Back to top

Image: Bigstock

Progressive (PGR) Up 2.1% Since Last Earnings Report: Can It Continue?

Read MoreHide Full Article

A month has gone by since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 2.1% in that time frame, underperforming 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 Q3 Earnings Surpass Estimates, Down Y/Y

The Progressive Corporation’s third-quarter 2019 earnings per share of $1.42 beat the Zacks Consensus Estimate of $1.33. However, the bottom line declined 9% from the year-ago quarter.

Behind the Headlines

Net premiums written were $9.6 billion in the quarter under review, up 12% from $8.6 billion in the year-ago period. Net premiums earned grew 14% year over year to $9 billion.

Net realized gains on securities were $65.4 million compared with $182.1 million in the year-ago quarter.

September Numbers Solid

Operating revenues were $2.9 million, up 13.1% year over year. The improvement can be attributed to 13.1% increase in premiums, 14.1% higher investment income, 9.8% growth in fees and other revenues and 18.1% rise in service revenues.

Total expenses increased 15.8% year over year to $2.7 billion due to 16.7% rise in loss and loss adjustment expenses, 12% increase in policy acquisition costs and 13.4% higher other underwriting expenses.

In September, policies in force were impressive at the Personal Auto segment, having improved 11% from the year-ago month to 14.6 million. Special Lines improved 3% from the prior-year month’s figure to 4.6 million.

In Progressive’s Personal Auto segment, Direct Auto grew 10% year over year to 6.9 million while Agency Auto improved 12% year over year to 7.7 million.

Progressive’s Commercial Auto segment rose 8% year over year to 0.7 million. The Property business had about 2.1 million policies in force in the month, up 15% year over year.

Financial Update

Progressive’s book value per share was $23.31, as of Sep 30, 2019, up 19.6% from $19.49 as of Sep 30, 2018.

Return on equity in September 2019 was 32.7%, having expanded 560 basis points year over year. Debt-to-total capital ratio improved 80 basis points year over year to 23.8% as of Sep 30, 2019.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, Progressive has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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

Progressive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Progressive Corporation (PGR) - free report >>

Published in