In this article, we will take a look at some of the best debt-free stocks to invest in.Debt was once avoided by most S&P 500 technology companies. That mindset is changing. The push into artificial intelligence is forcing companies to spend heavily on data centers, and many are borrowing to keep up. That shift has started to make some investors uneasy.According to CNBC, US equities have been unsteady lately as investors pull back from AI-related stocks, especially those tied to infrastructure. The concern i ...

Core Insights - SoFi and Affirm are both high-growth fintech companies aiming to disrupt traditional financial institutions, with SoFi offering a wide range of financial services and Affirm focusing on "buy now, pay later" solutions [1][2] SoFi Overview - SoFi has expanded its services from student loans to include mortgages, auto loans, personal loans, credit cards, insurance, estate planning, stock trading, and banking, positioning itself as a comprehensive digital financial platform [1][4] - The company targets younger, digitally native users and has grown significantly, quadrupling its member base from 2.5 million in 2021 to 10.1 million in 2024, with projections to reach 12.6 million by Q3 2025 [7][8] - SoFi's revenue and adjusted EBITDA are expected to grow at a CAGR of 27% and 44% respectively from 2024 to 2027, driven by its loan platform business, increased deposits, and new features [9] Affirm Overview - Affirm's BNPL platform caters to younger and lower-income consumers, offering microloans without compound interest or hidden fees, and has seen significant growth, with active consumers increasing from 7.1 million in fiscal 2021 to 23 million in fiscal 2025 [10][11] - The company has secured partnerships with major merchants like Amazon and Walmart, contributing to its gross merchandise volume (GMV) growth from $8.3 billion to $36.7 billion during the same period [11] - Analysts expect Affirm's revenue to grow at a CAGR of 25% from fiscal 2025 to 2028, with adjusted EBITDA projected to increase at a CAGR of 131% through 2028, supported by the growing usage of its Affirm Card and international expansion [14] Valuation Comparison - SoFi has an enterprise value of $32.5 billion, trading at 31 times this year's adjusted EBITDA, while Affirm has an enterprise value of $27.2 billion, trading at 24 times this year's adjusted EBITDA [15] - Despite both companies being strong growth stocks, Affirm is considered more attractive due to its narrower focus, superior growth rates, and lower valuations [15]

Market Overview - U.S. stock markets have continued to rise in 2025, with the Dow and S&P 500 gaining 0.3% and 0.1% in November, while the Nasdaq Composite fell by 1.5% [1][2] - Year-to-date performance shows the Dow, S&P 500, and Nasdaq Composite up by 12.6%, 16.7%, and 21.2%, respectively, with expectations of continued growth in December due to a potential interest rate cut by the Fed [3] Investment Opportunities - Recommended stocks for December include Expedia Group Inc. (EXPE), The Allstate Corp. (ALL), Dillard's Inc. (DDS), Kinross Gold Corp. (KGC), and Globus Medical Inc. (GMED), all carrying a Zacks Rank 1 (Strong Buy) and a Zacks Momentum Score of A [4][9] Company Highlights Expedia Group Inc. (EXPE) - Benefits from a strong platform model that enhances customer insights and revenue growth, with an expected revenue growth rate of 6.3% and earnings growth rate of 20.8% for next year [7][8] - Strong liquidity, share buybacks, and dividends highlight financial resilience [8] The Allstate Corp. (ALL) - Consistent growth in premiums with a 7.6% year-over-year increase in net premiums earned in the first nine months of 2025 [10][11] - Expected revenue growth rate of 5.7% and a decline in earnings by 14.5% for next year, with share repurchases totaling $805 million in the first nine months of 2025 [12][11] Dillard's Inc. (DDS) - Capturing growth in both brick-and-mortar and e-commerce, with a 1% year-over-year increase in retail sales [13][14] - Expected revenue growth rate of 0.8% and a decline in earnings by 8.2% for next year [16] Kinross Gold Corp. (KGC) - Strong production profile with a focus on organic growth through projects like the Tasiast mine, which has boosted production capacity [17][18] - Expected revenue growth rate of 6.3% and earnings growth rate of 32% for next year [19] Globus Medical Inc. (GMED) - Strengthened position in the musculoskeletal space through acquisitions, with a focus on expanding product offerings [20][21] - Expected revenue growth rate of 7.2% and earnings growth rate of 11.3% for next year [22]

