Financial Performance - Premiums-in-force increased by 0.5% year-over-year, reaching $1.43 billion in Q2 2025[49] - Total insured value decreased by 4.7% compared to Q2 2024[50] - Policy count decreased by 11.9% compared to Q2 2024, reflecting selective underwriting[50] - Net combined ratio improved significantly, decreasing by 19.6 points to 72.9%[66] - Net loss ratio decreased by 17.2 points to 38.5%, driven by lower net losses and LAE[66] - Earnings before taxes increased by $38.1 million year-over-year to $63.0 million in Q2 2025[64] Strategic Initiatives - The company is shifting towards a controlled growth strategy, leveraging existing infrastructure while focusing on risk management and underwriting[35] - Diversification efforts have resulted in 71.1% of total insured value positioned outside of Florida as of Q2 2025[23] - A new share repurchase plan authorized $10.0 million through December 31, 2025[68] Reinsurance Program - The 2025 CAT XOL limit includes $1.1 billion in the Northeast, $1.6 billion in the Southeast, and $865 million in Hawaii[38]

Core Viewpoint - Heritage Insurance reported a revenue of $208.04 million for the quarter ended June 2025, marking a year-over-year increase of 2.2% and an EPS of $1.55, significantly higher than the $0.61 from the previous year, indicating strong earnings performance despite missing revenue estimates [1]. Financial Performance - The reported revenue of $208.04 million was below the Zacks Consensus Estimate of $212.13 million, resulting in a revenue surprise of -1.93% [1]. - The company achieved an EPS surprise of +50.49%, with the consensus EPS estimate being $1.03 [1]. - Heritage Insurance's shares have returned -8.4% over the past month, contrasting with the Zacks S&P 500 composite's +1% change, reflecting underperformance relative to the broader market [3]. Key Metrics - Ceded Premium Ratio was reported at 44.5%, slightly above the estimated 44.4% [4]. - Combined Ratio stood at 72.9%, significantly better than the average estimate of 83.6% [4]. - Expense Ratio was reported at 34.4%, lower than the average estimate of 35.1% [4]. - Net investment income was $9.03 million, exceeding the average estimate of $8.63 million, but showing a year-over-year decline of -7.5% [4]. - Net premiums earned were $196.32 million, slightly below the average estimate of $200.11 million, reflecting a year-over-year increase of +3.2% [4]. - Other revenue was reported at $2.68 million, below the average estimate of $3.38 million, indicating a year-over-year decrease of -22.8% [4].

Core Viewpoint - Heritage Insurance (HRTG) reported quarterly earnings of $1.55 per share, significantly exceeding the Zacks Consensus Estimate of $1.03 per share, and showing a substantial increase from $0.61 per share a year ago [1][2] Earnings Performance - The earnings surprise for the quarter was +50.49%, following a previous quarter where the company had a surprise of +115.22% by reporting earnings of $0.99 per share against an expectation of $0.46 [2] - Over the last four quarters, Heritage Insurance has consistently surpassed consensus EPS estimates [2] Revenue Analysis - The company reported revenues of $208.04 million for the quarter ended June 2025, which was 1.93% below the Zacks Consensus Estimate, but an increase from $203.57 million year-over-year [3] - Heritage Insurance has exceeded consensus revenue estimates twice in the last four quarters [3] Stock Performance - Since the beginning of the year, Heritage Insurance shares have increased by approximately 75.3%, in contrast to the S&P 500's gain of 7.6% [4] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.26 for the upcoming quarter and $3.25 for the current fiscal year, alongside expected revenues of $214.11 million and $854.9 million respectively [5][8] - The Zacks Rank for Heritage Insurance is currently 3 (Hold), indicating expected performance in line with the market in the near future [7] Industry Context - The Insurance - Property and Casualty industry is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the overall industry outlook may impact the stock's performance [9]

