Hagerty (HGTY) Earnings Growth And 2.8% Margin Test Bullish Profit Narratives

Hagerty (HGTY) closed FY 2025 with Q4 revenue of US$357.3 million and basic EPS of US$0.07, alongside Q4 net income of US$6.9 million. On a trailing twelve month basis, revenue was US$1.5 billion, EPS was US$0.44 and net income was US$41.5 million. Over the last few quarters the company has seen revenue move from US$291.7 million and EPS of US$0.01 in Q4 FY 2024 to US$379.9 million and EPS of US$0.18 in Q3 FY 2025, before landing at the latest Q4 figures. This sets up a story where higher trailing net profit margins and strong earnings growth are front and center for investors assessing the earnings release.

See our full analysis for Hagerty.

With the headline numbers on the table, the next step is to line these results up against the most common narratives around Hagerty and see which views the latest margin and earnings trends support, and which might need a rethink.

See what the community is saying about Hagerty

TTM net margin sits at 2.8%

• On a trailing twelve month view, Hagerty earned US$41.5 million of net income on US$1.5b of revenue, which works out to a 2.8% net profit margin versus 0.7% a year earlier.
• Consensus narrative talks about higher margin potential from global expansion, digital programs and ancillary businesses, while the current 2.8% margin and modest Q4 net income of US$6.9 million show that any margin lift is still in early stages rather than already matching those ambitions.
  • Revenue over the last 12 months of US$1.5b compares with US$1.2b a year earlier, which supports the idea of a growing customer base but keeps the focus on whether this growth is coming through at stronger margins over time.
  • Quarterly net income has ranged from US$6.0 million in Q1 FY 2025 to US$17.7 million in Q3 FY 2025, so the margin story is still developing rather than showing a straight line toward the double digit levels referenced in the narrative.

Earnings growth outpaces revenue trends

• Trailing twelve month EPS moved from US$0.10 at FY 2024 Q4 to US$0.44 at FY 2025 Q4, while trailing revenue rose from US$1.2b to US$1.5b, so profit growth has run ahead of top line growth in the recent data.
• Bulls point to very strong trailing earnings growth and forecasts of about 46.2% yearly earnings growth, and the step up in trailing EPS to US$0.44 gives that view some backing, but the more modest revenue move and Q4 EPS of roughly US$0.07 keep the question open about how durable that earnings pace is if revenue grows more slowly.
  • Quarterly revenue has been in a tight band, from US$319.6 million in Q1 FY 2025 to US$380.0 million in Q3 FY 2025, which is a smaller change than the move in quarterly EPS from roughly US$0.01 in Q4 FY 2024 to US$0.18 in Q3 FY 2025.
  • The five year average earnings growth rate of 49.5% per year in the data lines up with the bullish focus on profit expansion, but the 2.5% yearly revenue growth forecast shows that a lot of that thesis depends on margins staying stronger rather than on very fast top line growth.

Investors who want to see how this profit pace ties into the long term story around expansion, partnerships and margins may find it helpful to read through the full bull case narrative on Hagerty, especially with EPS moving much faster than revenue in the recent data. 🐂 Hagerty Bull Case

P/E of 28.5x and DCF fair value of US$6.85

• Hagerty is trading on a trailing P/E of 28.5x against a DCF fair value of US$6.85 per share and a current share price of US$11.74, with the P/E above the broader US insurance industry average of 12x but below the peer group average of 48x in the data.
• Bears highlight that the share price of US$11.74 sits above the DCF fair value of US$6.85 and that the 28.5x P/E is higher than the industry level, and those points are clearly visible in the numbers, yet the presence of a higher peer group P/E and a bullish analyst price target of US$14.00 shows that some investors still see room for the valuation case to differ depending on which comparison set you focus on.
  • The trailing net margin of 2.8% is still relatively low against those valuation metrics, which feeds into the cautious view that a lot of future margin improvement is already being factored into the P/E multiple.
  • At the same time, strong trailing earnings growth and the earnings growth estimates around 46.2% per year help explain why the market valuation in the data sits above the DCF fair value, giving bears concrete numbers to watch if growth or margins come in below those expectations.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Hagerty on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If the mix of strong earnings and valuation debate has you thinking this is a good time to look at the numbers yourself, weigh the risks and rewards, and see what stands out in the optimism the market is pricing in, then check our breakdown of 2 key rewards.

Explore Alternatives

Hagerty's 2.8% trailing net margin, relatively low Q4 EPS of US$0.07 and P/E of 28.5x against a lower DCF fair value leave limited room for error.

If that mix of rich pricing and thin margins makes you want a wider margin of safety, run your eye over our 47 high quality undervalued stocks that could better fit a value conscious approach.

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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