Hagerty, Inc. (HGTY): what the price assumes

The priced-in model claim for Hagerty, Inc. (HGTY) is temporarily suppressed because its solve record is unavailable. The separately dated narrative remains a snapshot, not a current quote.

Generated: 2026-07-25 · Source: https://boothcheck.com/report/HGTY

Headline

FieldValue
TickerHGTY
CompanyHagerty, Inc.
Current price$11.64/sh
CompositionInsurance 92% / Marketplace 8%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Price-to-book18.42x

The implied return on book is non-physical at this price-to-book and is suppressed as misleading. The rarity read below is the honest signal.

How unusual the bet is: extreme

ReferenceValue
vs own history+4.44σ
cohort percentile (of 91 peers)98
sustained it ~10 years at this level24%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset3.41x3expensive
Earnings2.28x2expensive
Relative1.05x3expensive
Growth1.09x1expensive

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.8%); the inversion above states its own rate.

Per-Model Detail (n=9)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$0.4724.77xyesTBVPS $0.04 × 10.57x (ROE (TTM) 49.9% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption)) (excluded from median)
Relative ValuationRelative$6.231.87xyesP/E 18.77x (blended: static sector reference 11x + trailing (TTM) 37x), scenarios: 15.6x / 18.8x / 22.0x (bear / base = reference held flat / bull), EV/EBITDA 17.13x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$3.413.41xyesBV/sh $0.63, ROE (TTM) 49.9%, ke 9.3%
Two-Stage Excess ReturnAsset$9.661.20xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$10.661.09xyesRev $1.4B, growth 12% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.8x / 3.3x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$11.041.05xyesEPS $0.32, growth 35% (input: historical EPS growth), PEG=1.05 (Fair)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$2.125.49xyes√(22.5 × EPS $0.32 × BVPS $0.63) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$10.181.14xyesEPS $0.32 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative$11.830.98xyesEPS $0.32 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$3.413.41xyesEPS $0.32 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Bull Case

Look at where the price sits against the methods and the bet declares itself. Of the valuation lenses, only the forward-growth method reaches today's price; the asset-value and peer-multiple lenses land well below it, and there is no clean earnings-power read because the company is currently reporting a transition-driven loss. That spread is not noise. It is what the market looks like when it is pricing a durable compounding story the static frames structurally cannot capture, because those frames value this year's book and this year's earnings, and Hagerty's value is in the book of policies it keeps renewing. The premium is the market saying the growth is the asset.

What a standard insurance model misses is that Hagerty is not really priced as an insurer; it is priced as a membership and brand franchise that happens to sell insurance. The company has spent four decades building a community of collector-car enthusiasts, and its filing frames the moat directly: the "Hagerty brand has been carefully curated over the last four decades by providing Members with excellent customer service." That brand produces something a commodity auto insurer never gets, an 89% retention rate, meaning roughly nine in ten policyholders renew every year. A business that keeps nine of ten customers compounds its book rather than churning it, which is exactly why the growth method is the only lens that reaches the price and the static ones cannot.

The growth itself is fast and broadening, and the underlying profitability is improving even through the noise. Written premium rose 18% to $289 million in the first quarter of 2026, ahead of the company's own 15% to 16% full-year target, on a record 112,000 new members and policies in force up 15% to 1.8 million. Earned premium grew 42% to $240 million and adjusted EBITDA grew 77% to $85 million in the quarter, so beneath the headline net loss the operating engine is accelerating, not stalling. State Farm conversions and omnichannel distribution are widening the funnel that feeds the renewal flywheel. The bull case is that a brand-driven, high-retention compounder grows into a price the conventional insurance math will never validate on a single year's numbers.

Bear Case

The uncomfortable truth a holder would rather not face is that the price has run far ahead of anything the company has yet proven it can durably earn. Hagerty is a fine business with a real moat, but the stock is priced for an outcome at the most extreme end of the scale, and only one valuation lens, the growth method, reaches it at all. Every other frame, the asset-value lenses and the peer-multiple lens, lands well below the price, and there is no profitable earnings read to anchor on because the company is reporting a loss through its current transition. When a single growth method is the only thing standing between today's price and the conservative methods, the conservative methods are usually the more honest read. The qualitative version is simpler: the market is paying today for a decade of flawless compounding, and it has left no room for the compounding to be merely good.

