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Heritage Insurance Zooms Past S&P 500 YTD: Time to Buy the Stock?
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Key Takeaways
Heritage Insurance shares surged 96.1% YTD, far outpacing the S&P 500 and its peers.
HRTG is resuming measured growth after reforms, focusing on rate adequacy and selective markets.
As much as 71% of its insured value now lies outside Florida, reducing risk and improving claims performance.
Shares of Heritage Insurance Holdings, Inc. (HRTG - Free Report) have rallied 96.1% year to date, outperforming the Zacks S&P 500 composite’s rise of 10.1%. The stock also outpaced the industry’s increase of 9.6% and the sector’s rise of 12.9% in the same time frame.
This super-regional U.S. property and casualty insurance holding company is well-positioned to benefit from prudent underwriting execution and rate adequacy initiatives implemented over the past three years.
Its peer HCI Group Inc. (HCI - Free Report) , a Florida-based company with operations in property and casualty insurance, information technology services, insurance management, real estate and reinsurance, has gained 43.1% year to date, while another peer Universal Insurance Holdings (UVE - Free Report) , operating as an integrated insurance holding company in the United States, has gained 15.8% in the same time frame.
HRTG vs Industry, Sector, S&P YTD
Image Source: Zacks Investment Research
What’s Driving HRTG?
Heritage Insurance is sharpening its focus on profitability through rate adequacy, profit-oriented underwriting standards and a cautious approach to new business in saturated or underperforming markets.
Amid declining returns and a challenging reinsurance environment, the company halted the issuance of new personal lines policies in Florida and the Northeast in December 2022. However, recent legislative reforms in Florida and more stable reinsurance pricing have created new opportunities. In response, Heritage has resumed writing personal lines policies, though under a measured growth strategy.
For 2025, the insurer’s plan centers on selectively re-entering profitable markets while allocating capital in a disciplined way to safeguard margins. The company is committed to maintaining rate adequacy, using advanced data analytics to manage exposures effectively, and leveraging its operational platform to support sustainable expansion. Heritage expects its in-force policy count to stabilize and gradually grow in 2025 and 2026.
To strengthen its business profile, the insurer has diversified its portfolio, enhancing risk distribution, improving claims trends and reducing reinsurance costs. As of June 30, 2025, approximately 71% of its total insured value (TIV) was outside Florida and 66.2% was spread beyond the Southeast, reflecting broad exposure across the Northeast, Mid-Atlantic, West and Pacific regions.
The excess and surplus (E&S) segment remains a key growth engine, with the company pursuing expansion into additional states. Heritage’s reinsurance strategy continues to provide strong protection against hurricanes and severe weather in coastal markets. The company anticipates a meaningful reduction in its ceded premium ratio, driven by cost-efficient enhancements to its reinsurance program and higher gross premiums earned. Notably, Heritage recently completed placement of its 2025–2026 indemnity-based catastrophe excess-of-loss reinsurance program for its insurance subsidiaries.
In parallel, Heritage is investing strategically in technology, especially in InsurTech. Initiatives such as Guidewire Cloud adoption, its partnership with Slide, advanced predictive modeling, cloud-based solutions and pricing analytics are enhancing underwriting expertise, strengthening competitive positioning and improving claims handling efficiency.
Northbound Estimate Revision Trend
The Zacks Consensus Estimate for HRTG’s 2025 and 2026 earnings has moved 26.2% and 12.8% north, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The consensus estimates for 2025 and 2026 earnings of HCI Group also witnessed northward movement in the past 30 days. But Universal Insurance Holdings witnessed no estimate movement in the same time frame.
Optimistic Growth Estimates for HRTG
The Zacks Consensus Estimate for the company’s 2025 and 2026 EPS implies a 104% and 1.2% year-over-year increase, respectively. HRTG has a Growth Score of B.
HRTG’s Favorable Return on Capital
Return on equity in the trailing 12 months was 33.4% higher than the industry average of 7.7%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders' equity.
Image Source: Zacks Investment Research
Its return on invested capital (ROIC) has been increasing for quite some time. This reflects HRTG’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 24.5%, higher than the industry average of 5.9%.
Image Source: Zacks Investment Research
HRTG Shares Are Expensive
The stock is overvalued compared to its industry. It is currently trading at a price-to-book multiple of 1.84, higher than the industry average of 1.57. But it has a Value Score of B.
Image Source: Zacks Investment Research
HRTG is cheaper than HCI Group but expensive when compared with Universal Insurance Holdings.
How to Play HRTG Stock
A growing commercial residential business, expanding personal lines capacity, improving E&S business, better pricing, increasing top line, expanding margins and solid earnings bode well for HRTG’s growth. Its VGM Score of A and strategic focus on accelerating growth raise optimism. The average target price of $29 reflects a 27.4% upside potential to yesterday’s closing price.
