HCI Group (HCI): Revisiting Valuation After Upgraded Earnings Outlook and Higher Zacks Rank

HCI Group (HCI) just picked up a more favorable Zacks Rank after analysts sharply raised their full year earnings forecasts, a shift in expectations that helps explain the stock’s strong year to date climb.

See our latest analysis for HCI Group.

The upgraded earnings outlook seems to be feeding into a powerful trend, with HCI’s share price climbing to $187.47 and delivering a roughly 64% year to date share price return, backed by a 3 year total shareholder return near 500%. This suggests that momentum is still very much intact.

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With earnings estimates marching higher, a Zacks Rank upgrade in hand, and the stock still trading below consensus targets, investors now face a key question: is HCI undervalued or already pricing in its next leg of growth?

Most Popular Narrative: 19.9% Undervalued

Against HCI Group’s last close of $187.47, the most followed narrative points to a fair value of about $234, implying meaningful upside if its assumptions hold.

The proposed IPO and separation of Exzeo could unlock significant value by providing HCI a more tech-focused insurer profile, attracting greater investor interest while providing incremental capital for insurance expansion, improving book value and long-term earnings power.

Read the complete narrative.

Curious how a traditional insurer earns a growth style valuation? The narrative leans on compounding revenue, rising margins, and a surprisingly restrained future earnings multiple. Want to see how those levers combine to justify that target price and still build in a valuation discount?

Result: Fair Value of $234 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this optimistic path could be derailed if Florida catastrophe losses spike or if the Exzeo IPO undermines HCI’s technology edge and underwriting discipline.

Find out about the key risks to this HCI Group narrative.

Build Your Own HCI Group Narrative

If you see the story differently or prefer to dig into the numbers yourself, you can craft a custom narrative in just a few minutes using Do it your way.

A great starting point for your HCI Group research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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