Hagerty, Inc. (HGTY) | Investment Case

1. Company Snapshot

1.a. Company Description

Hagerty, Inc.provides insurance agency services worldwide.It offers automobile and boat insurance products; and reinsurance products.

The company also provides Hagerty Media, which publishes contents through the HDC Magazine, video content, YouTube channel; HDC that offers subscription based products and services, including HDC Magazine, automotive enthusiast events, proprietary vehicle valuation tools, emergency roadside services, and special vehicle-related discounts; HVT, a valuation tool used by the customer to access current and historic pricing data of collector car, truck, SUV, and motorcycle models; and Hagerty Events, an eclectic mix of small and large events.In addition, it offers DriveShare, a peer-to-peer rental platform for collector and cool vehicles; Motorsport Reg, a motorsport membership, licensing, and event online management system that automates event listings, registration, and payment processing for various motorsport events; and Hagerty Garage + Social, a platform that provides clubhouses and car storage facilities.The company is headquartered in Traverse City, Michigan.

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1.b. Last Insights on HGTY

Here is a 90-word analysis of the negative drivers behind the recent stock performance of Hagerty, Inc.: Hagerty's recent performance was negatively impacted by high operating expenses, partially offset by strong revenue growth. Despite beating Q4 earnings estimates, the company's operating income growth was slower than expected, and its adjusted EBITDA margin expansion was modest. Additionally, the company's guidance for 2025 revenue growth of 12-13% may be perceived as conservative, potentially weighing on investor sentiment.

1.c. Company Highlights

Last Price	12.62
Change Percentage	-0.94%
Open	12.7
Previous Close	12.74
Market Cap ( Millions)	4332
Volume	39725
Year High	13.86
Year Low	8.03
M A 50	12.23
M A 200	10.6

FCF Yield	3.57%
Dividend Yield	0.00%
ROE	22.15%
Debt / Equity	38.34%
Net Debt / EBIDTA	-155.50%
Price To Book	4.1
Price Earnings Ratio	28.03
Price To FCF	28.01
Price To sales	3.17
EV / EBITDA	29.2

2. Hagerty's Q3 2025 Earnings: A Strong Performance

Hagerty's third-quarter 2025 revenue grew 18% to $380 million, driven by a 16% increase in written premium and 18% growth in commission and fee revenue. The company's earned premium increased 13% to $187 million, and the loss ratio was 42% for the quarter. The operating profit was $34 million, a 240% increase, and net income was $46 million, up 143% from the previous year. Adjusted EBITDA grew 106% to $50 million. The actual EPS came out at $0.13, beating estimates of $0.09.

Publication Date: Nov -30

                                    📋 Highlights
                                    Revenue Growth:
                                                Q3 2025 revenue rose 18% to $380M, driven by 16% written premium and 18% commission/fee revenue growth.
Operating Profit Surge:
                                                Operating profit jumped 240% to $34M, with net income up 143% to $46M and adjusted EBITDA rising 106% to $50M.
9-Month Financials:
                                                YTD 2025 operating margins improved 350 bps, net income gained 73% to $121M, and EBITDA grew 46% to $153M.
Strategic Partnerships:
                                                Collaborations with Liberty Mutual and Safeco aim to add tens of thousands of customers, aligning with omnichannel strategy.
2025 Guidance Raised:
                                                Revenue growth target set at 14-15%, net income projected at $124-129M (+58-65%), and EBITDA of $170-176M (+37-41%).

                                

Revenue Growth and Profitability

For the first nine months of 2025, total revenue increased 18%, with earned premium in Hagerty Reinsurance up 12% and membership, marketplace, and other revenue jumping 54%. The operating margins jumped 350 basis points, resulting in net income gains of 73% to $121 million and adjusted EBITDA growth of 46% to $153 million. The company's business is growing quickly and has exceeded expectations this year, leading to an increase in guidance.

Guidance and Outlook

For 2025, Hagerty increased its revenue growth outlook to 14-15% and expects net income of $124-129 million, up 58-65%, and adjusted EBITDA of $170-176 million, an increase of 37-41%. The company's EBITDA range for 2025 suggests around $20 million in EBITDA in 4Q at the midpoint, which is flat from last year on a much higher revenue base. Analysts estimate next year's revenue growth at -0.8%, indicating a potential slowdown.

Valuation and Metrics

With a P/E Ratio of 29.67, P/B Ratio of 4.34, and EV/EBITDA of 31.01, the market is pricing in a certain level of growth and profitability. The ROE of 22.15% and ROIC of 15.04% indicate a strong return on equity and invested capital. The Net Debt / EBITDA ratio of -1.55 suggests a healthy debt position. As the company continues to grow and expand its business, these valuation metrics will be important to monitor.

Business Developments

The company has partnered with Liberty Mutual and Safeco, which is expected to bring tens of thousands of customers and is consistent with its omnichannel distribution strategy. The Enthusiast Plus program, launched to protect more of the collectible market, is off to a good start. The marketplace business line has seen strong revenue growth, but sales expense has risen in tandem. The company plans for this business to be slightly operating profit positive this year, with incremental margins being single-digit millions of dollars.

