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Hippo Holdings (HIPO)
NYSE:HIPO
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Hippo Holdings
(NYSE:HIPO)
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Select Model
Rating:63Neutral
Price Target:
$32.00
▲(5.40% Upside)
Action:ReiteratedDate:12/09/25
Hippo Holdings shows strong earnings call performance and strategic growth initiatives, but faces challenges in cash flow management and technical indicators. The stock's undervaluation offers potential upside, but bearish momentum suggests caution.
Positive Factors
Revenue Growth
The significant premium growth indicates strong market demand and effective sales strategies, supporting long-term revenue expansion.
Strategic Diversification
Diversification into casualty and commercial lines reduces reliance on homeowners insurance, enhancing resilience against market fluctuations.
Leadership Enhancement
Strengthened leadership with experienced members supports strategic growth, innovation, and improved risk management capabilities.
Negative Factors
Cash Flow Challenges
Persistent cash flow issues can limit operational flexibility and investment capacity, potentially hindering long-term growth.
Homeowners Premium Contraction
Contraction in homeowners premiums due to underwriting discipline may impact short-term revenue, highlighting competitive pressures.
Competition in E&S Market
Rising competition in the E&S market could pressure margins and limit growth in this segment, affecting overall profitability.
Hippo Holdings (HIPO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$728.64M
Dividend YieldN/A
Average Volume (3M)163.26K
Price to Earnings (P/E)13.4
Beta (1Y)1.33
Revenue Growth34.48%
EPS GrowthN/A
CountryUS
Employees478
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.23
Shares Outstanding25,335,178
10 Day Avg. Volume117,631
30 Day Avg. Volume163,257
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)1.83
Price to Sales (P/S)1.78
P/FCF Ratio14.01
Enterprise Value/Market Cap0.66
Enterprise Value/Revenue1.06
Enterprise Value/Gross Profit11.10
Enterprise Value/Ebitda4.37
Forecast
1Y Price Target
$34.00Price Target Upside11.99% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)0.13
Revenue Forecast (FY)$578.65M
Hippo Holdings Business Overview & Revenue Model
Company DescriptionHippo Holdings Inc. provides home protection insurance in the United States and the District of Columbia. Its insurance products include homeowners' insurance against risks of fire, wind, and theft; and commercial and personal lines of products. The company distributes insurance products and services through its technology platform; and offers its policies online, over the phone, or through licensed insurance agents. It provides care and protection for homeowners, as well as operates an integrated home protection platform. The company is headquartered in Palo Alto, California.
How the Company Makes MoneyHippo Holdings generates revenue primarily through the sale of home insurance policies. The company's revenue model is based on underwriting premiums from policyholders, which are collected on an annual or monthly basis. Key revenue streams include direct premiums written, which reflect the total amount of insurance premiums collected from customers, as well as investment income from the reserves held to cover potential claims. Additionally, Hippo may engage in partnerships with real estate platforms and agents, enhancing its distribution channels and customer acquisition strategies. The company's innovative use of technology for efficient claims management and customer service also contributes to its competitive advantage, potentially leading to increased customer retention and policy renewals.
Hippo Holdings Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and strategic picture: strong top-line growth (GWP +24% to >$1.1B), impressive expansion in casualty and commercial multi-peril, meaningful improvements in loss and expense ratios, and constructive 2026 guidance including a materially higher adjusted net income target. Offsetting this progress are persistent GAAP underwriting losses (113% combined ratio for the year), a continued homeowner book contraction during the repositioning, wildfire-related catastrophe impacts and some program-level underperformance. Overall, management conveyed confidence in diversification, underwriting improvements, and profitability targets while acknowledging areas of ongoing transition and risk.Q4-2025 Updates
Positive Updates
Record Annual Gross Written Premium
Generated over $1.1 billion of gross written premium in 2025, up 24% year over year — the first time exceeding $1.1B.
Strong Quarterly Top-Line Growth
Q4 gross written premium grew 40% year over year to $288 million, driven by commercial and casualty lines.