Core Insights - Heritage Insurance Holdings, Inc. reported strong financial results for the second quarter of 2025, highlighting a successful execution of strategic initiatives that have positively impacted earnings since late 2023 [3][12][32] - The company has focused on disciplined underwriting and improving customer service, which has led to significant earnings power and a favorable market position for growth [3][4] Financial Performance - Total revenues for Q2 2025 were $208.0 million, a 2.2% increase from $203.6 million in Q2 2024 [6][30] - Net income reached $48.0 million or $1.55 per diluted share, a substantial increase of 154.5% from $18.9 million or $0.61 per diluted share in the prior year quarter [7][12] - The net loss ratio improved to 38.5%, a 17.2-point decrease from 55.7% in the same quarter last year, reflecting lower losses and better underwriting performance [18][20] Strategic Initiatives - The company has suspended quarterly shareholder dividends to prioritize strategic growth, with ongoing evaluations for future dividend distributions and stock repurchases [5] - Key strategic initiatives include generating underwriting profit through rate adequacy, maintaining a balanced portfolio, and enhancing customer service and claims capabilities [8][4] Underwriting and Premiums - Gross premiums written were $411.0 million, down 3.2% from $424.5 million in the prior year quarter, while gross premiums earned increased by 1.0% to $353.6 million [14][15] - Net premiums earned rose by 3.2% to $196.3 million, driven by higher gross premiums and a reduction in ceded premiums [16][7] Book Value and Equity - Book value per share increased to $12.36 as of June 30, 2025, up 48.6% from $8.32 a year earlier, primarily due to net income and a reduction in unrealized losses on fixed income securities [26][12] - Return on average equity improved to 53.9%, up from 30.8% in the prior year quarter, indicating strong profitability [9][12] Market Position - The company has opened nearly all of its capacity for new business, compared to only 30% a year ago, which has contributed to a 46.3% increase in new business premiums written [3][12] - Premiums-in-force totaled $1.43 billion, reflecting a slight increase of 0.5% compared to $1.42 billion in Q2 2024 [13][24]

Core Insights - Heritage Insurance (HRTG) is anticipated to show improvements in both revenue and earnings for Q2 2025, with revenues expected to reach $212.7 million, reflecting a 4.2% year-over-year increase [1] - The earnings consensus estimate stands at $1.03 per share, indicating a significant year-over-year increase of 68.8% [2] Financial Performance - HRTG has a strong earnings surprise history, having beaten the Zacks Consensus Estimates in the last four quarters with an average surprise of 363.17% [3] - The company’s Earnings ESP is currently at 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are aligned at $1.03 per share [5] - HRTG holds a Zacks Rank of 3, suggesting a neutral outlook [5] Factors Influencing Q2 Results - The anticipated Q2 results are expected to benefit from rate adequacy, managed exposures, and enhanced underwriting discipline [6] - Gross premiums earned are projected to improve due to rate adequacy and organic growth in various business lines [6] - Net investment income is expected to be positively impacted by a high-quality portfolio of short-duration assets, with a consensus estimate of $8.6 million [7] Profitability and Expense Management - Total revenues are likely to increase due to higher premiums and net investment income [7] - The company’s strategic focus on reducing exposure in unprofitable areas while enhancing its presence in profitable markets is expected to drive profitability [7] - A reinsurance program aimed at prudent exposure management is likely to help manage catastrophe losses [9] - An increase in policy acquisition costs and general administrative expenses is anticipated to affect the net expense ratio, estimated at 35.1 [9] - The combined ratio is expected to improve, driven by a lower loss ratio and expense ratio, with a consensus estimate of 84 [9]

Core Viewpoint - Heritage Insurance Holdings, Inc. will announce its second quarter 2025 financial results on August 5, 2025, with a subsequent conference call on August 6, 2025 [1]. Group 1: Financial Results Announcement - The second quarter 2025 financial results will be released after market close on August 5, 2025 [1]. - A conference call and webcast will take place at 9:00 am ET on August 6, 2025 [1]. Group 2: Conference Call Details - Participants can join the call by dialing 1-888-346-3095 for domestic calls or 1-412-902-4258 for international calls [2]. - Participants should request to join the Heritage Insurance Holdings Second Quarter 2025 Earnings Call [2]. Group 3: Webcast Information - A live audio webcast of the earnings call will be available on the company's investor section of the website [3]. - The call will be archived for replay, and financial information will be routinely posted on the company's investor website [3]. Group 4: Company Overview - Heritage Insurance Holdings, Inc. is a super-regional property and casualty insurance holding company [4]. - The company writes approximately $1.4 billion of gross personal and commercial residential premium across multiple states, including the northeast, southeast, Hawaii, and California [4]. - As a catastrophe-focused property insurer, the company addresses the needs of policyholders affected by wildfires, hurricanes, winter storms, and severe convective storms [4].

