Have you been paying attention to shares of Heritage Insurance (HRTG)? Shares have been on the move with the stock up 60.3% over the past month. The stock hit a new 52-week high of $24.44 in the previous session. Heritage Insurance has gained 100.8% since the start of the year compared to the 1.9% move for the Zacks Finance sector and the 13.2% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 6, 2025, Heritage Insurance reported EPS of $0.99 versus consensus estimate of $0.46 while it missed the consensus revenue estimate by 1.01%.
For the current fiscal year, Heritage Insurance is expected to post earnings of $2.43 per share on $870.17 million in revenues. This represents a 20.9% change in EPS on a 6.51% change in revenues. For the next fiscal year, the company is expected to earn $3.13 per share on $935.52 million in revenues. This represents a year-over-year change of 28.6% and 7.51%, respectively.
Valuation Metrics
Heritage Insurance may be at a 52-week high right now, but what might the future hold for the stock? 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 they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors 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 A and F, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11.7X. On a trailing cash flow basis, the stock currently trades at 10.7X versus its peer group's average of 11.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
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 fits the bill. 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 Skyward Specialty Insurance Group, Inc. (SKWD). SKWD has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of D.
Earnings were strong last quarter. Skyward Specialty Insurance Group, Inc. beat our consensus estimate by 15.38%, and for the current fiscal year, SKWD is expected to post earnings of $3.51 per share on revenue of $1.34 billion.
Shares of Skyward Specialty Insurance Group, Inc. have gained 13.7% over the past month, and currently trade at a forward P/E of 16.78X and a P/CF of 18.16X.
The Insurance - Property and Casualty industry is in the top 19% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HRTG and SKWD, even beyond their own solid fundamental situation.
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Heritage Insurance Holdings, Inc. (HRTG): Free Stock Analysis Report Skyward Specialty Insurance Group, Inc. (SKWD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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