Material Growth in Commercial Lines
Commercial multi-peril GWP increased 75% year over year to $265 million (24% of 2025 GWP); casualty GWP increased 92% year over year to $264 million (24% of 2025 GWP).
Improved Underwriting and Loss Performance
Full-year net loss ratio improved 17 percentage points to 60%; non-cat loss ratio improved 11 points to 45%; cat loss ratio improved 6 points to 15%. Net combined ratio improved 25 points year over year to 113% for the full year, and Q4 net combined ratio improved 8 points to 99.4%.
Profitability and Earnings Improvement
Full-year net income attributable to Hippo was $58 million ($2.22 per diluted share), a $98 million improvement year over year. Q4 adjusted net income grew 20% year over year to $18 million ($0.67 per diluted share); full-year adjusted net income was $18 million ($0.68 per diluted share), a $38 million improvement year over year.
Portfolio Diversification Progress
Homeowners’ share of GWP declined to 34% in 2025 from 47% in 2024, reflecting growth in renters, casualty and commercial multi-peril and a more balanced premium mix.
Balance Sheet Strength
Total shareholders' equity at year-end was $436 million ($16.97 per share), up 17% from $362 million ($14.56 per share) at year-end 2024.
Positive 2026 Guidance
Company guides 2026 GWP growth of 27%–36% to $1.4B–$1.5B, NWP growth of 19%–28% to $500M–$540M, net combined ratio improving 8–10 points to 103%–105%, and adjusted net income of $45M–$55M (vs $18M in 2025).
Negative Updates
Homeowners Decline and Channel Reset
Homeowners GWP fell ~10% for 2025 to $379 million and declined 5% in Q4; homeowners net written premium was down 17% for the year (3% in the quarter). Homeowners share of GWP dropped materially to 34% from 47%.
Underwriting Still Loss-Making on GAAP Basis
Despite improvements, the full-year net combined ratio remained 113%, indicating continued underwriting losses on a GAAP combined-ratio basis.
Q4 GAAP Net Income Impacted by Prior-Year Gain
Q4 net income attributable to Hippo was $6 million ($0.23 per diluted share) vs $44 million ($1.71) in prior-year quarter — primarily due to a $46 million prior-year gain from the sale of a majority stake in First Connect, which reduced year-over-year GAAP comparability.
Increased Q4 Expense Ratio From Transaction
Q4 net expense ratio increased 4 percentage points year over year to 53.5%, driven by the sale of the homebuilder distribution network (prior-year quarter benefited from ~5 points of agency profit).
Catastrophe and Reserve Pressure
Severe California wildfires in early 2025 contributed to loss experience and first-quarter operating losses; Q4 reserve development included one large adverse homeowners liability loss while the full year saw about $10 million of reserve releases.
Program Performance Variability
Of 38 programs, some did not perform as expected and were placed into runoff; casualty retention remained low at ~3% for 2025 (intent to increase selectively), indicating cautious exposure to tail risk.
Adjusted Net Income Level Still Modest
Although improved, full-year adjusted net income was $18 million — modest relative to revenue and the company's longer-term targets, necessitating reliance on 2026 guidance to reach stated 2028 goals.
