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Progressive Corp. (PGR)
NYSE:PGR
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Progressive
(NYSE:PGR)74Outperform
Positive Factors
Earnings Performance
The operating EPS of $1.75 was a big beat compared to the forecast of $1.27, showing stronger performance than expected.
New Policies
The company added a record 4.2 million new personal auto policies, which will support margin uplift as these policies mature.
Risk Management
PGR's California Wildfire losses were only ~$43mm, significantly lower than the estimated ~$180mm, indicating better-than-expected risk management.
Negative Factors
Mobile App Performance
Mobile app download trends through February 18 have been softer and point to a deceleration to approximately +1.1% month-over-month, which is below the estimated consensus PIF of approximately +1.4%.
Property Business Growth
Policycount growth in the as-yet unprofitable homeowners'/Property business was below expectations.
Progressive (PGR) vs. S&P 500 (SPY)
Market Cap
$166.01B
Dividend Yield1.72%
Average Volume (3M)2.67M
Price to Earnings (P/E)19.7
Beta (1Y)0.18
Revenue Growth21.36%
EPS Growth118.77%
CountryUS
Employees61,400
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)14.43
Shares Outstanding586,207,700
10 Day Avg. Volume3,063,715
30 Day Avg. Volume2,671,013
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)N/A
Price to Sales (P/S)2.32
Price to Cash Flow (P/CF)9.10
P/FCF Ratio9.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$290.14Price Target Upside2.45% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
Progressive Business Overview & Revenue Model
Company DescriptionThe Progressive Corporation is one of the leading auto insurers in the United States. The company also offers residential property insurance, reinsurance, and other specialty property-casualty insurance and related services. Its Personal Lines business unit covers insurance for personal automobiles, recreational and other vehicles. Under the Commercial Lines division, Progressive writes primary liability and physical damage insurance for automobiles owned by small businesses. Its Property segment offers residential property insurance for homeowners, renters and other property owners.
How the Company Makes MoneyProgressive 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.82
Very Positive
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.75
Positive
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.78
Positive
| 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 | 1.50B | 4.55B | 7.50B | Net Income Common Stockholders |
| 8.48B | 3.90B | 721.50M | 3.35B | 5.70B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 84.90M | 8.95B | 45.00B | 42.11B | Total Assets |
| 35.57B | 88.69B | 70.23B | 71.13B | 64.10B | Total Debt |
| 0.00 | 6.89B | 6.53B | 4.90B | 5.40B | Net Debt |
| 0.00 | 6.80B | 6.30B | 4.71B | 5.32B | Total Liabilities |
| 9.97B | 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 | |||
| 3.52B | 10.39B | 6.56B | 7.52B | 6.68B | Operating Cash Flow |
| 3.52B | 10.64B | 6.85B | 7.76B | 6.91B | Investing Cash Flow |
| -2.20B | -10.84B | -7.96B | -3.12B | -6.12B | Financing Cash Flow |
| -1.32B | 78.00M | 1.13B | -4.52B | -938.80M |
Progressive Technical Analysis
Positive
283.19
Price Trends
250.10
Positive
249.47
Positive
235.53
Positive
Market Momentum
9.47
Negative
73.28
Negative
92.96
Negative
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 283.19 is above the 20-day moving average (MA) of 265.44, above the 50-day MA of 250.10, and above the 200-day MA of 235.53, indicating a bullish trend. The MACD of 9.47 indicates Negative momentum. The RSI at 73.28 is Negative, neither overbought nor oversold. The STOCH value of 92.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGR.
Progressive Risk Analysis
Progressive disclosed 31 risk factors in its most recent earnings report. Progressive 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
Progressive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.38B | 11.30 | 18.92% | 1.61% | 8.19% | 29.77% | |
78 Outperform | $22.42B | 9.86 | 16.45% | 2.20% | 13.22% | 24.83% | |
75 Outperform | $57.97B | 11.91 | 17.94% | 1.59% | 12.23% | 68.50% | |
74 Outperform | $166.01B | 19.67 | 33.14% | 1.72% | 21.36% | 118.77% | |
72 Outperform | $53.55B | 11.89 | 21.77% | 1.82% | 12.28% | ― | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.89% | -28.56% | 1.14% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
PGR
Progressive
283.19
91.14
47.46%
ALL
Allstate
199.03
44.32
28.65%
AIG
American International Group
79.85
6.57
8.97%
CINF
Cincinnati Financial
143.26
28.44
24.77%
HIG
Hartford Financial
116.98
21.18
22.11%
TRV
Travelers Companies
255.70
39.02
18.01%
Progressive Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: 15.56% | Next Earnings Date: Apr 10, 2025
Earnings Call Sentiment Positive
The earnings call presented a largely positive outlook with record growth in premiums and a strong combined ratio. Employee engagement is at an all-time high, and advancements in claims technology are delivering significant efficiency gains. However, there are concerns regarding the potential impact of tariffs on margins and a decline in policy life expectancy, which could affect retention.Highlights
Record Growth in Net Premiums Written
Net premiums written grew by approximately 21% year-over-year, reaching $74.4 billion. The premium growth was driven primarily by customer growth, with active policies increasing by more than 5 million.
Outstanding Combined Ratio
Progressive achieved a combined ratio of 88.8 in 2024, significantly better than the target of 96 and about 6 points lower than in 2023.
High Employee Engagement
Employee engagement surpassed previous records, with Progressive ranking in the 98th percentile of engagement and the 99th percentile in overall satisfaction according to Gallup.
Advancements in Claims Technology
Photo estimating adoption grew significantly, leading to an 82% increase since 2016, with no material degradation in accuracy. Machine vision models have doubled productivity in photo estimating.
Lowlights
Impact of Tariffs on Margins
Potential impacts from tariffs on new car prices and parts could affect margins, particularly in the second half of 2025 and into 2026.
Decline in Policy Life Expectancy
There has been a noted decline in policy life expectancy as a result of the rate increases over the years, which is affecting retention.
Company Guidance
In the call, Progressive's leadership provided a robust overview of their fiscal year 2024 performance, highlighting significant metrics like a 21% year-over-year increase in net premiums written, reaching $74.4 billion. The company also saw a record growth in active policies, increasing by over 5 million policies, which is double their previous highest annual rate. They achieved a combined ratio of 88.8, surpassing their goal of 96, and improving by about 6 points compared to 2023. Employee engagement and satisfaction metrics were also strong, with Progressive ranking in the 98th percentile for engagement and 99th for overall satisfaction, placing them among the top U.S. companies. Additionally, they emphasized their strategic pillars, focusing on people, culture, competitive pricing, and technology investments in their Claims process. The call also addressed the potential impact of tariffs and how they are modeling these into their pricing strategies.Progressive Corporate Events
Financial Disclosures
Progressive Releases November 2024 Financial Results
Neutral
Dec 13, 2024
The Progressive Corporation announced financial results for itself and its subsidiaries for November 30, 2024, showing performance data for the month and year-to-date periods. This release is significant for stakeholders as it provides insights into the company’s financial health and operational progress.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.