Core Insights - The profitability of Progressive Corporation (PGR) is significantly influenced by its management of underwriting expenses, which include policy acquisition costs and other underwriting-related expenses [1][5]. Underwriting Expenses - Policy acquisition costs account for over 50% of underwriting expenses, directly contributing to top-line growth by increasing the number of active insurance policies [2]. - Underwriting expenses have represented one-fifth of total expenses over the past three years, fluctuating between 17-20% of total revenues during the same period [3]. - Effective management of underwriting expenses leads to an improved combined ratio, which is a key measure of underwriting profitability [3]. Cost Management Strategies - Progressive employs data-driven underwriting and automation to manage underwriting expenses, enhancing cost control and competitive positioning in the market [4][9]. - Although underwriting expenses have increased in the last two years due to higher business volumes, they remain a crucial driver of profitability and long-term intrinsic value growth for PGR [5][9]. Peer Comparison - Similar to Progressive, Berkshire Hathaway (BRK.B) and Allstate Corporation (ALL) also rely on effective management of underwriting expenses to sustain profitability and long-term value creation [6][7]. Stock Performance - PGR shares have declined by 6% year-to-date, underperforming the industry average [8]. Valuation Metrics - PGR has a price-to-book value ratio of 3.73, which is above the industry average of 1.5, but it holds a Value Score of B [10]. Earnings Estimates - The Zacks Consensus Estimate for PGR's fourth-quarter 2025 EPS has increased by 4.5%, while estimates for the first-quarter 2026 have decreased by 0.9% over the past 30 days [11]. - The consensus estimates indicate year-over-year revenue increases for 2025 and 2026, but a decline in EPS for 2026 [12]. Current Ranking - PGR currently holds a Zacks Rank 3 (Hold) [13].

Market Overview - The current bull market is characterized by strong growth, with the S&P 500 up 13% year to date, indicating a favorable environment for growth investors [1] Company Summaries SoFi Technologies - SoFi positions itself as a comprehensive digital bank, appealing to younger consumers seeking financial management through mobile platforms [3] - The company reported a 44% year-over-year increase in adjusted net revenue in the second quarter, driven by an easy-to-use platform and a wide range of services [4] - SoFi's business model is low-cost, fostering customer loyalty, with a significant increase in stock value of over 225% in the past year [6] Lemonade - Lemonade is an insurance technology company utilizing AI to disrupt the insurance industry, experiencing rapid growth and a stock increase of over 200% in the past year [7] - The company aims to maintain a loss ratio under 75%, achieving a 70% loss ratio in the trailing 12 months, which is a nine percentage point improvement from the previous year [8] - Management anticipates positive adjusted EBITDA next year and positive net income by 2027, with steady operating expenditures contributing to increasing cash flow [9] Nu Holdings - Nu is revolutionizing banking in Brazil, Mexico, and Colombia with an all-digital platform that provides access to financial services for a wide range of customers [11] - The company reported a 40% year-over-year revenue increase in the second quarter and added 4.1 million customers in the quarter, totaling 18 million over the trailing 12 months [13] - Nu's growth strategy includes customer acquisition, monetization of existing users, and expansion into new markets, indicating a strong future outlook [15]

Core Insights - Lemonade Inc. is reducing its reinsurance cession from 55% to 20% for new and renewing policies, allowing the company to retain a larger share of premiums while reinsurers take on a smaller portion of risk [1] Company Summary - The structural change in reinsurance cession indicates a strategic shift for Lemonade Inc. to enhance its financial position by keeping more premiums [1] - This adjustment reflects the company's confidence in its underwriting capabilities and risk management [1] Industry Implications - The reduction in reinsurance cession may signal a trend among insurtech companies to retain more risk, potentially leading to increased competition in the insurance market [1] - This move could influence how traditional insurers approach their reinsurance strategies in response to changing market dynamics [1]