Company Guidance
Management guided 2026 GWP to grow 27–36% to $1.4–$1.5 billion (vs. >$1.1B in 2025) and net written premium to rise 19–28% to $500–$540 million (2025: $422M); they expect net combined ratio to improve 8–10 points to 103–105% (2025: 113%), assuming a 13% catastrophe loss ratio (vs. 15% in 2025), and forecast adjusted net income of $45–$55 million for 2026 (vs. $18M in 2025) while no longer providing GAAP net income guidance; they also expect stock‑based compensation plus depreciation & amortization of ~ $41M in 2026 (down from $50M in 2025), and reiterated longer‑term 2028 targets of > $2.0B GWP, $125M adjusted net income, and an 18% adjusted ROE.Hippo Holdings Financial Statement Overview
Summary
Hippo Holdings shows positive revenue growth and improved profitability, with strong EBIT and EBITDA margins. However, cash flow challenges persist, with negative operating and free cash flow, indicating a need for better cash management.Income Statement
Hippo Holdings shows a positive revenue growth rate of 5.91% TTM, indicating a recovery from previous periods. The net profit margin has improved significantly to 21.31% TTM, reflecting enhanced profitability. However, the gross profit margin remains low at 6.44% TTM, suggesting cost management challenges. The EBIT and EBITDA margins are strong at 23.02% and 24.31% TTM, respectively, indicating operational efficiency improvements.65
Positive
Balance Sheet
The company maintains a low debt-to-equity ratio of 0.13 TTM, indicating prudent financial leverage. Return on equity has improved to 26.66% TTM, showcasing effective use of equity capital. However, the equity ratio is not explicitly provided, but the overall balance sheet reflects a stable financial position with manageable debt levels.70
Positive
Cash Flow
Cash flow performance is concerning, with negative operating cash flow and free cash flow TTM. The free cash flow growth rate is negative, indicating cash flow challenges. The free cash flow to net income ratio is high at 4.75 TTM, suggesting reliance on non-operational sources for cash flow.45
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 450.10M | 372.10M | 209.70M | 119.70M | 91.20M | 51.60M |
| Gross Profit | 43.10M | 74.30M | -83.40M | -59.40M | -14.70M | 16.60M |
| EBITDA | 109.40M | -4.20M | -242.70M | -310.00M | -157.30M | -110.50M |
| Net Income | 95.90M | -40.50M | -273.10M | -333.40M | -371.40M | -141.50M |
Balance Sheet | ||||||
| Total Assets | 1.87B | 1.54B | 1.52B | 1.57B | 1.64B | 979.40M |
| Cash, Cash Equivalents and Short-Term Investments | 272.20M | 197.60M | 490.90M | 640.40M | 784.70M | 452.30M |
| Total Debt | 53.20M | 10.00M | 14.80M | 28.90M | 0.00 | 273.00M |
| Total Liabilities | 1.45B | 1.18B | 1.14B | 975.40M | 781.00M | 1.18B |
| Stockholders Equity | 421.50M | 362.10M | 377.90M | 589.90M | 859.60M | -199.60M |
Cash Flow | ||||||
| Free Cash Flow | -1.90M | 47.20M | -139.10M | -181.20M | -141.90M | -74.80M |
| Operating Cash Flow | -400.00K | 47.50M | -92.40M | -161.50M | -124.50M | -65.40M |
| Investing Cash Flow | 42.30M | 30.30M | 57.60M | -405.90M | -30.00M | -2.30M |
| Financing Cash Flow | -600.00K | -40.10M | -14.60M | -6.80M | 480.80M | 518.10M |
Hippo Holdings Technical Analysis
Negative
30.36
Price Trends
30.00
Negative
31.91
Negative
30.67
Negative
Market Momentum
-0.50
Negative
47.67
Neutral
38.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIPO, the sentiment is Negative. The current price of 30.36 is above the 20-day moving average (MA) of 28.75, above the 50-day MA of 30.00, and below the 200-day MA of 30.67, indicating a neutral trend. The MACD of -0.50 indicates Negative momentum. The RSI at 47.67 is Neutral, neither overbought nor oversold. The STOCH value of 38.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HIPO.
Hippo Holdings Risk Analysis
Hippo Holdings disclosed 75 risk factors in its most recent earnings report. Hippo 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
Hippo Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $435.84M | 12.43 | 13.12% | 4.20% | 13.47% | 26.15% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $728.64M | 13.45 | 25.65% | ― | 34.48% | ― | |
63 Neutral | $615.61M | 13.17 | 16.95% | 6.64% | -1.73% | -18.36% | |
63 Neutral | $644.14M | 15.01 | 10.46% | 1.31% | 4.44% | 22.40% | |
59 Neutral | $929.51M | 90.07 | 5.86% | 2.94% | 1.69% | -52.43% |
* Financial Sector Average
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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.