Progressive (PGR) AI Stock Analysis

• Market Cap: $158.35B
• Dividend Yield: 1.88%
• Average Volume (3M): 3.81M
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.28
• Revenue Growth: 21.36%
• EPS Growth: 118.77%
• Country: US
• Employees: 66,308
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Property & Casualty
• EPS (TTM): 14.43
• Shares Outstanding: 586,236,100
• 10 Day Avg. Volume: 4,610,898
• 30 Day Avg. Volume: 3,812,670
• PEG Ratio: 0.16
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.12
• Price to Cash Flow (P/CF): 13.30
• P/FCF Ratio: 13.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $299.07
• Price Target Upside: 10.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Progressive's strong financial performance, characterized by robust revenue and cash flow growth, along with a well-capitalized balance sheet, underpins its high score. The technical analysis indicates strong upward momentum, which is a positive sign for potential investors. Valuation metrics are reasonable, though not exceptional. The earnings call provided a positive outlook, despite some concerns about tariffs and retention. Overall, Progressive is well-positioned for future growth with a solid operational and strategic framework.

Positive Factors

Earnings Potential

Despite recent share price decline, the stock has a potential return of 13% on a year-ahead basis, reaffirming the Buy recommendation.

Financial Performance

Operating income per share significantly outperformed forecasts, delivering $1.73 compared to the expected $1.31.

Underwriting Profits

The combined ratio of 82.5% was significantly better than expectations, indicating strong underwriting profits.

Negative Factors

Growth Expectations

Personal auto policies added did not meet expectations, with both agency and direct additions falling short.

Policy Growth

Progressive net added +239k personal auto customers in Feb compared with the forecast of +487k, indicating weaker growth than expected.

Premium Growth

Net Premium Growth slowed down and did not meet the expected target, which was partly influenced by the number of days in the month.

Progressive Business Overview & Revenue Model

Company Description

The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments: Personal Lines, Commercial Lines, and Property. The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV). This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products. The Commercial Lines segment provides auto-related primary liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses; as well as non-fleet and airport taxis, and black-car services. The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers personal umbrella insurance, and primary and excess flood insurance. The company also offers policy issuance and claims adjusting services; and acts as an agent to homeowner general liability, workers' compensation insurance, and other products. In addition, it provides reinsurance services. The company sells its products through independent insurance agencies, as well as directly on Internet through mobile devices, and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield, Ohio.

How the Company Makes Money

Progressive makes money primarily through the underwriting and selling of insurance policies. The company's key revenue streams include premiums collected from policyholders and investment income generated from the reserves held to cover future claims. Progressive's auto insurance segment is the primary driver of revenue, benefiting from its large customer base and competitive pricing strategies. Additionally, the company earns through its diversified portfolio of products, including homeowners and commercial insurance. Significant partnerships with independent agents and financial institutions also facilitate a broader market reach, contributing to its earnings by expanding its customer base and enhancing distribution capabilities. Progressive's focus on technology and data analytics allows it to refine pricing models and reduce claims costs, further supporting its profitability.

Progressive Financial Statement Overview

Summary

Progressive showcases strong financial performance with impressive revenue growth and robust cash flow generation. The balance sheet is well-capitalized with a conservative leverage position, enhancing financial stability. Despite some fluctuations in profit margins, the overall trajectory is positive, underlining the company’s capacity to generate and sustain value for stakeholders. The primary areas for vigilance include managing liabilities and stabilizing margins.

Income Statement

Progressive has demonstrated strong revenue growth with a significant increase from $38.997 billion in 2019 to $62.082 billion in 2023, a 59.2% growth. The net profit margin improved from 10.18% in 2019 to 6.29% in 2023, despite a dip in 2022. The EBIT and EBITDA margins have been volatile, with a notable improvement in 2023. Overall, the company’s revenue trajectory and profitability indicate strong financial health, although the volatility in margins suggests areas for improvement.

Balance Sheet

Progressive's balance sheet shows a robust equity base, with stockholders' equity growing from $13.673 billion in 2019 to $20.277 billion in 2023. The debt-to-equity ratio decreased over time, reflecting reduced leverage, which is a positive sign of financial stability. The equity ratio has been stable, indicating a balanced approach towards asset financing. While the low leverage is a strength, the relatively high liabilities to assets ratio could pose a potential risk.

Cash Flow

The company's cash flow has been strong with consistent positive free cash flow, peaking at $10.391 billion in 2023, representing a substantial growth from $5.898 billion in 2019. The operating cash flow to net income ratio remains healthy, indicating efficient cash generation relative to earnings. The company’s ability to sustain and grow its free cash flow reinforces its financial resilience.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.76B	62.08B	49.59B	47.68B	42.64B
	Gross Profit
8.76B	62.07B	49.59B	47.68B	42.63B
	EBIT
0.00	5.17B	922.10M	4.21B	7.17B
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
8.48B	3.90B	721.50M	3.35B	5.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
76.09B	84.90M	8.95B	45.00B	42.11B
	Total Assets
105.75B	88.69B	70.23B	71.13B	64.10B
	Total Debt
6.89B	6.89B	6.53B	4.90B	5.40B
	Net Debt
6.75B	6.80B	6.30B	4.71B	5.32B
	Total Liabilities
80.15B	68.41B	54.34B	52.90B	47.06B
	Stockholders Equity
25.59B	20.28B	15.89B	18.23B	17.04B
Cash Flow		Free Cash Flow
14.83B	10.39B	6.56B	7.52B	6.68B
	Operating Cash Flow
15.12B	10.64B	6.85B	7.76B	6.91B
	Investing Cash Flow
-13.75B	-10.84B	-7.96B	-3.12B	-6.12B
	Financing Cash Flow
-1.32B	78.00M	1.13B	-4.52B	-938.80M

Progressive Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 270.11
• 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 PGR, the sentiment is Positive. The current price of 270.11 is below the 20-day moving average (MA) of 275.21, below the 50-day MA of 270.20, and above the 200-day MA of 245.20, indicating a neutral trend. The MACD of 2.95 indicates Positive momentum. The RSI at 61.73 is Neutral, neither overbought nor oversold. The STOCH value of 74.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGR.

Progressive Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CINF	82 Outperform	$21.08B	9.27	17.61%	2.60%	13.22%	24.83%
PGR	80 Outperform	$158.35B	18.76	36.98%	1.88%	21.36%	118.77%
HIG	79 Outperform	$33.21B	11.25	19.58%	1.80%	8.19%	29.77%
TRV	75 Outperform	$56.21B	11.56	18.94%	1.77%	12.23%	68.50%
ALL	72 Outperform	$47.85B	10.63	23.80%	2.05%	12.28%	―
AIG	70 Outperform	$48.35B	16.36	7.10%	2.06%	-28.56%	1.14%
Sector *	64 Neutral	$13.44B	9.41	9.19%	4.92%	16.30%	-8.66%

Progressive Corporate Events

Progressive Appoints Carl Joyce as New VP and CAO

On March 7, 2025, Progressive Corporation appointed Carl G. Joyce as the new Vice President and Chief Accounting Officer, succeeding Mariann Wojtkun Marshall. Mr. Joyce, who has been with the company for 13 years and served as Director of Financial Reporting – GAAP for over five years, will receive compensation and benefits aligned with his senior role, potentially impacting the company’s financial leadership and strategic direction.