Core Insights - Heritage Insurance Holdings (HRTG) is leveraging technology to enhance profitability, efficiency, and customer experience, making advanced data analytics and digital platforms integral to its operations [1][2][4] Group 1: Technology Integration - Technology is central to Heritage's operating model, driving efficiency, cost savings, and customer focus [2] - The use of artificial intelligence, machine learning, and analytics allows Heritage to improve underwriting precision, particularly in catastrophe-prone areas like Florida [2][8] - Automation and digital tools streamline claims processing, reduce administrative costs, and enhance customer satisfaction, leading to improved retention [3][4] Group 2: Financial Performance - HRTG shares have increased by 88.6% year-to-date, outperforming the industry [7][8] - The Zacks Consensus Estimate for HRTG's EPS for the third and fourth quarters of 2025 has seen significant upward revisions of 103.8% and 6.1%, respectively [11] - Revenue and EPS estimates for 2025 and 2026 indicate year-over-year growth, with a Zacks Rank of 1 (Strong Buy) for HRTG [14] Group 3: Valuation Metrics - HRTG trades at a price-to-book value ratio of 1.78, which is above the industry average of 1.54, indicating a relatively expensive valuation [9]

Financial Data and Key Metrics Changes - Revenue for Q2 reached $250 million, representing a 19% year-over-year growth [7] - Adjusted EBITDA increased to $31.8 million, up 35% from the previous year [7] - Profitability has improved for the fifth consecutive period, indicating strong operational performance [6] Business Segment Data and Key Metrics Changes - Consumer segment revenue grew by 12%, with segment profit increasing by 19% [8] - Small business loan revenue surged by 61%, while personal loan revenue rose by 14% [8] - Home segment revenue climbed 25%, driven by a 38% increase in home equity revenue [9] - Insurance segment revenue increased by 21% year-over-year, reflecting improved quality and conversion rates [10] Market Data and Key Metrics Changes - The company is focusing on adding more small lenders to enhance consumer coverage, which is starting to yield positive results [9] - The insurance industry is experiencing a favorable environment, with carriers eager to drive more traffic [18] Company Strategy and Development Direction - The company is committed to being an AI-first organization, with all employees utilizing AI tools to enhance productivity [10][11] - Strategic investments in data and technology are expected to improve operational efficiency and customer guidance [11][12] - The company aims to leverage AI to democratize financial products, making consumers more active shoppers [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the opportunities presented by AI, viewing it as a significant growth driver rather than a risk [22] - The company anticipates continued strong performance in the second half of the year, supported by strategic investments and operational excellence [58] Other Important Information - The company has resolved previous technical issues that affected traffic and monetization, leading to high revenue levels exiting Q2 [17] - The company does not rely on long-term contracts, allowing for flexibility in customer acquisition [43] Q&A Session Summary Question: Update on friction with carrier partners - Management clarified that there was a period of adjustment but no significant friction, and revenue levels are high with carriers eager to drive more traffic [15][18] Question: Impact of generative AI on customer acquisition - Management views generative AI as a major opportunity, with increased traffic from AI platforms and a focus on optimizing content for AI searches [19][22] Question: Strength in personal loans and potential interest rate cuts - The strength in personal loans is attributed to improved execution and lender optimism, with potential interest rate cuts expected to further accelerate growth [30][34] Question: Ability to reduce expenses with AI - Management is excited about AI's potential to enhance productivity and reduce expenses, aiming to automate lower-skill tasks and focus on higher-value work [35][40] Question: Impact of competitor losing a contract - Management confirmed that the situation does not affect them, as their business model does not rely on long-term contracts [42][43] Question: Guidance and macro assumptions - Management is not assuming any changes in interest rates in their guidance, expecting continued strength in home equity and a seasonal decline in Q4 [48][50]

