Shares of Heritage Insurance (HRTG) have been strong performers lately, with the stock up 25.4% over the past month. The stock hit a new 52-week high of $29.1 in the previous session. Heritage Insurance has gained 134.7% since the start of the year compared to the 14.8% move for the Zacks Finance sector and the 7.8% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 5, 2025, Heritage Insurance reported EPS of $1.55 versus consensus estimate of $1.03 while it missed the consensus revenue estimate by 1.93%.
For the current fiscal year, Heritage Insurance is expected to post earnings of $4.1 per share on $842.24 in revenues. This represents a 103.98% change in EPS on a 3.09% change in revenues. For the next fiscal year, the company is expected to earn $4.15 per share on $899.54 in revenues. This represents a year-over-year change of 1.22% and 6.8%, respectively.
Valuation Metrics
While Heritage Insurance has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Heritage Insurance has a Value Score of A. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 6.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11.4X. On a trailing cash flow basis, the stock currently trades at 12.5X versus its peer group's average of 12.5X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Heritage Insurance an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Heritage Insurance currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Heritage Insurance passes the test. Thus, it seems as though Heritage Insurance shares could have potential in the weeks and months to come.
How Does HRTG Stack Up to the Competition?
Shares of HRTG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is HCI Group, Inc. (HCI). HCI has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. HCI Group, Inc. beat our consensus estimate by 15.88%, and for the current fiscal year, HCI is expected to post earnings of $16.32 per share on revenue of $891.62 million.
Shares of HCI Group, Inc. have gained 9.6% over the past month, and currently trade at a forward P/E of 11.11X and a P/CF of 21.78X.
The Insurance - Property and Casualty industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HRTG and HCI, even beyond their own solid fundamental situation.
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Heritage Insurance Holdings, Inc. (HRTG): Free Stock Analysis Report HCI Group, Inc. (HCI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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