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Heritage Insurance Holdings (HRTG)
NYSE:HRTG
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Heritage Insurance Holdings
(NYSE:HRTG)
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Rating:72Outperform
Price Target:
$29.00
▲(10.43% Upside)
Heritage Insurance Holdings' strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. The undervaluation indicated by the low P/E ratio further supports the stock's attractiveness. Technical analysis shows a positive trend, though cash flow challenges present a risk. Overall, the stock is well-positioned with room for growth.
Positive Factors
Revenue Growth
Consistent revenue growth indicates successful strategic initiatives and market expansion, enhancing long-term earnings potential.
Improved Net Loss Ratio
A significantly improved net loss ratio reflects effective cost management and risk mitigation, supporting sustainable profitability.
Record In-Force Premiums
Record in-force premiums demonstrate successful strategic initiatives and market penetration, ensuring stable future revenue streams.
Negative Factors
Cash Flow Challenges
Declining free cash flow growth indicates potential liquidity issues, which may hinder investment in growth opportunities and financial flexibility.
Decline in Net Premiums Earned
A decline in net premiums earned suggests challenges in retaining revenue after reinsurance, which could impact profitability.
Increased Ceded Premium Ratio
An increased ceded premium ratio indicates higher reinsurance costs, which could pressure margins and reduce net income.
Heritage Insurance Holdings (HRTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$811.73M
Dividend YieldN/A
Average Volume (3M)275.43K
Price to Earnings (P/E)5.5
Beta (1Y)0.84
Revenue Growth5.92%
EPS Growth93.02%
CountryUS
Employees540
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.56
Shares Outstanding30,911,434
10 Day Avg. Volume199,446
30 Day Avg. Volume275,428
Financial Highlights & Ratios
PEG Ratio0.37
Price to Book (P/B)1.27
Price to Sales (P/S)0.45
P/FCF Ratio4.69
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit2.94
Enterprise Value/Ebitda3.99
Forecast
1Y Price Target
$35.50Price Target Upside35.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Heritage Insurance Holdings Business Overview & Revenue Model
Company DescriptionHeritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential property insurance for single-family homeowners and condominium owners, and rental property insurance in the states of Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia; commercial residential insurance for properties in Florida, New Jersey, and New York; and licensed in the state of Pennsylvania, as well as personal residential and wind-only property insurance. It also provides restoration, and emergency and recovery services; and property management, and reinsurance services. The company writes personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through eight wholesale agency relationships; and personal and commercial insurance policies through a network of approximately 70 independent agencies. Heritage Insurance Holdings, Inc. was founded in 2012 and is headquartered in Tampa, Florida.
How the Company Makes MoneyHeritage Insurance Holdings generates revenue primarily through the sale of insurance premiums. The company collects premiums from policyholders in exchange for coverage against various risks, which constitutes its main revenue stream. Additionally, HRTG benefits from investment income generated from the float of premiums collected before claims are paid out. The company may also engage in reinsurance arrangements to manage risk, which can provide further revenue opportunities. Strategic partnerships with agents and brokers help expand its distribution channels, enhancing market reach and customer acquisition. Overall, the combination of premium income, investment returns, and effective risk management practices contributes significantly to HRTG's earnings.
Heritage Insurance Holdings Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting significant growth in net income, record in-force premiums, and substantial new business growth. Key metrics such as the net loss ratio showed marked improvement. Although there were some challenges with a slight decline in net premiums earned and an increase in the ceded premium ratio, these were outweighed by the positive developments and strategic progress.Q3-2025 Updates
Positive Updates
Significant Increase in Net Income
The company achieved a net income of $50.4 million in the third quarter, a substantial increase from $8.2 million in the same quarter last year. For the first nine months, net income rose to $129 million from $41 million in 2024.
Record In-Force Premiums
In-force premiums reached an all-time record of $1.44 billion, up from approximately $1.1 billion four years ago, reflecting successful strategic initiatives.
New Business Growth
New business premium written was $36 million, an increase of 166% compared to $13.7 million in the third quarter of last year. Growth was seen in multiple regions, including Florida, Virginia, Hawaii, and New York.
Improved Net Loss Ratio
The net loss ratio improved by 27.1 points to 38.3%, compared to 65.4% in the same quarter last year, due to lower net loss and loss adjustment expenses.
Share Repurchase Program
The company restarted its share repurchase program, buying back 106,000 shares for $2.3 million, reflecting confidence in the company's valuation.
Increase in Book Value Per Share
Book value per share increased to $14.15, up 49% from the fourth quarter of 2024 and 56% from the third quarter of 2024.
Negative Updates
Decline in Net Premiums Earned
Net premiums earned decreased by 1.9% from $198.8 million to $195.1 million due to increased ceded premiums.
Ceded Premium Ratio Increase
The ceded premium ratio increased to 46.1% from 43.9% in the previous year, primarily due to a $4 million reinstatement premium for Hurricane Ian.