Market Overview - U.S. stock markets are experiencing extreme volatility in April due to the "Liberation Day" tariffs imposed by the Trump administration, with a baseline tariff of 10% on all imports and rates as high as 145% for certain countries like China [1][2] - The S&P 500 index is currently in correction territory, trading almost in bear market zone, with a year-to-date decline of 8.6% [3] Investment Opportunities - Despite the overall market downturn, a handful of S&P 500 stocks have provided double-digit returns year to date, with five recommended stocks carrying a favorable Zacks Rank of 2 (Buy): American Water Works Co. Inc. (AWK), Exelon Corp. (EXC), CenterPoint Energy Inc. (CNP), The Progressive Corp. (PGR), and Brown & Brown Inc. (BRO) [4] American Water Works Co. Inc. (AWK) - AWK is benefiting from contributions from acquired assets and military contracts, with new water and wastewater rates boosting performance [8] - The company is expanding operations through organic and inorganic initiatives, with 17 pending acquisitions expected to add 24,200 customers [10] - AWK has expected revenue and earnings growth rates of 1.6% and 6.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] Exelon Corp. (EXC) - Exelon's investments are aimed at strengthening its transmission and distribution infrastructure, with initiatives in grid modernization improving operational resilience [12] - The company has expected revenue and earnings growth rates of 4.2% and 6.4%, respectively, for the current year, with a 0.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [13] CenterPoint Energy Inc. (CNP) - CNP is positioned to benefit from increasing electricity demand due to the electrification of transportation and investments in renewable energy [14] - The company has expected revenue and earnings growth rates of 3.2% and 8%, respectively, for the current year, with a 0.6% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [17] The Progressive Corp. (PGR) - PGR is gaining from higher premiums and a strong product portfolio, focusing on becoming a one-stop insurance destination [18] - The company has expected revenue and earnings growth rates of 16.1% and 10.9%, respectively, for the current year, with a 1% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [19] Brown & Brown Inc. (BRO) - BRO's growth trajectory is driven by organic and inorganic initiatives, enhancing its capabilities and geographic reach [20] - The company has expected revenue and earnings growth rates of 8.4% and 9.1%, respectively, for the current year, with a 0.2% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [22]

Core Investment Insights - American Express, SoFi Technologies, and Berkshire Hathaway are identified as promising long-term investments for retail investors starting with a modest amount of cash [1][2] American Express - American Express operates a different business model compared to Visa and Mastercard, as it issues its own cards and operates its own bank [4][5] - The company targets lower-risk, higher-income customers, which allows it to maintain a smaller market share intentionally [5] - American Express's business model is insulated from interest rate fluctuations, benefiting from higher interest rates through its banking segment [6] - Analysts project a compound annual growth rate (CAGR) of 8% for revenue and 13% for earnings per share (EPS) from 2024 to 2027 [7] - The stock is currently valued at 18 times this year's earnings and offers a forward yield of 1.2% [8] SoFi Technologies - SoFi aims to disrupt traditional banks by providing a comprehensive range of digital financial services, including personal loans, credit cards, and stock trading [9] - The company has experienced rapid growth, with its member base increasing from 2.52 million in 2020 to 10.13 million in 2024 [10] - SoFi became profitable on a GAAP basis in 2024, despite facing challenges from a federal student loan freeze and rising interest rates [11] - Analysts expect SoFi's revenue and EPS to grow at a CAGR of 19% and 24%, respectively, from 2024 to 2027 [11] - The stock is valued at 49 times this year's earnings but appears cheaper at 14 times its forward adjusted EBITDA [12] Berkshire Hathaway - Berkshire Hathaway provides a diversified investment opportunity, owning various insurance companies and holding significant stakes in major financial institutions [13] - The company has consistently outperformed the S&P 500 since Warren Buffett acquired it in 1965, thanks to its scale and diversification [14] - Berkshire Hathaway's operating earnings, which exclude capital gains or losses, grew at a CAGR of 16% from 1994 to 2024, with expectations for continued growth [15]