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Investing.com - Citizens has raised its price target on HCI Group (NYSE:HCI) to $255.00 from $225.00 while maintaining a Market Outperform rating following the company’s better-than-expected third-quarter 2025 results. This new target aligns with the highest analyst price target for HCI , according to InvestingPro data, suggesting significant upside potential from the current price of $181.40.
HCI Group reported operating earnings per share of $4.90, significantly exceeding both the Citizens estimate of $2.26 and the consensus forecast of $2.40. The company’s performance was driven by a favorable net loss ratio of 34% (versus 35% estimated) due to favorable weather conditions and ongoing declines in litigation frequency. InvestingPro data shows HCI’s diluted EPS for the last twelve months stands at $15.80, with analysts forecasting $20.70 for fiscal year 2025.
Gross written premium growth was stronger than anticipated at 17% compared to the 13% estimate, with the firm noting that retention on prior takeouts has remained strong. This growth was partially offset by a higher expense ratio of 30% versus the 28% estimate. The company has maintained impressive revenue growth, with InvestingPro showing a 5-year revenue CAGR of 25% and recent revenue growth of 8.75% over the last twelve months.
Citizens’ new $255 price target represents 15 times their 2026 estimated earnings per share and 2.7 times their estimate of one-year-forward book value, up from the previous 13 times 2026 estimated EPS and 2.4 times forward book value estimate. Currently, HCI trades at a P/E ratio of 11.48 and a notably low PEG ratio of 0.37, indicating the stock may be undervalued relative to its growth prospects.
The firm continues to view HCI Group shares as undervalued, citing benefits from the recent IPO and continued majority ownership of high-growth, fee-generating technology business Exzeo, alongside HCI’s core homeowners’ underwriting business that is expected to continue producing peer group-leading returns and solid growth. InvestingPro analysis supports this view with an "EXCELLENT" overall financial health score of 3.77, strong return on equity of 31%, and a 16-year track record of consistent dividend payments. For deeper insights into HCI and 1,400+ other stocks, access the comprehensive Pro Research Reports available exclusively on InvestingPro.
In other recent news, HCI Group announced its financial results for the third quarter of 2025, reporting a notable earnings per share (EPS) of $4.90. This figure significantly surpassed the analysts’ forecast of $1.87, indicating a strong financial performance. Despite this impressive earnings beat, the company’s stock experienced a decline in after-hours trading, a reaction that highlights the complexities of market dynamics. These developments are part of the latest updates concerning HCI Group.
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