Image: Bigstock
Heritage Insurance Zooms Past S&P 500 YTD: Time to Buy the Stock?
Key Takeaways
Shares of Heritage Insurance Holdings, Inc. (HRTG - Free Report) have rallied 96.1% year to date, outperforming the Zacks S&P 500 composite’s rise of 10.1%. The stock also outpaced the industry’s increase of 9.6% and the sector’s rise of 12.9% in the same time frame.
This super-regional U.S. property and casualty insurance holding company is well-positioned to benefit from prudent underwriting execution and rate adequacy initiatives implemented over the past three years.
Its peer HCI Group Inc. (HCI - Free Report) , a Florida-based company with operations in property and casualty insurance, information technology services, insurance management, real estate and reinsurance, has gained 43.1% year to date, while another peer Universal Insurance Holdings (UVE - Free Report) , operating as an integrated insurance holding company in the United States, has gained 15.8% in the same time frame.
HRTG vs Industry, Sector, S&P YTD
Image Source: Zacks Investment Research
What’s Driving HRTG?
Heritage Insurance is sharpening its focus on profitability through rate adequacy, profit-oriented underwriting standards and a cautious approach to new business in saturated or underperforming markets.
Amid declining returns and a challenging reinsurance environment, the company halted the issuance of new personal lines policies in Florida and the Northeast in December 2022. However, recent legislative reforms in Florida and more stable reinsurance pricing have created new opportunities. In response, Heritage has resumed writing personal lines policies, though under a measured growth strategy.
For 2025, the insurer’s plan centers on selectively re-entering profitable markets while allocating capital in a disciplined way to safeguard margins. The company is committed to maintaining rate adequacy, using advanced data analytics to manage exposures effectively, and leveraging its operational platform to support sustainable expansion. Heritage expects its in-force policy count to stabilize and gradually grow in 2025 and 2026.
To strengthen its business profile, the insurer has diversified its portfolio, enhancing risk distribution, improving claims trends and reducing reinsurance costs. As of June 30, 2025, approximately 71% of its total insured value (TIV) was outside Florida and 66.2% was spread beyond the Southeast, reflecting broad exposure across the Northeast, Mid-Atlantic, West and Pacific regions.
The excess and surplus (E&S) segment remains a key growth engine, with the company pursuing expansion into additional states. Heritage’s reinsurance strategy continues to provide strong protection against hurricanes and severe weather in coastal markets. The company anticipates a meaningful reduction in its ceded premium ratio, driven by cost-efficient enhancements to its reinsurance program and higher gross premiums earned. Notably, Heritage recently completed placement of its 2025–2026 indemnity-based catastrophe excess-of-loss reinsurance program for its insurance subsidiaries.
In parallel, Heritage is investing strategically in technology, especially in InsurTech. Initiatives such as Guidewire Cloud adoption, its partnership with Slide, advanced predictive modeling, cloud-based solutions and pricing analytics are enhancing underwriting expertise, strengthening competitive positioning and improving claims handling efficiency.
Northbound Estimate Revision Trend
The Zacks Consensus Estimate for HRTG’s 2025 and 2026 earnings has moved 26.2% and 12.8% north, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The consensus estimates for 2025 and 2026 earnings of HCI Group also witnessed northward movement in the past 30 days. But Universal Insurance Holdings witnessed no estimate movement in the same time frame.
Optimistic Growth Estimates for HRTG
The Zacks Consensus Estimate for the company’s 2025 and 2026 EPS implies a 104% and 1.2% year-over-year increase, respectively. HRTG has a Growth Score of B.
HRTG’s Favorable Return on Capital
Return on equity in the trailing 12 months was 33.4% higher than the industry average of 7.7%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders' equity.
Image Source: Zacks Investment Research
Its return on invested capital (ROIC) has been increasing for quite some time. This reflects HRTG’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 24.5%, higher than the industry average of 5.9%.
Image Source: Zacks Investment Research
HRTG Shares Are Expensive
The stock is overvalued compared to its industry. It is currently trading at a price-to-book multiple of 1.84, higher than the industry average of 1.57. But it has a Value Score of B.
Image Source: Zacks Investment Research
HRTG is cheaper than HCI Group but expensive when compared with Universal Insurance Holdings.
How to Play HRTG Stock
A growing commercial residential business, expanding personal lines capacity, improving E&S business, better pricing, increasing top line, expanding margins and solid earnings bode well for HRTG’s growth. Its VGM Score of A and strategic focus on accelerating growth raise optimism. The average target price of $29 reflects a 27.4% upside potential to yesterday’s closing price.
Despite its premium valuation, it is worth adding this Zacks Rank #2 (Buy) stock to your portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.