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Progressive (PGR) Up 11.9% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 11.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Progressive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Progressive's Q4 Earnings, Revenues Beat on Higher Premiums

 Progressive's  fourth-quarter 2024 earnings per share of $4.08 beat the Zacks Consensus Estimate by 19%. The bottom line increased 37.8% year over year. 

Operating revenues increased 20.3% year over year to $20.3 billion and beat the consensus estimate by 2.5%.

Behind the Headlines

Net premiums written were $18.1 billion in the quarter, up 20% from $15.1 billion a year ago.
 
Net premiums earned grew 21% to $19.1 billion. The reported figure surpassed the Zacks Consensus Estimate of $18.7 billion. 


Net realized loss on securities was $53 million versus a gain of $303 million in the year-ago quarter. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 basis points (bps) from the prior-year quarter’s level to 87.9.

Full-Year Highlights

Operating revenues increased 21.6% year over year to $75.1 billion, driven by 20.7% higher net premiums earned, a 49.7% increase in net investment income, a 19.7% rise in fees and 33.2% higher service. 

Total expenses increased 13% to $64.7 billion, attributable to 7.5% higher losses and loss adjustment expenses, a 15.4% increase in policy acquisition costs and a 51.6% surge in other underwriting expenses.

Combined ratio improved 610 bps to 88.8. 

December Policies in Force

Policies in force were solid in the Personal Lines segment, increasing 18% from the year-ago month’s figure to 33.8 million. Special Lines improved 9% to 6.5 million.

In the Personal Auto segment, Direct Auto increased 25% year over year to 14 million, while Agency Auto increased 17% to 9.8 million. Progressive’s Commercial Auto segment rose 4% year over year to 1.1 million. The Property business had 3.5 million policies in force, up 14%.

Financial Update

Progressive’s book value per share was $43.67 as of Dec. 30, 2024, up 29.2% from $33.80 as of Dec. 30, 2023.

Return on equity in December 2024 was 36.4%, up from 30% reported in the year-ago period. The total debt-to-total capital ratio improved 420 bps to 21.2.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

The consensus estimate has shifted 17.91% due to these changes.

VGM Scores

Currently, Progressive has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Progressive has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Progressive belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Chubb (CB - Free Report) , has gained 2.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.

Chubb reported revenues of $14.29 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $6.02 for the same period compares with $8.30 a year ago.

Chubb is expected to post earnings of $3.50 per share for the current quarter, representing a year-over-year change of -35.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -40.8%.

Chubb has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.


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