The structure underneath inflates the apparent return and the risk together. Hagerty came public through a SPAC with an Up-C structure, so the publicly traded book value per share is a thin slice and much of the economic equity sits with the founding interests. That is why the multiple of book looks astronomical, more than seventeen times: it is measured against a small public sliver. The practical effect is that public holders own a leveraged claim on the franchise rather than a clean one, and the governance that comes with a founder-concentrated Up-C means the public float is a passenger on decisions it does not control. A premium this size assumes not just that the business compounds but that the structure treats public holders well as it does.

The near-term complication is the Markel fronting transition, which is reshaping the reported financials in ways that obscure exactly the profitability the growth bet depends on. The first quarter carried a net loss of $13 million driven by roughly $89 million of pre-tax transitional costs, and full-year guidance shows total revenue down 11% to 12% and a net loss of $41 million to $51 million, including about $190 million of transitional costs, even as adjusted EBITDA is guided to $236 million to $247 million. Management calls the costs transitional and expects normalization by year-end, and the $50 million cash Hagerty received from Markel for assumed prior-period liabilities supports that framing. But a price at the extreme end of the scale is precisely the wrong place to be carrying a year of muddied reporting, because if the normalization disappoints or the retention rate slips even slightly, the only method holding up the price gives way and there is nothing beneath it.

Valuation

Hagerty is read like an insurer, on price against book value, and the result is unusual: the stock trades at more than seventeen times book, a multiple so far above what any sustainable return record supports that a single return figure cannot honestly express the bet. The price pays a multiple of book that no insurer has durably earned its way into, which is why the embedded assumption sits at the most demanding end of the scale. The honest read is that this is not a static-value stock at all; it is a long-duration growth bet wearing an insurer's accounting.

That extremity is part structure and part growth expectation. The publicly traded book value per share is small because of Hagerty's Up-C SPAC structure, which concentrates much of the economic equity outside the public float, so the multiple of book is mechanically inflated and should not be read at face value. Set the structure aside and the methods still split sharply: only the forward-growth approach reaches the price, while the asset-value and peer-multiple lenses land well below it and there is no profitable earnings read to lean on. That pattern, one growth lens reaching the price and everything else below it, is the signature of a moat-and-durability premium the static frames cannot price, not a value supported by current returns or book.

Solvency for an insurer is read on capital adequacy and the quality of the float, not on corporate leverage, and on that frame the operating picture is improving: adjusted EBITDA grew 77% to $85 million in the quarter and the company took in $50 million of cash from Markel against assumed prior-period liabilities. The complication is that the Markel fronting transition is muddying the reported results through year-end, with roughly $190 million of full-year transitional costs flowing through a guided net loss. A buyer at this price is underwriting two things at once: that the underlying compounding is as durable as the 89% retention rate suggests, and that the reported numbers normalize to reveal it. The price has priced the first and is waiting on the second.

Catalysts

Hagerty's first quarter of 2026 paired strong operating growth with a transition-driven loss. Written premium rose 18% to $289 million, ahead of the 15% to 16% full-year guidance, fueled by a record 112,000 new members and policies in force up 15% to 1.8 million, supported by an 89% retention rate and State Farm conversions. Earned premium grew 42% to $240 million and adjusted EBITDA grew 77% to $85 million, so the operating engine accelerated even as the company reported a net loss of $13 million, driven primarily by $89 million of pre-tax transitional costs tied to its new Markel fronting arrangement.

That Markel transition is the dominant near-term storyline. It reshapes how Hagerty recognizes revenue and is the reason full-year guidance shows total revenue down 11% to 12% and a net loss of $41 million to $51 million, including roughly $190 million of transitional costs, even as adjusted EBITDA is guided to $236 million to $247 million. The company received $50 million in cash from Markel for prior-period liabilities assumed by Hagerty Re, and it reaffirmed its outlook, signaling that the financial complexity should normalize by year-end. The gap between a guided GAAP loss and a sharply higher adjusted EBITDA is precisely the thing the next several prints have to resolve.

The forward catalysts are the completion of the Markel transition and the normalization of reported results, the durability of the 89% retention rate, and the pace of new-member additions through State Farm and omnichannel distribution. Analyst sentiment is mixed rather than uniformly bullish, with a consensus target in the low-to-mid teens and ratings split between buy and hold, which fits a stock whose entire case rests on growth the conventional methods cannot yet validate.

Peer Cohorts (Per Segment, With Filing Citations)

Insurance (reported)

Marketplace (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Hagerty Q1 2026 results, May 2026 · HGTY FY2025 10-K · MarketBeat analyst ratings, May 2026

View the full interactive HGTY report on boothcheck