HCI Group (HCI) came out with quarterly earnings of $5.35 per share, beating the Zacks Consensus Estimate of $4.49 per share. This compares to earnings of $3.65 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.15%. A quarter ago, it was expected that this property and casualty insurance holding company would post a loss of $2.75 per share when it actually produced earnings of $0.31, delivering a surprise of 111.27%.Over the ...

Financial Data and Key Metrics Changes - HCI Group reported a 17% increase in gross earned premiums compared to the same quarter last year [6] - The net combined ratio improved to 56% from 67% in Q1 2024 [6] - Pre-tax net income was just over $100 million, with earnings per share at $5.35, up from $3.81 in the same quarter last year [10][6] - The growth loss ratio was less than 20%, down from 31% in the same quarter last year, reflecting low claim volume [11] Business Line Data and Key Metrics Changes - Hailrow reciprocal exchange commenced operations, assuming approximately 14,000 policies and $35 million of premium [7] - Greenleaf, the real estate division, entered a multi-year lease agreement with GEICO for an office campus of 190,000 square feet, resulting in an off-balance sheet gain of approximately $85 million [8] - Exeo reported $52 million in revenue and $24 million in pre-tax income for Q1, assuming it operated as a standalone entity [20] Market Data and Key Metrics Changes - The homeowners insurance market is valued at over $150 billion, with Exeo currently operating in a small segment of this market [31] - Claim frequency was down more than 40% from the first quarter of last year, driven by legislative changes and favorable weather conditions [11] Company Strategy and Development Direction - HCI Group is focused on the separation of Exeo into a standalone company to eliminate conflicts of interest and pursue growth opportunities [21][67] - The company plans to redeem its 4.75% convertible senior notes, reducing debt by approximately $172 million [7] - The strategy includes leveraging Exeo's technology to expand into new markets and lines of business [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and the potential benefits of Exeo's spin-off for shareholders [21] - The company anticipates minor rate adjustments in the insurance market, with no imminent changes expected [58] - Management noted that the loss ratio is expected to normalize to around 24-25% in the absence of significant weather events [32] Other Important Information - Shareholder equity grew by almost $70 million during the quarter, with book value per share increasing by more than $6 [13] - The company expects to complete the conversion of convertible notes by the end of Q2, further strengthening the balance sheet [13] Q&A Session Summary Question: What areas of the homeowners market is Exeo best suited to target? - Management indicated that Exeo's technology has proven effective in Florida and other states, with plans to expand into various lines of business [28] Question: Can you quantify the impact of favorable weather on the gross loss ratio? - The loss ratio was under 20%, with expectations that a more normalized ratio would be around 24-25% [32] Question: What are the expectations for June 1 renewals? - Management noted that there is plenty of capacity in the market, indicating a stable reinsurance negotiation process [35] Question: What other options were considered for Exeo's separation? - Management discussed the spin-off as the best option to maximize shareholder value without needing additional capital [38] Question: How do Exeo's advantages differ for admitted versus non-admitted partners? - Management stated that the technology benefits both types of partners equally, optimizing profit margins and distribution [39] Question: What is the competitive landscape for the condo business? - Management acknowledged increased competition in the condo business but emphasized maintaining pricing discipline [43]

