangement with Markel Group Inc., expected to be effective on January 1, 2026. This arrangement will allow Hagerty to assume 100% of the underwriting and investment economics, enhancing profitability and operational control without disrupting policyholders. The agreement, subject to regulatory approval, marks an evolution of Hagerty’s partnership with Markel, with the company anticipating increased administrative responsibilities and a decrease in fronting fees based on policy volume.

Executive/Board ChangesShareholder Meetings
Hagerty Inc. Elects Directors and Ratifies Auditor
Neutral
Jun 6, 2025

On June 3, 2025, Hagerty, Inc. held its Annual Meeting of Stockholders where directors were elected for a one-year term, and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025 was ratified. The election of directors and the ratification of the accounting firm are expected to support the company’s governance and financial oversight, potentially impacting its operational stability and stakeholder confidence.

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.Date of analysis: Aug 19, 2025