Progressive (PGR) AI Stock Analysis

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Progressive

(NYSE:PGR)

Rating:76Outperform

Price Target:―

Progressive's strong financial performance, highlighted by revenue growth and robust cash flow, underpins its solid stock score. The recent earnings call adds a positive outlook with record premium growth and strategic advancements. However, technical indicators suggest caution, and valuation metrics show the stock is fairly priced. Potential risks from tariff impacts on margins and policy retention issues should be monitored.

Positive Factors

Earnings Growth

Progressive's NTM EPS growth is expected to be significantly higher than that of the S&P 500, highlighting strong future growth potential.

Margins

Margins remain strong with no indication of tariff pressure, and the underlying loss ratio improved significantly year-over-year.

Valuation

Progressive is still trading at a notable discount to S&P, making it an attractive option for investors.

Negative Factors

Investment Income

Investment income was below the estimated figures.

Policy Growth

Personal auto policies in force (PIF) growth was weaker than expected, with additions below estimates and a slowdown compared to March.

Premium Growth

The overall premium growth was worse than expected, with net written premium growth falling short of estimates.

Progressive (PGR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$162.56B

Dividend Yield1.77%

Average Volume (3M)2.54M

Price to Earnings (P/E)18.7

Beta (1Y)0.36

Revenue Growth20.74%

EPS Growth51.73%

CountryUS

Employees66,308

SectorFinancial

Sector Strength81

IndustryInsurance - Property & Casualty

Share Statistics

EPS (TTM)4.01

Shares Outstanding586,223,630

10 Day Avg. Volume2,746,193

30 Day Avg. Volume2,544,604

Financial Highlights & Ratios

PEG Ratio6.26

Price to Book (P/B)5.61

Price to Sales (P/S)0.00

P/FCF Ratio10.33

Enterprise Value/Market Cap1.04

Enterprise Value/Revenue0.58

Enterprise Value/Gross Profit2.16

Enterprise Value/Ebitda4.10

Forecast

1Y Price Target

$304.06

Price Target Upside9.08% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering18

Progressive Business Overview & Revenue Model

Company DescriptionThe 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 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 Key Performance Indicators (KPIs)

Any

Net Premiums

Net Premiums
Represents the total premiums earned after deducting reinsurance costs, providing insight into revenue generation from core insurance activities.

Chart InsightsProgressive's net premiums have shown impressive growth, with a 21% increase in 2024, driven by a surge in active policies. The company's strategic focus on competitive pricing and technology has resulted in a strong combined ratio of 88.8, well below their target. However, potential tariff impacts and declining policy life expectancy could pose challenges to margins and retention in the future. Despite these risks, high employee engagement and advancements in claims technology position Progressive well for continued operational efficiency and customer growth.

Data provided by:

Main Street Data

Progressive Earnings Call Summary

Earnings Call Date:Apr 16, 2025

(Q1-2025)

% Change Since: 0.96%|

Next Earnings Date:Jul 10, 2025

Earnings Call Sentiment Neutral

Progressive reported strong growth in personal auto applications and investment income, coupled with sub-90 combined ratios in key segments. However, challenges such as tariffs, competitive pressures, and property market volatility present noteworthy hurdles. While growth remains robust, there is uncertainty regarding the impact of tariffs and increased competition.

Q1-2025 Updates

Positive Updates

Record Growth in Personal Auto Applications

The first quarter of 2025 saw personal auto new applications surpass the previous record by over 20%. This growth was driven by more quotes and higher conversion rates, indicating strong price competitiveness.

Strong Investment Income Growth

Progressive's investment portfolio generated investment income that was 32% greater than the first quarter of the previous year, averaging over $270 million a month year-to-date.

Sub-90 Combined Ratios in Key Segments

Personal auto, property, and commercial lines all reported year-to-date combined ratios below 90, a significant achievement amid industry challenges.

Significant Growth in Commercial Lines

Core commercial auto new applications increased by 8% year-over-year, with significant growth in business auto and contractor BMT applications, despite challenges in the trucking space.

Negative Updates

Challenges with Tariffs and Market Uncertainty

The macroeconomic effects of tariffs pose a challenge as their impact on supply chain and loss costs is still uncertain. Progressive is preparing various scenarios to assess potential impacts.

Retention Challenges Amid Competitive Environment

The competitive environment is leading to increased shopping, impacting policy life expectancy and retention rates. The company is working to maintain growth despite these challenges.

Ongoing Challenges in Certain Property Markets

Progressive continues to face challenges in property markets, particularly in Florida and California, where growth is being carefully managed due to volatility and market conditions.