Financial Data and Key Metrics Changes - HCI Group reported a 17% increase in gross earned premiums compared to the same quarter last year [5] - The net combined ratio improved to 56% from 67% in Q1 2024 [5] - Pre-tax net income was just over $100 million, with earnings per share at $5.35, up from $3.81 in the same quarter last year [9] Business Line Data and Key Metrics Changes - The real estate division, Greenleaf, entered a new multi-year lease agreement with GEICO for an office campus of 190,000 square feet, contributing to an off-balance sheet gain of approximately $85 million [7] - Hailrow reciprocal exchange commenced operations, assuming about 14,000 policies and $35 million in premium from citizens [6] Market Data and Key Metrics Changes - The growth loss ratio was less than 20%, down from 31% in the same quarter last year, reflecting low claim volume [10] - Claim frequency was down more than 40% from Q1 last year, attributed to legislative changes and favorable weather conditions [10] Company Strategy and Development Direction - HCI Group is focused on the separation of Exio to allow it to operate as a standalone company, which is expected to unlock new growth opportunities [21] - The company aims to replicate its success in the homeowners insurance market by leveraging Exio's technology platform [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow revenue while enhancing profitability, with expectations for continued strengthening of the balance sheet [12] - The company anticipates completing the conversion of its convertible notes, which will further improve shareholder equity [12] Other Important Information - HCI Group plans to redeem its 4.75% convertible senior notes, reducing debt by approximately $172 million [6] - Exio reported $52 million in revenue and $24 million in pre-tax income for Q1, indicating strong margins and solid performance [20] Q&A Session Summary Question: What areas of the homeowners market is Exio best suited to target? - Management indicated that Exio's technology has proven effective in Florida and other states, with potential applications in various lines of business [28][31] Question: Can you quantify the impact of favorable weather on the gross loss ratio? - The loss ratio was under 20%, with expectations that a more normalized loss ratio might be around 24-25% [32][33] Question: What are the expectations for June 1 renewals? - Management noted that there is plenty of capacity in the market, indicating a stable negotiation environment for reinsurance [34] Question: Why choose a spin-off for Exio? - The spin-off is intended to maximize value creation for existing shareholders and resolve any potential conflicts of interest [39][67] Question: How does Exio's technology benefit potential partners? - Exio's technology optimizes the assembly of a book of business for partners, regardless of whether they are admitted or non-admitted carriers [40] Question: What is the competitive landscape for the condo business? - The condo business is becoming more competitive, but HCI Group maintains pricing discipline [43]

First Quarter Diluted EPS of $5.35 First Quarter Pre-Tax Income of $100.3 million Exzeo Ready to be Standalone Company Tampa, Fla. – May 8 , 2025 – HCI Group, Inc. (NYSE:HCI), reported pre-tax income of $100.3 million and net income of $74.2 million for the first quarter of 2025. Net income after noncontrolling interests was $69.7 million compared with $47.6 million in the first quarter of 2024. Diluted earnings per share were $5.35 in the first quarter of 2025, compared with $3.81 diluted earnings per shar ...

Core Insights - HCI Group, Inc. reported a strong financial performance for the first quarter of 2025, with a pre-tax income of $100.3 million and a net income of $74.2 million, reflecting significant growth compared to the same period in 2024 [2][3] - The company announced plans for a potential tax-free spin-off of its subsidiary Exzeo, which is set to become a standalone company by the end of the year [3] Financial Performance - The first quarter of 2025 saw diluted earnings per share (EPS) rise to $5.35, up from $3.81 in the first quarter of 2024, indicating a year-over-year increase of approximately 40.5% [2][15] - Consolidated gross premiums earned increased by 17.0% to $300.4 million in Q1 2025, compared to $256.6 million in Q1 2024, driven by policy assumptions from Citizens Property Insurance Corporation [3][15] - Net income after noncontrolling interests was $69.7 million in Q1 2025, compared to $47.6 million in Q1 2024, marking a year-over-year increase of 46.5% [2][15] Expense Management - Losses and loss adjustment expenses decreased to $59.3 million in Q1 2025 from $79.9 million in Q1 2024, resulting in a gross loss ratio of 19.7%, down from 31.1% in the previous year [5][21] - Policy acquisition and other underwriting expenses rose to $27.3 million in Q1 2025 from $22.1 million in Q1 2024, attributed to higher gross premiums earned [6][21] - General and administrative personnel expenses increased to $20.5 million in Q1 2025 from $16.3 million in Q1 2024, primarily due to higher accrued discretionary bonuses and employee benefits [6][21] Investment and Reinsurance - Net investment income for Q1 2025 was $13.8 million, slightly down from $14.1 million in Q1 2024, mainly due to decreased income from limited partnership investments [4][21] - Premiums ceded for reinsurance increased to $99.6 million in Q1 2025 from $68.1 million in Q1 2024, reflecting higher reinsurance costs associated with the growth in policies [4][21] Company Overview - HCI Group, Inc. operates two main units: insurance operations and Exzeo Group, which focuses on insurance technology innovations [10] - The company’s shares are traded on the New York Stock Exchange under the ticker symbol "HCI" and are included in the Russell 2000 and S&P SmallCap 600 Index [11]

