Group 1 - Heritage Insurance Holdings, Inc. will participate in the Sidoti Year End Virtual Investor Conference on December 11, 2025, with CEO Ernie Garateix and CFO Kirk Lusk presenting at 3:15 PM Eastern Time [1] - Interested investors can access a live webcast of the presentation on Heritage's Investor Relations website, with an online replay available afterward [2] - Heritage Insurance is a super-regional property and casualty insurance holding company, writing approximately $1.4 billion of gross personal and commercial residential premium across multiple states [3]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Heritage Insurance (HRTG) - Heritage Insurance currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [3][4] - The stock has shown significant price increases, with a 20.4% rise over the past quarter and a remarkable 131.15% increase over the last year, compared to the S&P 500's 5.76% and 14.27% respectively [7] Price Performance - Over the past week, HRTG shares increased by 7.2%, while the Zacks Insurance - Property and Casualty industry rose by 1.12% [6] - The monthly price change for HRTG is 22.99%, outperforming the industry's 6.58% [6] Trading Volume - HRTG's average 20-day trading volume is 489,576 shares, which is a useful indicator of market interest and can signal bullish or bearish trends [8] Earnings Outlook - In the past two months, two earnings estimates for HRTG have been revised upwards, increasing the consensus estimate from $4.10 to $5.14 [10] - For the next fiscal year, two estimates have also moved upwards with no downward revisions, indicating positive earnings momentum [10] Conclusion - Given the strong performance metrics and positive earnings outlook, HRTG is positioned as a promising investment opportunity with a Momentum Score of B [12]

Core Insights - Heritage Insurance Holdings, Inc. (HRTG) shares have surged 136% year to date, significantly outperforming the industry, finance sector, and S&P 500 benchmarks [1] - The company is strategically positioned to benefit from effective underwriting and rate adequacy initiatives implemented over the past three years [1] Performance Comparison - HRTG's stock performance of 136% year to date contrasts sharply with the industry's 12%, finance sector's 15%, and S&P 500's 18.9% gains [1] - Peer companies HCI Group Inc. and Universal Insurance Holdings have seen gains of 50.8% and 55.4% respectively over the past three months [4] Strategic Focus - Heritage Insurance is prioritizing profitability through rate adequacy, disciplined underwriting, and cautious market expansion [5] - The company has resumed writing personal lines business due to legislative reforms in Florida and improved reinsurance pricing [5][8] - Heritage aims to gradually increase its in-force policy count through 2025 and 2026 while maintaining strict capital allocation [6] Risk Management - The company has broadened its geographic footprint, with 71.1% of total insured value located outside Florida, enhancing risk diversification [7] - Heritage's excess and surplus (E&S) segment is a key growth driver, supported by expansion into additional states and a robust reinsurance program [9] Technological Investments - Targeted technology investments, including Guidewire Cloud and advanced pricing analytics, are enhancing underwriting precision and claims performance [10] Earnings Estimates - The Zacks Consensus Estimate for HRTG's 2025 earnings indicates a 155.7% year-over-year increase, while the 2026 estimate suggests a 14.3% decrease [13] - Recent revisions show a 25.4% increase in the 2025 earnings estimate over the past 30 days [11] Profitability Metrics - HRTG's return on equity stands at 41.4%, significantly higher than the industry average of 8% [14] - The return on invested capital (ROIC) is 31.3%, also above the industry average of 6.2% [14] Valuation Insights - HRTG is currently trading at a price-to-book multiple of 2.03, above the industry average of 1.54, indicating a premium valuation [15] - The stock is considered cheaper than HCI Group but more expensive compared to Universal Insurance Holdings [16] Growth Outlook - The company’s growth outlook is supported by a strengthening commercial residential segment, improved E&S performance, and rising revenues [17] - The average target price of $35.50 implies a potential upside of about 22% from the current stock price [17]

Industry Overview - The Zacks Property and Casualty Insurance industry ranks within the top 10% of 243 Zacks industries, currently holding a Zacks Industry Rank of 24, indicating strong growth potential driven by better pricing, prudent underwriting, increased exposure, an improving rate environment, solid capital positions, and ongoing economic expansion [1] Price Performance - The property and casualty (P&C) insurance industry has returned 12% year-to-date, compared to the Finance sector's 15% and the Zacks S&P 500 composite's 19% growth. Notable outperformers include Heritage Insurance Holdings, The Travelers Companies, and HCI Group, which have shown strong fundamentals and are expected to maintain their growth trajectory [2] Driving Forces - Global commercial insurance rates fell by 4% in Q3 2025, marking the fifth consecutive quarterly decline due to increased competition among insurers, favorable reinsurance pricing, and expanded market capacity [3][8] - Catastrophe losses are influencing policy renewal rates, with global insured losses from natural catastrophes reaching $80 billion in the first half of 2025, nearly double the 10-year average [5] Premium Growth - Price hikes, operational strength, higher retention, and the appointment of retail agents are expected to drive higher premiums, with gross premiums projected to exceed $722 billion by 2030 [4] Technological Investment - The insurance industry is heavily investing in technology, including blockchain, AI, and advanced analytics, which is expected to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, with a CAGR of nearly 80% [11] Company Highlights Heritage Insurance - Heritage Insurance is focused on personal and commercial residential insurance, with a consensus estimate for 2025 earnings per share indicating a year-over-year increase of 155.7% and revenues projected at $844.62 million, reflecting a 3.3% improvement [15] - The company has a Zacks Rank of 1 and has seen its shares rally by 140.1% year-to-date, with a return on equity of 41.44%, significantly above the industry average [16] The Travelers Companies - The Travelers Companies offers a wide range of property and casualty insurance products, with a consensus estimate for 2025 earnings per share indicating a 14.6% year-over-year increase and revenues projected at $48.83 billion, a 5.1% improvement [18] - The company has raised its dividend for 21 consecutive years at a CAGR of 8% and has a Zacks Rank of 1, with shares up 21.6% year-to-date [20] HCI Group - HCI Group operates in property and casualty insurance, with a consensus estimate for 2025 earnings per share indicating a year-over-year increase of 173.8% and revenues projected at $892.05 million, reflecting an 18.9% improvement [22] - The company has a Zacks Rank of 2, with shares rallying by 52.5% year-to-date and a return on equity of 31.18%, also above the industry average [23]

Core Insights - Two stocks in the financial sector are signaling potential warnings for momentum-focused investors as of November 14, 2025 [1] Company Summaries - **Forge Global Holdings Inc (NYSE:FRGE)**: - UBS analyst Alex Kramm downgraded the stock from Buy to Neutral while raising the price target from $34 to $45 - The stock has surged approximately 150% over the past month, reaching a 52-week high of $44.76 - The RSI value is at 88, indicating overbought conditions - On the latest trading day, shares fell 0.7% to close at $44.11 - The stock has a momentum score of 98.16 [3][7] - **Heritage Insurance Holdings Inc (NYSE:HRTG)**: - The company reported third-quarter EPS of $1.63 on sales of $195.1 million - CEO Ernie Garateix highlighted successful strategic initiatives leading to an increase in earnings trajectory since late 2023 - The stock has gained around 10% over the past five days, with a 52-week high of $31.10 - The RSI value is at 74.9, also indicating overbought conditions - Shares rose 3.4% to close at $30.84 on the latest trading day [4][7]

Group 1 - As of November 14, 2025, two stocks in the financial sector are identified as potentially overbought, which may concern momentum-focused investors [1] - The Relative Strength Index (RSI) is highlighted as a key momentum indicator, with a value above 70 indicating that a stock may be overbought [2] Group 2 - Forge Global Holdings Inc (NYSE:FRGE) has seen a stock price increase of approximately 150% over the past month, with a current RSI value of 88 and a recent closing price of $44.11 [7] - UBS analyst Alex Kramm downgraded Forge Global Holdings from Buy to Neutral, while raising the price target from $34 to $45 [7] - Heritage Insurance Holdings Inc (NYSE:HRTG) reported third-quarter EPS of $1.63 on sales of $195.1 million, with a recent stock price increase of 10% over the past five days and a closing price of $30.84 [7] - The CEO of Heritage Insurance noted that the company has focused on disciplined underwriting and quality customer service, leading to significant earnings power and record in-force premiums [7]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Heritage Insurance (HRTG) - Heritage Insurance currently holds a Momentum Style Score of B, indicating potential for strong performance [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting it is expected to outperform the market [3] Price Performance - HRTG shares have increased by 25.01% over the past week, significantly outperforming the Zacks Insurance - Property and Casualty industry, which rose by 4.15% [5] - Over the past month, HRTG's price change is 16.58%, compared to the industry's 1.93% [5] - In the last quarter, HRTG shares rose by 37.78%, and over the past year, they have increased by 142.13%, while the S&P 500 only moved 6.44% and 13.97% respectively [6] Trading Volume - HRTG's average 20-day trading volume is 453,453 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for HRTG has increased, raising the consensus estimate from $4.10 to $4.69 [9] - For the next fiscal year, two estimates have moved upwards with no downward revisions [9] Conclusion - Considering the strong price performance, positive earnings outlook, and favorable momentum indicators, HRTG is positioned as a solid momentum pick with a 1 (Strong Buy) rating [11]

Financial Performance - Total revenues for Q3 2025 reached $212.5 million, a slight increase from $211.8 million in Q3 2024, while net premiums earned decreased to $195.1 million from $198.8 million year-over-year [15]. - Net income for Q3 2025 was $50.4 million, significantly up from $8.2 million in Q3 2024, resulting in earnings per share of $1.63 compared to $0.27 in the prior year [15]. - Net income for the nine months ended September 30, 2025, was $128,919 thousand, a significant increase from $41,246 thousand in the same period of 2024, representing a growth of approximately 212% [24]. - For the nine months ended September 30, 2025, net income attributable to common stockholders was $128.9 million, with a basic earnings per share of $4.17, compared to $41.2 million and $1.35 in 2024 [66]. - Third quarter 2025 net income was $50.4 million or $1.63 per diluted share, a significant increase from $8.2 million or $0.27 per diluted share in the prior year quarter, primarily due to a 42.5% reduction in losses and loss adjustment expenses (LAE) and lower operating expenses [164]. - Net income for the nine months ended September 30, 2025, was $128.9 million, a 212.6% increase from $41.2 million in the prior year period, driven by higher net premiums earned and a significant decrease in losses and LAE [202]. Assets and Liabilities - The company reported a total assets decrease to $2.37 billion as of September 30, 2025, down from $2.47 billion at the end of 2024 [14]. - The company’s total liabilities decreased to $1.93 billion from $2.18 billion, reflecting a reduction in financial obligations [14]. - Total stockholders' equity increased to $437.3 million as of September 30, 2025, compared to $290.8 million at the end of 2024, driven by retained earnings growth [14]. - The total long-term debt as of September 30, 2025, was $79,253,000, down from $116,319,000 as of December 31, 2024, representing a decrease of approximately 31.9% [114]. - The combined statutory surplus for the Company's insurance subsidiaries was $352.2 million at September 30, 2025, up from $285.5 million at December 31, 2024, indicating an increase of approximately 23.4% [118]. Cash Flow and Investments - Cash and cash equivalents increased to $560.4 million from $452.7 million, reflecting a stronger liquidity position [14]. - Net cash provided by operating activities was $168,432 thousand for the nine months ended September 30, 2025, compared to $143,173 thousand in 2024, indicating an increase of approximately 18% [24]. - Total cash, cash equivalents, and restricted cash at the end of the period was $573,725 thousand, up from $463,645 thousand at the beginning of the period, marking an increase of about 24% [26]. - The company reported net investment income of $9.7 million for Q3 2025, slightly down from $9.8 million in Q3 2024 [15]. - The net investment income, less investment expenses, for the nine months ended September 30, 2025, is $27,295,000, compared to $28,121,000 in 2024 [43]. Premiums and Reinsurance - Gross premiums written for Q3 2025 were $333.2 million, up from $313.0 million in Q3 2024, indicating growth in premium generation [15]. - The company ceded 46.0% of net premiums under the Net Quota Share program for the current year, with an occurrence limit of $20.0-$25.0 million for catastrophe losses [86]. - Ceded premiums for the nine months ended September 30, 2025, were $594,218,000, compared to $583,876,000 for the same period in 2024 [92]. - The Company has catastrophe excess of loss reinsurance coverage of up to $1.6 billion for Heritage P&C, $1.1 billion for NBIC, and $865 million for Zephyr for the 2025-2026 period [83]. Losses and Expenses - Unpaid losses and loss adjustment expenses decreased to $649.6 million from $1.04 billion, indicating improved claims management [14]. - The Company experienced a reduction in losses and loss adjustment expenses to $74.8 million in Q3 2025 from $130.0 million in Q3 2024 [15]. - Total incurred losses for the three months ended September 30, 2025, were $74.8 million, compared to $130.0 million for the same period in 2024, indicating a decrease of approximately 42.5% [94]. - The net loss ratio improved to 38.3%, a 27.1 point decrease from 65.4% in the same quarter last year, reflecting significantly lower net losses and LAE [182]. - Losses and LAE incurred were $249.8 million for the nine months ended September 30, 2025, a 26.1% decrease from $338.0 million in the prior year period, primarily due to lower weather and attritional losses [197]. Stock and Compensation - Stock-based compensation increased to $4,152 thousand for the nine months ended September 30, 2025, compared to $2,248 thousand in 2024, reflecting a rise of about 84% [24]. - The Company recognized stock-based compensation for an additional 217,877 shares of performance-based restricted stock due to expected maximum achievement of performance conditions [138]. - The Company awarded a total of 163,640 shares of time-based restricted stock and 253,918 shares of performance-based restricted stock, with a fair value of $7.02 per share at the time of grant [141]. - The Company repurchased 85,135 shares of common stock at an average cost of $20.74 per share under the 2025 Share Repurchase Plan [131]. Tax and Regulatory - The Company recorded income tax expense of $17.9 million for the three months ended September 30, 2025, with an effective tax rate of 26.2%, compared to $0.8 million and 9.4% in 2024 [74]. - The effective tax rate increased to 26.2% from 9.4% in the prior year quarter, reflecting changes in estimates used for income tax provisions [181]. - The Company has no significant uncertain tax positions or unrecognized tax benefits that would impact the effective income tax rate as of September 30, 2025 [77]. Market Conditions - The Company experienced rising inflation, impacting labor and material costs, but noted that inflation is increasing at a lower rate than in previous years [160].

Core Insights - Heritage is a relatively small insurer in Florida with revenues of $1.43 billion and a market capitalization of $773 million [1] Company Overview - Heritage has diversified its operations beyond Florida, indicating a strategic move to mitigate regional risks and expand its market presence [1]

Financial Data and Key Metrics Changes - The company reported a net income of $50.4 million, significantly up from $8.2 million in the same quarter last year, reflecting a strong earnings trajectory [4][14] - For the nine months ended September 30, net income reached $129 million, compared to $41 million for the same period in 2024, indicating substantial growth [14] - Gross premiums earned increased to $362 million, up 2.2% from $354.2 million in the prior year quarter, driven by rate actions and organic growth [15] - Net premiums earned decreased by 1.9% to $195.1 million due to increased ceded premiums, with a ceded premium ratio rising to 46.1% from 43.9% [15][16] - The net loss ratio improved to 38.3%, down from 65.4% in the same quarter last year, reflecting lower net losses and loss adjustment expenses [16][17] - The net combined ratio improved to 72.9%, a significant reduction from 100.6% in the prior year quarter [18] Business Line Data and Key Metrics Changes - The company has seen a steady contraction in policies in force over the last four years, with in-force premium increasing from approximately $1.1 billion to a record $1.44 billion [5] - New business premium written for the third quarter was $36 million, a 166% increase from $13.7 million in the same quarter last year [5] - The decline in policy count moderated, with a decrease of 6,800 policies in the third quarter compared to over 19,000 in the same quarter of 2024 [6] Market Data and Key Metrics Changes - The company has opened nearly all geographies to new business, compared to only 30% a year ago, indicating a positive shift in market engagement [5] - The company has maintained strong relationships with agents and brokers, which is expected to support growth in the upcoming year [7] Company Strategy and Development Direction - The company is focused on strategic initiatives aimed at generating consistent shareholder returns through rate adequacy, exposure management, and improved underwriting discipline [4][12] - There is an emphasis on disciplined underwriting processes and selective growth across 16 states, with plans to explore new regions and product offerings [10][11] - The company restarted its share repurchase program, repurchasing 106,000 shares for $2.3 million, indicating confidence in its stock valuation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the reinsurance market, anticipating improved pricing due to a favorable litigation environment and increased capacity [12] - The company expects to deliver policy count growth in 2026, supported by strong agency relationships and improved market conditions [6][20] - Management highlighted the importance of maintaining a conservative investment portfolio while seeking growth opportunities [16][20] Other Important Information - The total assets at the end of the quarter were $2.4 billion, with shareholders' equity of $437.3 million, and book value per share increased to $14.15 [18][19] - The company noted a favorable development of $5 million in net loss development, indicating a stable underlying portfolio [17][50] Q&A Session Summary Question: Growth prospects in Florida vs outside Florida - Management indicated that there is still significant opportunity in Florida, with strong agency relationships and new business premiums gaining momentum [25][30] Question: Pricing and competitive environment in Florida - Management confirmed that they have a pending filing for a rate decrease and anticipate a single-digit rate decrease in 2026, while noting that commercial property remains under pressure [27][28] Question: Support for growth with current surplus - Management stated that the increase in statutory surplus provides substantial capacity for growth, estimating the ability to write over $225 million to $250 million in premium based on the surplus increase [39][40] Question: Capital priorities and potential for further buybacks - Management outlined capital priorities as growth, stock buybacks, and dividends, indicating that they view their stock as undervalued and may act on further buybacks soon [41][42]