Company Guidance

During Progressive's first-quarter investor call for 2025, CEO Tricia Griffith highlighted the company's strong performance with near-record margins and record growth, driven by a 20% increase in personal auto applications compared to the first quarter of 2023. She emphasized Progressive's efficient customer acquisition process and competitive pricing, supported by a robust advertising strategy that significantly enhanced their market presence. Griffith also noted substantial growth in commercial auto applications, up 8% year-over-year, and progress in the property segment, particularly in less volatile states. The company achieved a year-to-date combined ratio below 90 for its personal auto, property, and commercial lines despite industry challenges. Progressive's investment portfolio generated a 32% increase in investment income, averaging over $270 million monthly. Concerning potential impacts from tariffs, Progressive has been modeling various scenarios to prepare for possible increases in loss costs. Griffith expressed confidence in Progressive's ability to manage challenges, highlighting their historical success during macroeconomic disruptions.

Progressive Financial Statement Overview

Summary

Progressive shows strong financial performance with substantial revenue growth, robust cash flow generation, and a stable balance sheet with low leverage. However, there are concerns about margin volatility and liabilities.

Income Statement

Very Positive

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

Positive

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

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
78.51B	75.34B	62.08B	49.59B	47.68B	42.64B
	Gross Profit
78.51B	75.34B	62.07B	49.59B	47.68B	42.63B
	EBIT
11.01B	10.71B	5.17B	922.10M	4.21B	7.17B
	EBITDA
11.57B	11.28B	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
8.72B	8.48B	3.90B	721.50M	3.35B	5.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.57B	76.09B	84.90M	8.95B	45.00B	42.11B
	Total Assets
94.13B	105.75B	88.69B	70.23B	71.13B	64.10B
	Total Debt
6.89B	6.89B	6.89B	6.53B	4.90B	5.40B
	Net Debt
6.74B	6.75B	6.80B	6.30B	4.71B	5.32B
	Total Liabilities
72.32B	80.15B	68.41B	54.34B	52.90B	47.06B
	Stockholders Equity
21.81B	25.59B	20.28B	15.89B	18.23B	17.04B
Cash Flow		Free Cash Flow
15.73B	14.83B	10.39B	6.56B	7.52B	6.68B
	Operating Cash Flow
16.03B	15.12B	10.64B	6.85B	7.76B	6.91B
	Investing Cash Flow
-12.97B	-13.75B	-10.84B	-7.96B	-3.12B	-6.12B
	Financing Cash Flow
-3.02B	-1.32B	78.00M	1.13B	-4.52B	-938.80M

Progressive Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price278.75

Price Trends

50DMA

276.28

Positive

100DMA

266.62

Positive

200DMA

255.75

Positive

Market Momentum

MACD

1.50

Positive

RSI

49.73

Neutral

STOCH

20.31

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGR, the sentiment is Neutral. The current price of 278.75 is below the 20-day moving average (MA) of 281.77, above the 50-day MA of 276.28, and above the 200-day MA of 255.75, indicating a neutral trend. The MACD of 1.50 indicates Positive momentum. The RSI at 49.73 is Neutral, neither overbought nor oversold. The STOCH value of 20.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
WRB	82 Outperform	$27.72B	16.95	20.73%	0.44%	11.39%	14.76%
ALL	77 Outperform	$53.82B	13.89	19.88%	1.85%	11.49%	219.86%
PGR	76 Outperform	$162.56B	18.67	34.34%	1.77%	20.74%	51.73%
CB	73 Outperform	$114.65B	13.77	13.40%	1.61%	9.09%	-7.55%
MKL	73 Outperform	$23.60B	13.71	10.94%	―	-6.46%	-26.71%
TRV	71 Outperform	$61.41B	14.76	16.05%	1.55%	9.60%	36.89%
Sector *	64 Neutral	$12.67B	9.74	7.58%	17015.08%	12.21%	-6.96%

* Financial Sector Average

Performance Comparison

PGR

Progressive

278.75

77.69

38.64%

Chubb

289.73

30.51

11.77%

ALL

Allstate

207.25

45.83

28.39%

MKL

Markel

1,908.08

304.43

18.98%

TRV

Travelers Companies

275.88

69.17

33.46%

WRB

W. R. Berkley Corporation

74.20

23.08

45.15%

Progressive Corporate Events

Executive/Board Changes

Progressive Appoints Carl Joyce as New VP and CAO

Neutral

Mar 10, 2025

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.

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.