Core Insights - HCI Group (HCI) is expected to report quarterly earnings of $4.49 per share, reflecting a year-over-year increase of 23% [1] - Anticipated revenues for the quarter are projected to be $210.17 million, showing a 1.7% increase compared to the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] Financial Metrics - Analysts predict 'Net investment income' will reach $14.96 million, representing a 6.4% increase from the prior-year quarter [3] - The 'Net premiums earned' are expected to be $197.61 million, indicating a year-over-year change of 4.8% [4] - The 'Expense Ratio' is estimated at 28.3%, up from 24.5% reported in the same quarter last year [4] - The 'Combined Ratio' is projected to be 71.5%, compared to 66.9% in the previous year [4] - The 'Loss Ratio' is expected to be 43.3%, slightly higher than the year-ago figure of 42.4% [5] Market Performance - HCI Group shares have increased by 7.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.4% change [5] - HCI holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [5]

Group 1 - HCI Group's stock closed at $145.83, reflecting a +1.65% change, outperforming the S&P 500's gain of 0.58% [1] - The stock has decreased by 3.87% over the past month, underperforming compared to the Finance sector's loss of 0.89% and the S&P 500's loss of 0.84% [1] Group 2 - HCI Group is expected to report earnings on May 8, 2025, with projected EPS of $4.49, indicating a 23.01% increase year-over-year [2] - Revenue is estimated at $210.17 million, reflecting a 1.72% increase from the same quarter last year [2] Group 3 - For the full year, earnings are forecasted at $14.98 per share and revenue at $881.26 million, representing increases of +102.16% and +17.49% respectively compared to the previous year [3] - Changes in analyst estimates are crucial as they indicate trends in business and profitability [3] Group 4 - The Zacks Rank system, which assesses estimate changes, indicates a strong correlation with stock price performance [4] - HCI Group currently holds a Zacks Rank of 1 (Strong Buy), suggesting positive sentiment among analysts [5] Group 5 - HCI Group's Forward P/E ratio is 9.57, which is lower than the industry average of 11.8, indicating a valuation discount [6] - The Insurance - Property and Casualty industry ranks 37 in the Zacks Industry Rank, placing it in the top 15% of over 250 industries [6]

Group 1 - HCI Group closed at $142.33, reflecting a -1.6% change from the previous day, underperforming compared to the S&P 500's gain of 1.67% [1] - Over the past month, HCI Group's shares increased by 2.98%, outperforming the Finance sector's decline of 4.45% and the S&P 500's drop of 6.57% [1] Group 2 - HCI Group is set to announce its earnings on May 8, 2025, with an expected EPS of $4.49, representing a 23.01% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is projected at $210.17 million, a 1.72% rise from the same quarter last year [2] Group 3 - For the full year, the Zacks Consensus Estimates predict earnings of $14.98 per share and revenue of $881.26 million, indicating increases of +102.16% and +17.49% respectively from the previous year [3] Group 4 - Recent modifications to analyst estimates for HCI Group reflect evolving short-term business trends, with positive revisions indicating analyst optimism about the company's profitability [4] Group 5 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows HCI Group currently holds a Zacks Rank of 1, suggesting strong buy potential [6] Group 6 - HCI Group's Forward P/E ratio is 9.65, which is lower than the industry's Forward P/E of 11.74, indicating a valuation discount [7] - The Insurance - Property and Casualty industry ranks in the top 14% of all industries, with a current Zacks Industry Rank of 33 [7]

HCI Group (HCI) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Over the past month, shares of this property and casualty insurance holding company have returned +6.6%, compared to the Zacks S&P 500 composite's -6.9% change. During this period, the Zacks Insurance - Property and Casualty industry, which HCI Group falls in, has lost 1.7%. The key question now is: What could be the stock ...

Group 1 - HCI Group (HCI) shares increased by 3.6% to close at $145, driven by notable trading volume and a 0.5% gain over the past four weeks [1] - The company's growth is fueled by a growing homeowners business, acquisition of profitable books, proactive risk management, and deployment of excess capital into investments [1][3] - HCI formed the Condo Owners Reciprocal Exchange to write commercial and residential insurance in Florida, leveraging technology and industry knowledge for growth [2] Group 2 - HCI Group is expected to report quarterly earnings of $4.49 per share, reflecting a year-over-year increase of 23%, with revenues projected at $210.17 million, up 1.7% from the previous year [3] - The consensus EPS estimate for HCI has remained unchanged over the last 30 days, indicating that stock price movements may be correlated with earnings estimate revisions [4][5] - HCI Group holds a Zacks Rank of 1 (Strong Buy), while its industry peer, First American Financial (FAF), has a Zacks Rank of 3 (Hold) and experienced a 2.1% decline in the last trading session [5][6]