3. NewsRoom

RESPECTED PRIVATE COLLECTIONS LEAD EARLY HIGHLIGHTS FOR BROAD ARROW'S 2026 AMELIA AUCTION

Dec -02

Source: globenewswire.com

BROAD ARROW ANNOUNCES, “GLOBAL ICONS,” AN ONLINE COLLECTOR CAR AND MEMORABILIA SALE SCHEDULED FOR JANUARY 2026

Nov -20

Source: globenewswire.com

Hagerty, Inc. $HGTY Position Lifted by Connor Clark & Lunn Investment Management Ltd.

Nov -17

Source: defenseworld.net

Hagerty, Inc. (HGTY) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

Compared to Estimates, Hagerty (HGTY) Q3 Earnings: A Look at Key Metrics

Nov -04

Source: zacks.com

Hagerty, Inc. (HGTY) Surpasses Q3 Earnings and Revenue Estimates

Nov -04

Source: zacks.com

Hagerty Reports Third Quarter 2025 Results; Increases 2025 Outlook

Nov -04

Source: prnewswire.com

BROAD ARROW'S INAUGURAL ZÜRICH AUCTION ACHIEVES OVER CHF 22M WITH 87 PERCENT SELL-THROUGH RATE

Nov -04

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.43%)

6. Segments

Insurance and Related Activities

Expected Growth: 7.43%

Hagerty, Inc.'s 7.43% growth in Insurance and Related Activities is driven by increasing demand for specialty insurance products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, improved customer experience, and targeted marketing efforts have contributed to its growth.

7. Detailed Products

Hagerty Drivers Club

A membership program offering exclusive benefits, discounts, and experiences for car enthusiasts

Hagerty Valuation Tools

A suite of tools providing accurate vehicle valuations, pricing data, and market insights

Hagerty Insurance

Specialized insurance coverage for classic, collector, and exotic vehicles

Hagerty Garage + Social

A community-driven platform for car enthusiasts to connect, share, and showcase their vehicles

Hagerty Marketplace

A curated platform for buying and selling classic, collector, and exotic vehicles

Hagerty Events

Exclusive events and experiences for car enthusiasts, including concours, rallies, and drives

8. Hagerty, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hagerty, Inc. faces moderate threat from substitutes, as there are limited alternatives for classic car insurance and valuation services. However, the company's strong brand reputation and specialized services mitigate this threat.

Bargaining Power Of Customers

Hagerty, Inc. has a diverse customer base, and no single customer has significant bargaining power. The company's specialized services and strong brand reputation also reduce customer bargaining power.

Bargaining Power Of Suppliers

Hagerty, Inc. has a diversified supplier base, and no single supplier has significant bargaining power. The company's strong financial position and specialized services also reduce supplier bargaining power.

Threat Of New Entrants

Hagerty, Inc. operates in a niche market with high barriers to entry, including specialized knowledge and expertise. The company's strong brand reputation and established customer base also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

Hagerty, Inc. operates in a competitive market, but the company's specialized services and strong brand reputation help to differentiate it from competitors. The company's focus on classic car insurance and valuation services also reduces rivalry intensity.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	43.87%
Debt Cost	7.79%
Equity Weight	56.13%
Equity Cost	7.79%
WACC	7.79%
Leverage	78.15%

11. Quality Control: Hagerty, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kingstone

A-Score: 6.0/10

Value: 7.7

Growth: 6.4

Quality: 9.0

Yield: 1.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

American Coastal Insurance

A-Score: 5.3/10

Value: 7.5

Growth: 4.9

Quality: 5.8

Yield: 6.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

ProAssurance

A-Score: 5.2/10

Value: 6.1

Growth: 2.9

Quality: 7.1

Yield: 0.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

Hagerty

A-Score: 5.1/10

Value: 3.0

Growth: 8.4

Quality: 6.6

Yield: 0.0

Momentum: 7.0

Volatility: 5.3

1-Year Total Return ->

Donegal

A-Score: 5.0/10

Value: 8.9

Growth: 4.1

Quality: 3.5

Yield: 7.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

NI Holdings

A-Score: 4.0/10

Value: 4.5

Growth: 4.1

Quality: 5.0

Yield: 0.0

Momentum: 2.0

Volatility: 8.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.62%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.79%

Hagerty, Inc. - US4051661092

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on HGTY

1.c. Company Highlights

Higher Growth

Lower Yield

Weak Momentum

Earnings Beats

Stable Momentum

Earnings Miss

Revenues Beats

Expensive

Fairly Valued

Average Quality

Revenues Miss

2. Hagerty's Q3 2025 Earnings: A Strong Performance

Revenue Growth and Profitability

Guidance and Outlook

Valuation and Metrics

Business Developments

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.43%)

6. Segments

Insurance and Related Activities

Expected Growth: 7.43%

7. Detailed Products

Hagerty Drivers Club

Hagerty Valuation Tools

Hagerty Insurance

Hagerty Garage + Social

Hagerty Marketplace

Hagerty Events

8. Hagerty, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Hagerty, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.62$

Current Price

12.62$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA