State Farm Partnership And European Auctions Will Fuel Future Markets

Analysts have modestly raised Hagerty’s fair value estimate from $12.75 to $13.17 per share, citing a balance of growth prospects and the need for further margin expansion to justify a higher stock valuation.

Analyst Commentary

Recent Street research reflects a mix of enthusiasm and caution regarding Hagerty’s future prospects and current valuation. Analysts have cited several factors shaping their outlook on the company’s growth trajectory, earnings potential, and near-term risks.

• Bullish analysts note Hagerty’s position as a global leader in specialty insurance for classic and enthusiast vehicles. They highlight its wide moat and limited competition.
• Macro tailwinds and an evolving business structure are expected to support robust growth, particularly as the company pursues additional revenues from its marketplace and media segments.
• Analysts identify 2026 as an inflection point, with accelerating premium growth, improved underwriting economics, and expanded relationships expected to drive operating leverage and mid-teens compounded growth.
• Earnings-per-share estimates from some analysts are above consensus through 2027, based on the expectation that investments will lead to meaningful margin expansion.

• Bearish analysts believe shares are fairly valued at current levels and emphasize the need for further margin expansion to justify significant upside in the stock valuation.
• Potential accounting-related challenges, particularly projected for 2026, introduce near-term uncertainty to the company’s financial performance and outlook.
• While partnerships and premium growth are promising, concerns remain about the sustainability of outperformance relative to sector peers and the timing of value realization for shareholders.
• The current valuation limits enthusiasm, with some analysts opting for a neutral rating while awaiting clearer evidence of execution and margin improvement.

What's in the News

• Hagerty, in partnership with Way, launched Safe Storage Concierge to provide five days of secure, enclosed storage for collector vehicles during severe weather in the Tampa and Miami areas. This service is available to insured members at no extra charge (Key Developments).
• Motorlux hosted a sold-out opening night for Monterey Car Week, featuring more than 275 collector cars, 15 aviation displays, and over $57.4 million in Broad Arrow auction sales. The event included record-breaking prices for modern collectibles (Key Developments).
• Hagerty completed a follow-on equity offering, raising approximately $90.6 million from the sale of 9.7 million shares of Class A Common Stock at $9.34 per share (Key Developments).
• The company upgraded its 2025 earnings guidance and now projects total revenue between $1,356 million and $1,368 million. Net income is expected to reach $112,000 to $120,000, reflecting significant growth over previous guidance (Key Developments).
• Lock-up agreements affecting over 90 million shares, restricted stock units, and Series A Convertible Preferred Stock will end on November 6, 2025. This could potentially impact future share liquidity (Key Developments).

Valuation Changes

• Fair Value Estimate has risen slightly from $12.75 to $13.17 per share.
• Discount Rate remains unchanged at 6.78%.
• Revenue Growth has declined modestly from 4.69% to 4.43%.
• Net Profit Margin has fallen from 16.76% to 15.38%.
• Future P/E has increased from 5.76x to 6.53x.