Mercury General (MCY) AI Stock Analysis

• Market Cap: $4.38B
• Dividend Yield: 1.61%
• Average Volume (3M): 263.86K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.89
• Revenue Growth: 14.93%
• EPS Growth: 22.19%
• Country: US
• Employees: 4,200
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 2.67
• Shares Outstanding: 55,388,626
• 10 Day Avg. Volume: 193,488
• 30 Day Avg. Volume: 263,855
• 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: 0.99
• Enterprise Value/Revenue: 0.75
• Enterprise Value/Gross Profit: 2.26
• Enterprise Value/Ebitda: 7.56
• 1Y Price Target: $88.50
• Price Target Upside: 11.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 79 Outperform
• Price Target: $87.00 ▲(10.08% Upside)

Mercury General's strong technical momentum and solid financial performance are the primary drivers of its stock score. While valuation metrics are favorable, the lack of recent earnings call data limits insights into future guidance and sentiment.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategy, supporting long-term financial stability.

Cash Generation

Strong cash generation enhances financial flexibility, enabling investment in growth opportunities and resilience in economic downturns.

Debt Management

A stable debt-to-equity ratio indicates prudent financial management, reducing risk and ensuring long-term solvency.

Negative Factors

Profitability Margins

Declining profitability margins can pressure earnings, potentially affecting the company's ability to reinvest and grow.

Operational Efficiency

Decreased operational efficiency may hinder the company's ability to maximize profits and compete effectively in the market.

Return on Equity

A declining return on equity suggests reduced profitability relative to shareholder investments, potentially impacting investor confidence.

Mercury General Business Overview & Revenue Model

Company Description

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, and umbrella insurance products. Its automobile insurance products include collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products comprise dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents and insurance agencies, as well as directly through internet sales portals in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.

How the Company Makes Money

Mercury General primarily generates revenue through the underwriting of insurance premiums. The company collects premiums from policyholders in exchange for coverage against specified risks. The key revenue streams include automobile insurance, property insurance, and various types of commercial insurance. Additionally, Mercury General earns investment income from the premiums it collects, which are invested in a diversified portfolio until claims are paid. The company's profitability is also influenced by its ability to manage claims effectively and maintain a low loss ratio. Significant partnerships with agents and brokers help widen its distribution channels, contributing to its earnings through increased policy sales.

Mercury General Financial Statement Overview

Summary

Mercury General demonstrates a solid financial position with consistent revenue growth and strong cash flow generation. However, profitability margins have faced some pressure, and operational efficiency could be improved.

Income Statement

Mercury General has shown a consistent revenue growth trend, with a 3.09% increase in the TTM period. The gross profit margin improved significantly to 33.12% in TTM, indicating better cost management. However, the net profit margin decreased slightly to 6.76% from the previous year, suggesting some pressure on profitability. The EBIT and EBITDA margins also showed a decline, indicating potential challenges in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio remains stable at 0.29, reflecting a conservative leverage approach. Return on equity decreased to 20.53% in TTM, down from 24.04% in the previous year, indicating a slight decline in profitability relative to shareholder equity. The equity ratio is healthy, suggesting a strong capital structure.

Cash Flow

Mercury General's free cash flow growth rate improved significantly by 12.49% in TTM, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is robust at 22.91, indicating efficient cash conversion. The free cash flow to net income ratio remains high, reflecting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.77B	5.48B	4.63B	3.64B	3.99B	3.78B
Gross Profit	1.91B	932.86M	403.25M	-373.76M	599.82M	3.50B
EBITDA	571.10M	605.70M	195.84M	-571.09M	395.48M	544.01M
Net Income	390.07M	467.95M	96.34M	-512.67M	247.94M	374.61M
Balance Sheet
Total Assets	9.08B	8.31B	7.10B	6.51B	6.77B	6.33B
Cash, Cash Equivalents and Short-Term Investments	1.12B	720.26M	729.39M	412.71M	475.68M	724.09M
Total Debt	574.33M	587.71M	587.96M	420.25M	407.51M	416.36M
Total Liabilities	7.11B	6.36B	5.56B	4.99B	4.63B	4.30B
Stockholders Equity	1.97B	1.95B	1.55B	1.52B	2.14B	2.03B
Cash Flow
Free Cash Flow	817.53M	990.98M	416.18M	317.08M	460.14M	565.66M
Operating Cash Flow	869.32M	1.04B	452.99M	352.59M	501.58M	605.62M
Investing Cash Flow	-285.39M	-796.66M	-295.44M	-316.38M	-373.67M	-411.29M
Financing Cash Flow	-71.02M	-71.11M	103.58M	-81.99M	-140.84M	-140.25M

Mercury General Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 79.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCY, the sentiment is Positive. The current price of 79.03 is above the 20-day moving average (MA) of 76.34, above the 50-day MA of 71.81, and above the 200-day MA of 62.22, indicating a bullish trend. The MACD of 1.86 indicates Positive momentum. The RSI at 68.88 is Neutral, neither overbought nor oversold. The STOCH value of 69.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCY.

Mercury General Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCY	79 Outperform	$4.38B	11.06	21.56%	1.61%	14.93%	22.19%
RLI	76 Outperform	$6.08B	18.95	19.49%	3.91%	10.29%	-4.70%
SIGI	75 Outperform	$4.85B	12.77	12.19%	1.95%	12.27%	66.53%
HCI	73 Outperform	$2.36B	15.79	23.90%	0.90%	9.62%	-18.69%
WTM	69 Neutral	$4.53B	21.87	4.47%	0.06%	8.08%	-57.76%
Sector *	68 Neutral	$18.10B	11.52	9.93%	3.73%	9.70%	1.14%
KMPR	58 Neutral	$3.32B	9.98	12.21%	2.37%	2.75%	572.22%

Mercury General Corporate Events

Mercury General Holds Annual Shareholder Meeting

On May 14, 2025, Mercury General Corporation held its Annual Meeting of Shareholders where all nine directors were elected, the compensation for named executive officers was approved, and KPMG LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its financial oversight and executive management, which are crucial for stakeholders.

The most recent analyst rating on (MCY) stock is a Buy with a $80.00 price target. To see the full list of analyst forecasts on Mercury General stock, see the MCY Stock Forecast page.