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Monday, HCI Group’s (NYSE: HCI) price target was raised by Citizens JMP from $210.00 to $225.00, while the firm maintained a Market Outperform rating for the company’s shares. The adjustment comes after analysts spent time with HCI Group’s management on the road, engaging with investors. The company’s strong performance is evident in its impressive 68.7% return over the past year and 43.7% year-to-date gains. According to InvestingPro data, HCI maintains a "GREAT" financial health score of 3.68 out of 5.
The Citizens JMP analyst, Matthew Carletti, expressed renewed confidence in both the legacy operations of HCI Group and the potential of Exzeo, the business segment that is anticipated to be spun off. After recent discussions with the company’s management, the analyst reported a better grasp of the economics driving the Exzeo business. The company’s robust fundamentals are reflected in its 20.9% revenue growth and consistent dividend payments maintained for 16 consecutive years.
Carletti’s updated price target of $225.00 is based on 14 times the estimated earnings per share (EPS) for 2026 and 3.1 times the projected forward book value. The previous target of $210.00 was set at 13 times the 2026 estimated EPS and the same multiple of forward book value. The analyst views these multiples as conservative, especially considering the upcoming spinoff of HCI’s high-growth, fee-generating business and the expected continued strong performance of its legacy underwriting business.
In his commentary, Carletti elaborated on the rationale behind the price target increase, highlighting HCI Group’s undervaluation and providing a sum-of-the-parts scenario analysis in his report. The analysis underscores the strength of HCI’s business model, which is expected to deliver peer group-leading return on equity (ROE) and robust growth.
HCI Group’s stock adjustment reflects the analyst’s positive outlook on the company’s long-term prospects, supported by the anticipated spinoff and the performance of its core business segments. The new price target suggests that there is significant upside potential for investors in HCI Group shares. Trading at a P/E ratio of 13.45x, InvestingPro analysis indicates the stock is currently undervalued. Discover 11 additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription, including detailed insights from the Pro Research Report available for HCI Group and 1,400+ other US stocks.
In other recent news, HCI Group reported a strong first quarter for 2025, with earnings per share (EPS) of $5.35, surpassing forecasts of $4.83. This earnings beat was echoed in another report, which noted an EPS of $5.21 against the consensus estimate of $4.85. Despite the positive earnings results, HCI Group’s stock experienced a decline in aftermarket trading. Gross earned premiums for the company grew by 17% year-over-year, while the net combined ratio improved significantly to 56% from 67%. Analysts from JMP Securities responded positively to these developments by increasing the price target for HCI Group to $210, maintaining a Market Outperform rating. Strategic initiatives are also underway, including the planned spin-off of Exeo, a technology platform aimed at enhancing insurance operations. HCI Group’s shareholder equity saw a boost of nearly $70 million during the quarter, contributing to a stronger financial position. The company anticipates continued growth, with expectations of shareholder equity approaching $750 million by the end of the second quarter.
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