Company Guidance
During the Heritage Insurance Holdings Third Quarter 2025 Earnings Conference Call, the company provided optimistic guidance driven by strategic initiatives and strong financial performance metrics. The company reported a significant increase in net income to $50.4 million, or $1.63 per diluted share, compared to $8.2 million, or $0.27 per diluted share, in the same quarter last year. This rise was primarily attributed to a reduction in losses and loss adjustment expenses. Gross premiums earned increased to $362 million, reflecting strategic rate actions and organic growth, while net premiums earned declined slightly due to increased ceded premiums. The net loss ratio improved dramatically by 27.1 points to 38.3%, driven by lower net loss and LAE, and the net combined ratio improved to 72.9%, down from 100.6% in the prior year. The company anticipates policy growth to resume in 2026, supported by a strong capital position and a planned expansion of their market presence, including a strategic focus on Florida and opportunities outside the state. Heritage also noted a reinstatement of their share repurchase program, buying back 106,000 shares for $2.3 million in the third quarter.Heritage Insurance Holdings Financial Statement Overview
Summary
Heritage Insurance Holdings shows strong profitability and revenue growth, with efficient operational margins. The balance sheet indicates improved leverage and strong returns on equity. However, cash flow challenges, particularly in free cash flow growth, pose potential risks.Income Statement
Heritage Insurance Holdings has demonstrated strong revenue growth with a TTM increase of 7.3%. The company maintains a healthy gross profit margin of 24.9% and a net profit margin of 17.7%, indicating efficient cost management and profitability. The EBIT and EBITDA margins are robust at 24.8% and 25.1%, respectively, showcasing operational efficiency. However, the significant drop in gross profit margin from 2024 to TTM suggests potential volatility in cost structure.Balance Sheet
The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.23 in the TTM period, down from 0.49 in 2024, indicating improved leverage. Return on equity is strong at 41.4%, suggesting effective use of equity to generate profits. However, the equity ratio is not provided, limiting a full assessment of asset financing.Cash Flow
Cash flow analysis reveals challenges with a significant decline in free cash flow growth rate at -481% in the TTM period. The operating cash flow to net income ratio is not calculable due to zero net income, indicating potential cash flow issues. However, the free cash flow to net income ratio is strong at 97.7%, suggesting effective cash conversion from profits.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 842.28M | 816.99M | 735.50M | 662.46M | 631.56M | 593.38M |
| Gross Profit | 300.75M | 178.75M | 141.76M | 4.99M | 58.22M | 91.72M |
| EBITDA | 221.11M | 103.16M | 71.90M | -149.00M | -59.62M | 18.29M |
| Net Income | 149.21M | 61.54M | 45.31M | -154.36M | -74.73M | 9.33M |
Balance Sheet | ||||||
| Total Assets | 2.37B | 2.47B | 2.12B | 2.39B | 1.98B | 2.09B |
| Cash, Cash Equivalents and Short-Term Investments | 666.38M | 544.00M | 553.17M | 394.56M | 1.03B | 1.00B |
| Total Debt | 101.66M | 141.34M | 148.19M | 160.19M | 151.93M | 129.15M |
| Total Liabilities | 1.93B | 2.18B | 1.90B | 2.26B | 1.64B | 1.65B |
| Stockholders Equity | 437.25M | 290.80M | 220.28M | 131.04M | 343.05M | 442.34M |
Cash Flow | ||||||
| Free Cash Flow | 109.79M | 78.86M | 60.52M | -46.64M | 59.12M | 169.46M |
| Operating Cash Flow | 112.35M | 87.09M | 70.42M | -34.26M | 60.13M | 170.21M |
| Investing Cash Flow | -18.86M | -91.60M | 100.81M | -37.86M | -124.48M | 22.06M |
| Financing Cash Flow | -40.66M | -5.19M | 14.55M | -5.06M | -17.28M | -28.90M |
Heritage Insurance Holdings Technical Analysis
Neutral
26.26
Price Trends
27.83
Negative
25.96
Positive
23.43
Positive
Market Momentum
-0.11
Positive
37.78
Neutral
19.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRTG, the sentiment is Neutral. The current price of 26.26 is below the 20-day moving average (MA) of 28.76, below the 50-day MA of 27.83, and above the 200-day MA of 23.43, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 37.78 is Neutral, neither overbought nor oversold. The STOCH value of 19.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HRTG.
Heritage Insurance Holdings Risk Analysis
Heritage Insurance Holdings disclosed 37 risk factors in its most recent earnings report. Heritage Insurance 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
Heritage Insurance Holdings Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $1.12B | 12.78 | 9.97% | 4.59% | 13.35% | 16.56% | |
72 Outperform | $811.73M | 5.48 | 41.64% | ― | 5.92% | 93.02% | |
71 Outperform | $912.90M | 8.44 | 13.21% | 1.73% | 12.22% | 120.73% | |
70 Outperform | $831.37M | 7.00 | 27.34% | 2.18% | 4.61% | 73.40% | |
69 Neutral | $707.40M | 8.09 | 15.10% | 3.51% | 0.93% | 224.95% | |
69 Neutral | $543.73M | 6.54 | 29.35% | ― | 16.34% | -1.26% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
HRTG
Heritage Insurance Holdings
26.45
14.67
124.53%
DGICA
Donegal Group
19.78
5.58
39.30%
SAFT
Safety Insurance Group
76.45
-0.14
-0.18%
UFCS
United Fire Group
35.69
9.17
34.56%
UVE
Universal Insurance Holdings
30.98
11.88
62.20%
ACIC
American Coastal Insurance
11.33
-0.26
-2.24%
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.