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Heritage Insurance (HRTG) to Post Q1 Earnings: What's in Store?

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Heritage Insurance Holdings Inc. (HRTG - Free Report) is slated to report first-quarter 2024 earnings on May 1, after market close. The company delivered an earnings surprise in each of the last four reported quarters.

Factors at Play

Heritage Insurance’s first-quarter results are likely to benefit from disciplined underwriting, diversification business, rate adequacy and a solid reinsurance program. Focus on geographies where rate adequacy aligns with underwriting standards and product design is likely to have added to the upside.

Underwriting results are likely to benefit from better pricing and prudent underwriting. These actions combined are expected to have driven average premium per policy and organic growth of the commercial residential business and, in turn, fueled gross premiums earned.

Net investment income is likely to have benefited from a favorable interest rate environment. The Zacks Consensus Estimate is pegged at $8 million, indicating an increase of 35.3% from the year-ago reported number.

Higher premiums and net investment income are likely to have driven revenues in the top-reported quarter. The Zacks Consensus Estimate for first-quarter revenues is pegged at $189.1 million, indicating an increase of 6.9% from a year-ago reported figure.

Strategic investments in technology, prudent underwriting and cost management efforts are likely to have aided expense and combined ratio in the to-be-reported quarter. The Zacks Consensus Estimate for combined ratio is pegged at 92, an improvement of 300 basis points, while the same for expense ratio is pegged at 35.8, an improvement of 5 basis points, both on a year-over-year basis.

The Zacks Consensus Estimate for the first-quarter bottom line is pegged at 61 cents, implying an increase of 10.9% from the year-ago reported quarter.

What Our Quantitative Model States

Our proven model does not conclusively predict an earnings beat for HRTG this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). But this is not the case, as you can see below.

Earnings ESP: Heritage Insurance has an Earnings ESP of 0.00% at present. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 61 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: HRTG currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Axis Capital Holdings (AXS - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $2.68, indicating an increase of 15% from the year-ago reported figure.

AXS earnings beat estimates in each of the last four reported quarters.

Skyward Specialty (SKWD - Free Report) has an Earnings ESP of +7.99% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2024 earnings stands at 66 cents, indicating an increase of 57.1% from the year-ago reported figure.

SKWD earnings beat estimates in each of the last four reported quarters.

Enact Holdings (ACT - Free Report) has an Earnings ESP of +5.05% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at 99 cents, indicating a decrease of 8.3% from the year-ago reported figure.

ACT earnings beat estimates in each of the last four reported quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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