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Hippo Holdings (HIPO)
NYSE:HIPO
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Hippo Holdings
(NYSE:HIPO)
Rating:55Neutral
Price Target:―
Positive Factors
Business growth
The IaaS business is experiencing impressive growth in part due to the rising trend of MGAs in the insurance space.
Financial performance
Hippo reported its first quarter of adjusted EBITDA profitability, signaling strong financial performance.
Future guidance
Hippo laid out 2025 guidance with expectations of 26% top-line growth and reaching net income profitability by the fourth quarter.
Negative Factors
Earnings decline
Hippo reported a first-quarter earnings decline as the LA wildfires contributed 51 points to the total company net loss ratio.
Profitability concerns
A Market Perform rating is maintained as there is a need for more consistent profitability and greater visibility into top-line growth.
Hippo Holdings (HIPO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$698.11M
Dividend YieldN/A
Average Volume (3M)223.28K
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth77.44%
EPS Growth85.53%
CountryUS
Employees478
SectorFinancial
Sector Strength79
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)-1.91
Shares Outstanding25,157,024
10 Day Avg. Volume266,987
30 Day Avg. Volume223,275
Financial Highlights & Ratios
PEG Ratio0.50
Price to Book (P/B)2.15
Price to Sales (P/S)0.00
P/FCF Ratio-170.21
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue0.43
Enterprise Value/Gross Profit1.93
Enterprise Value/Ebitda38.41
Forecast
1Y Price Target
$28.00Price Target Upside0.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Hippo Holdings Business Overview & Revenue Model
Company DescriptionHippo Holdings Inc. is a technology-driven home insurance company that leverages data and advanced technology to offer homeowners insurance. Founded to modernize the insurance experience, Hippo provides a user-friendly digital platform that simplifies obtaining home insurance, aiming to offer more comprehensive coverage, better prices, and a faster quote process. Hippo operates primarily in the insurance sector, providing coverage solutions tailored to meet the evolving needs of homeowners.
How the Company Makes MoneyHippo Holdings makes money primarily through underwriting homeowners insurance policies. The company generates revenue by collecting premiums from policyholders in exchange for providing insurance coverage. Hippo differentiates itself by using advanced data analytics and technology to assess risk and price policies more accurately than traditional insurers. Additionally, Hippo partners with reinsurers to manage its risk exposure, allowing it to share a portion of the premiums in exchange for risk transfer. The company may also earn revenue from investment income generated by investing the premiums it collects. Key factors contributing to Hippo's earnings include its ability to attract and retain policyholders, its underwriting expertise, the efficiency of its technology platform, and its strategic partnerships with reinsurers.
Hippo Holdings Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 13.45%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue and premium growth, operational efficiency improvements, and strategic capital raising efforts. However, these positive developments were offset by substantial losses and increased expenses due to the Los Angeles wildfires, leading to an increased net loss and adjusted EBITDA loss.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue grew 30% year-over-year to $110 million, driven by a 91% increase in insurance-as-a-service revenue and a 12% increase in Hippo Home Insurance Program (HHIP) revenue.
Significant Premium Growth
Hippo Homeowner's Insurance Program saw a 35% year-over-year increase in gross written premium from homebuilder partners. Written premium outside of HHIP increased by 21% year-over-year.
Operational Efficiency
Reduction in sales and marketing, technology and development, and general administrative expenses by $7 million or 18% year-over-year, leading to a decrease from 48% to 30% of revenue.
Capital Raise for Growth
Agreement to raise a $50 million surplus note to support growth without diluting equity, pending regulatory approval.
Negative Updates
Impact of Los Angeles Wildfires
The wildfires resulted in a significant increase in the HHIP gross and net loss ratios by 41 and 33 percentage points respectively, with $45 million in expenses related to the wildfires.
Increased Net Loss
Net loss increased by $12 million to $48 million compared to Q1 of last year, mainly due to expenses from the LA wildfires.
Adjusted EBITDA Loss
Adjusted EBITDA loss increased by $21 million to $41 million year-over-year, primarily due to wildfire-related expenses.