Company Overview - Unbiased Alpha is a Swiss Fintech startup that provides consulting services to institutional investors globally, focusing on Quantitative Trading and Systematic Strategies [2] - The company develops software solutions, cloud services, and API-based data science algorithms, emphasizing investing and trading [2] - Unbiased Alpha has experience managing over $1 billion in assets under management (AuM) in small teams, specializing in statistical arbitrage and innovative machine learning algorithms [2] Research Focus - The research conducted by Unbiased Alpha spans various asset classes and instruments, with a primary focus on stocks, ETFs, foreign exchange (FX), commodities, and cryptocurrencies [2] - The company also monitors hedge funds and utilizes machine learning, artificial intelligence (AI), and quantitative research in its strategies [2]

Group 1 - Heritage Insurance Holdings, Inc. (NYSE: HRTG) is identified as the top quant-rated small-cap financial stock with strong near-term prospects [1] - The company has received Buy ratings from both Seeking Alpha and Wall Street analysts [1]

Market Overview - The U.S. stock market has rebounded from April lows, ending the first half of the year positively, aided by a strong June jobs report and easing tariff concerns [1] - Despite the recovery, caution persists due to unresolved trade tensions and uncertainty regarding the Federal Reserve's interest rate decisions [1] Investment Strategy - In an unpredictable market, value investing is recommended, focusing on undervalued stocks with strong fundamentals for stability and long-term gains [2] - Investing in solid businesses trading at fair or discounted prices is suggested over chasing volatile, hype-driven stocks [2] Value Stocks - Notable value stocks with high earnings yield include Fresenius Medical Care AG & Co (FMS), Eldorado Gold (EGO), Hope Bancorp Inc. (HOPE), and Heritage Insurance Holdings, Inc. (HRTG) [3][9] - These stocks have earnings yields above 10% and strong growth forecasts, making them attractive for value-focused investors [9] Earnings Yield Metric - Earnings yield is calculated as (Annual Earnings per Share/Market Price) x 100, indicating the anticipated return from earnings for each dollar invested [4] - A higher earnings yield suggests a stock is underpriced compared to its peers, while a lower yield indicates it may be overpriced [4] Comparison with Treasury Yield - Earnings yield can be compared with the 10-year Treasury yield to assess the relative attractiveness of stocks versus bonds [5] - When the market index yield exceeds the 10-year Treasury yield, stocks may be considered undervalued, making them a better option for value investors [5] Stock Screening Criteria - A primary screening criterion is an earnings yield greater than 10%, supplemented by estimated EPS growth and average daily trading volume [6][7] - Stocks should also have a current price of at least $5 to ensure adequate liquidity [8] Stock Performance and Growth Estimates - Fresenius Medical Care is projected to have year-over-year earnings growth of 33% and 12% for 2025 and 2026, respectively, with upward revisions in EPS estimates [10] - Eldorado Gold anticipates earnings growth of 10% and 55% for the same years, also showing upward revisions in EPS estimates [11] - Hope Bancorp expects year-over-year growth of 12% and 40%, with recent upward revisions in EPS estimates [12] - Heritage Insurance forecasts significant growth of 62% and 13% for 2025 and 2026, respectively, with substantial upward revisions in EPS estimates [13]

Industry Overview - The Zacks Property and Casualty Insurance industry has shown strong performance in 2025, driven by better pricing, prudent underwriting, increased exposure, streamlined operations, a wider global presence, and a solid capital position [1] - The insurance industry has outperformed the Zacks S&P 500 composite, with a year-to-date increase of 7.1% compared to the S&P 500's growth of 4.4% [3] Market Dynamics - Global commercial insurance rates decreased by 3% in Q1 2025, marking the third consecutive quarterly decline after seven years of increases [4][9] - Despite the decline in rates, higher catastrophe losses are driving policy renewal rates, with a reported 3% rise in commercial insurance rates and a 4.9% increase in personal lines in Q1 2025 [6] Growth Projections - Deloitte Insights projects that gross premiums in the insurance market will exceed $722 billion by 2030, indicating significant growth potential [4][6] - The insurance industry is expected to generate around $4.7 billion in annual global premiums from AI-related insurance by 2032, with a CAGR of nearly 80% [12] Company Highlights Heritage Insurance Holdings, Inc. (HRTG) - HRTG has seen a year-to-date share price increase of 93.6% and is projected to have revenue growth of 4.6% and 7.3% for 2025 and 2026, respectively [16][17] - The company has delivered an average earnings surprise of 363.17% over the last four quarters [16] Palomar Holdings, Inc. (PLMR) - PLMR's shares have rallied 45.3% year to date, with revenue growth estimates of 42.5% and 26.3% for 2025 and 2026, respectively [19] - The company raised its adjusted net income guidance to a range of $186 million to $200 million for 2025 [18] Root, Inc. (ROOT) - ROOT's shares have increased by 76.7% year to date, with revenue growth estimates of 17.3% and 8.6% for 2025 and 2026, respectively [21] - The company has delivered an average earnings surprise of 208.89% over the last four quarters [21] HCI Group, Inc. (HCI) - HCI's shares have risen 29.7% year to date, with revenue growth estimates of 18.3% and 5.9% for 2025 and 2026, respectively [23][24] - The company has delivered an average earnings surprise of 42.13% over the last four quarters [23]