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1. Company Snapshot

1.a. Company Description

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products.The company offers personal residential property insurance for single-family homeowners and condominium owners, and rental property insurance in the states of Alabama, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, and Virginia; commercial residential insurance for properties in Florida, New Jersey, and New York; and licensed in the state of Pennsylvania, as well as personal residential and wind-only property insurance.It also provides restoration, and emergency and recovery services; and property management, and reinsurance services.


The company writes personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through eight wholesale agency relationships; and personal and commercial insurance policies through a network of approximately 70 independent agencies.Heritage Insurance Holdings, Inc.was founded in 2012 and is headquartered in Tampa, Florida.

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1.b. Last Insights on HRTG

Heritage Insurance Holdings' recent performance was driven by strong Q4 2024 earnings, with net income rising to $20.3 million and full-year net income increasing to $61.5 million. Revenue grew by 12.5% year-over-year to $210.26 million, fueled by a 6.1% increase in gross premiums earned and a 13% rise in commercial residential premiums in-force. The company strengthened its balance sheet, with tangible book value per share up 30% to $9.50 and shareholder equity increasing to $290.8 million. Additionally, key insiders recently purchased shares, demonstrating confidence in the business.

1.c. Company Highlights

2. Heritage Insurance Holdings Delivers Strong Q3 Results

Heritage Insurance Holdings reported a net income of $50.4 million, significantly up from the previous year, with earnings per share (EPS) of $1.63, far exceeding analyst estimates of $0.53. Net premiums earned were $195.1 million, down 1.9% due to increased ceded premiums. The net combined ratio improved to 72.9%, driven by a lower net loss ratio and expense ratio, indicating effective underwriting discipline. The company's book value per share increased 49% from the fourth quarter of 2024 to $14.15.

Publication Date: Nov -15

📋 Highlights
  • Net Income Surge: Net income reached $50.4 million, reflecting a significant year-over-year increase.
  • Record In-Force Premium: In-force premium hit $1.44 billion, driven by rate increases and underwriting discipline despite policy count decline.
  • New Business Growth: New business production surged 166% to $36 million, signaling strong pipeline for 2026 policy count recovery.
  • Share Repurchases Resumed: $2.3 million spent to repurchase 106,000 shares, with an additional $25 million authorized for buybacks.
  • Book Value Growth: Book value per share rose 49% to $14.15, while statutory surplus climbed $93.4 million to $352.2 million.

Growth Prospects and Strategic Initiatives

The company's strategic initiatives have yielded tangible results, with in-force premium reaching a record $1.44 billion, driven by rate increases and underwriting discipline. Despite a decline in policy count, new business production was up 166% to $36 million, and management expects policy count growth to return in 2026. Ernesto Garateix noted that outside of Florida, the company is seeing momentum in Virginia, Hawaii, and New York, where they achieved rate adequacy mid-year, which will impact 2026.

Reinsurance and Capital Management

Heritage's reinsurance program remains stable, with manageable costs and a highly rated panel of reinsurers. The company restarted its share repurchase program, buying back 106,000 shares for $2.3 million, and the Board authorized an additional $25 million for stock buybacks, citing the company's capital priorities. The company's statutory surplus rose $93.4 million to $352.2 million, providing additional growth capacity.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 2.2 and a Return on Equity (ROE) of 41.44%, the company's valuation appears reasonable. Analysts estimate next year's revenue growth at 7.4%. Kirk Lusk mentioned that the company views its stock as undervalued, and with ample room to grow its personal lines business, Heritage is exploring expansion opportunities into new regions and products. Management anticipates a low to mid-single-digit rate decrease in 2026, and the company is optimistic about growth prospects in Florida and outside of it.

3. NewsRoom

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Heritage to Present at Sidoti Year End Virtual Conference

Dec -04

Source: prnewswire.com

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Heritage Insurance Skyrockets 136% YTD: Time to Buy the Stock?

Dec -02

Source: zacks.com

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3 P&C Insurance Stocks That Have Outperformed the S&P 500 YTD

Dec -01

Source:

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Heritage Insurance Holdings, Inc. $HRTG Shares Bought by Creative Planning

Dec -01

Source: defenseworld.net

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Boston Partners Decreases Stock Position in Heritage Insurance Holdings, Inc. $HRTG

Dec -01

Source: defenseworld.net

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4 Stocks Trading Near 52-Week High With More Upside Potential

Nov -20

Source: zacks.com

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Heritage Q3 Earnings Beat Estimates, Price Momentum Expected To Continue

Nov -07

Source: seekingalpha.com

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Heritage Insurance Holdings, Inc. (HRTG) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

Property and Casualty Insurance

Expected Growth: 6.0%

Heritage Insurance Holdings, Inc.'s 6.0% growth in Property and Casualty Insurance is driven by increasing demand for homeowners' insurance in Florida, expansion into new states, and a growing agent network. Additionally, the company's focus on technology-driven underwriting and claims processing has improved operational efficiency, allowing for competitive pricing and attracting more customers.

7. Detailed Products

Homeowners Insurance

Provides financial protection against damage to a policyholder's home and personal possessions, as well as liability for accidents that may occur on the property.

Flood Insurance

Provides financial protection against flood damage to a policyholder's home and personal possessions.

Wind-Only Insurance

Provides financial protection against windstorm damage to a policyholder's home and personal possessions.

Condominium Insurance

Provides financial protection against damage to a policyholder's condominium unit and personal possessions.

Renters Insurance

Provides financial protection against damage to a policyholder's personal possessions and liability for accidents that may occur in a rental property.

8. Heritage Insurance Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Heritage Insurance Holdings, Inc. operates in a highly competitive industry, but the threat of substitutes is moderate due to the complexity of insurance products and the need for specialized knowledge.

Bargaining Power Of Customers

Heritage Insurance Holdings, Inc. has a diverse customer base, and no single customer has significant bargaining power, reducing the threat of customer bargaining power.

Bargaining Power Of Suppliers

Heritage Insurance Holdings, Inc. relies on a network of independent agents and brokers to distribute its products, giving them some bargaining power, but the company's size and scale mitigate this threat.

Threat Of New Entrants

The insurance industry has high barriers to entry, including regulatory hurdles and capital requirements, making it difficult for new entrants to compete with established players like Heritage Insurance Holdings, Inc.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry for Heritage Insurance Holdings, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.12%
Debt Cost 8.54%
Equity Weight 63.88%
Equity Cost 8.54%
WACC 8.54%
Leverage 56.54%

11. Quality Control: Heritage Insurance Holdings, Inc. passed 3 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

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United Fire Group

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Value: 8.9

Growth: 5.9

Quality: 6.5

Yield: 5.0

Momentum: 9.5

Volatility: 7.3

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Safety Insurance

A-Score: 6.3/10

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Quality: 7.1

Yield: 8.0

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Heritage Insurance Holdings

A-Score: 5.9/10

Value: 8.3

Growth: 5.4

Quality: 8.2

Yield: 1.0

Momentum: 10.0

Volatility: 2.3

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Value: 6.5

Growth: 3.0

Quality: 5.1

Yield: 6.0

Momentum: 6.0

Volatility: 7.0

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Palomar Holdings

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Value: 4.1

Growth: 9.4

Quality: 7.4

Yield: 0.0

Momentum: 7.5

Volatility: 5.0

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Global Indemnity

A-Score: 5.3/10

Value: 6.1

Growth: 4.2

Quality: 5.9

Yield: 8.0

Momentum: 2.0

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.73$

Current Price

26.73$

Potential

-0.00%

Expected Cash-Flows