Company Guidance
During the first quarter of 2025, Hippo made significant progress in key business objectives, reporting a 35% year-over-year increase in gross written premium for its Hippo Homeowner's Insurance Program (HHIP). Despite the impact of the Los Angeles wildfires, which increased the HHIP gross loss ratio by 41 percentage points to 121%, the company achieved a 30% revenue growth to $110 million, driven by a 91% growth in the insurance-as-a-service segment. The company is on track to achieve a net profit by the end of 2025, with an annual revenue run rate exceeding $500 million. Hippo also plans to expand its new business and has raised a $50 million surplus note to further support growth, particularly within the Spinnaker platform. Operating expenses decreased by 18% year-over-year, contributing to an adjusted EBITDA loss of $41 million, affected by $45 million in wildfire-related expenses.Hippo Holdings Financial Statement Overview
Summary
Hippo Holdings shows strong revenue growth and improved operational efficiency, with a significant increase in EBIT margin. However, challenges in achieving net profitability persist, as indicated by ongoing net losses. The balance sheet is stable with no debt, but the company struggles to generate sufficient returns on equity. Positive cash flow changes are encouraging, yet past fluctuations highlight potential concerns. Enhancing profitability and cash flow stability is crucial for future financial health.Income Statement
Hippo Holdings has demonstrated notable revenue growth of 77.4% in 2024, reflecting robust top-line expansion. However, net profitability remains a challenge, with a negative net profit margin of -10.88% due to persistent losses. The EBIT margin has improved significantly to 58.98%, indicating better operational efficiency. Despite these improvements, the absence of EBITDA data limits comprehensive margin analysis.60
Neutral
Balance Sheet
The company maintains a strong equity base with an equity ratio of 23.47%, although this has decreased from previous years. The debt-to-equity ratio stands at 0, highlighting negligible leverage, which is beneficial in minimizing financial risk. However, the negative ROE of -11.18% signals inefficiency in generating returns for shareholders, impacting the balance sheet strength.50
Neutral
Cash Flow
The cash flow statement shows a positive turnaround in free cash flow, growing from a negative position in previous years to $47.2 million in 2024. The operating cash flow to net income ratio is robust at 1.17, indicating effective cash generation relative to net income. However, historical volatility in cash flows suggests potential sustainability risks.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 289.10M | 372.10M | 209.70M | 119.70M | 91.20M | 51.60M | Gross Profit |
| 289.10M | 372.10M | 209.70M | 119.70M | 91.20M | 51.60M | EBIT |
| -43.50M | -27.40M | -1.90M | -329.60M | -370.70M | -143.30M | EBITDA |
| 7.30M | -4.20M | 0.00 | -310.00M | -356.20M | -110.50M | Net Income Common Stockholders |
| -52.50M | -40.50M | -273.10M | -326.50M | -367.90M | -141.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 410.00M | 197.60M | 142.10M | 519.30M | 784.70M | 452.30M | Total Assets |
| 1.09B | 1.54B | 1.52B | 1.57B | 1.64B | 979.40M | Total Debt |
| 285.40M | 10.00M | 14.80M | 28.90M | 0.00 | 273.00M | Net Debt |
| -124.60M | -187.60M | -127.30M | -165.60M | -775.60M | -179.30M | Total Liabilities |
| 1.01B | 1.18B | 1.14B | 975.40M | 19.90M | 279.10M | Stockholders Equity |
| 74.30M | 362.10M | 377.90M | 589.90M | 859.60M | -199.60M |
| Cash Flow | Free Cash Flow | ||||
| -4.10M | 47.20M | -139.10M | -181.20M | -141.90M | -74.80M | Operating Cash Flow |
| -5.80M | 47.50M | -92.40M | -161.50M | -124.50M | -65.40M | Investing Cash Flow |
| -31.60M | 30.30M | 57.60M | -405.90M | -30.00M | -2.30M | Financing Cash Flow |
| -45.70M | -40.10M | -14.60M | -6.80M | 480.80M | 518.10M |
Hippo Holdings Technical Analysis
Positive
27.75
Price Trends
23.71
Positive
25.92
Positive
24.49
Positive
Market Momentum
0.95
Negative
72.13
Negative
92.61
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIPO, the sentiment is Positive. The current price of 27.75 is above the 20-day moving average (MA) of 23.90, above the 50-day MA of 23.71, and above the 200-day MA of 24.49, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 72.13 is Negative, neither overbought nor oversold. The STOCH value of 92.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.15B | 11.55 | 9.84% | 2.56% | -0.88% | -12.63% | |
72 Outperform | $863.93M | 18.28 | 16.89% | 3.29% | -2.51% | -22.68% | |
65 Neutral | $847.43M | 18.38 | 11.12% | 1.06% | 15.76% | 105.98% | |
64 Neutral | $12.83B | 9.78 | 7.78% | 16985.64% | 12.26% | -7.81% | |
59 Neutral | $377.71M | 12.75 | 11.69% | 0.94% | 15.22% | 19.19% | |
55 Neutral | $698.11M | ― | -15.58% | ― | 77.44% | 85.53% | |
47 Neutral | $312.46M | 62.14 | -2.23% | ― | 10.50% | -92.02% |
* Financial Sector Average
Performance Comparison
HIPO
Hippo Holdings
27.75
11.18
67.47%
AMSF
Amerisafe
45.35
6.26
16.01%
EIG
Employers Holdings
47.04
6.53
16.12%
ITIC
Investors Title Company
200.24
40.32
25.21%
AMBC
Ambac Financial
6.73
-6.31
-48.39%
TIPT
Tiptree Financial
23.22
6.47
38.63%
Hippo Holdings Corporate Events
Business Operations and Strategy
Hippo Holdings Terminates Palo Alto Lease Agreement
Neutral
Apr 18, 2025
On April 14, 2025, Hippo Analytics Inc. entered into a Second Amendment to Lease with Tallwood Forest, LLC, terminating their lease agreement for the property at 150 Forest Ave., Palo Alto, California. The company agreed to surrender the property and make a one-time lease termination payment of $1,438,411. Hippo Analytics is in the process of securing new office space in San Jose, CA, which is expected to lead to significant annual cost savings.
Spark’s Take on HIPO Stock
According to Spark, TipRanks’ AI Analyst, HIPO is a Neutral.
Hippo Holdings’ overall score of 62 reflects strong technical indicators and positive earnings call sentiment, offset by valuation concerns due to ongoing losses and a negative P/E ratio. The company shows promising revenue growth and operational improvements but faces challenges in achieving profitability. The stock’s technical outlook is stable, supporting a moderate investment potential.
To see Spark’s full report on HIPO stock, click here.
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.