{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "HGTY",
  "name": "Hagerty, Inc.",
  "url": "https://frontierpicks.com/dossiers/HGTY/",
  "json_url": "https://frontierpicks.com/dossiers/HGTY.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a7",
    "n": 7
  },
  "current_thesis": "Hagerty's shares are more likely to lag the S&P 500 over three months because its majority holder sold 11.5 million shares in the November 2026 offering, its second sale in two months, after a raised 2026 outlook; the fourth-quarter report, expected in early March 2027, shows whether 2027 profit grows without a $52 million one-time benefit.",
  "invalidation_trigger": "A daily close above $18.71, the 2026-11-04 closing high from just after the third-quarter report, which would show the shares absorbing the November share sale and leading the S&P 500; or 2027 adjusted EBITDA guidance above the top of the 2026 range of $305–315 million.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "banks-insurers-capital-markets"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Hagerty, Inc. - Form 8-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001840776/000119312526458570/d151794d8k.htm",
      "date": "2026-11-12"
    },
    {
      "title": "Hagerty, Inc. - Form 424B7 - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001840776/000119312526455546/d168203d424b7.htm",
      "date": "2026-11-10"
    },
    {
      "title": "Hagerty Announces Secondary Offering of its Class A Common Stock",
      "url": "https://investor.hagerty.com/news-releases/news-release-details/hagerty-announces-secondary-offering-its-class-common-stock-1",
      "date": "2026-11-10"
    },
    {
      "title": "Hagerty stock falls on secondary share offering",
      "url": "https://www.streetinsider.com/Investing/Hagerty+stock+falls+on+secondary+share+offering/27323880.html",
      "date": null
    },
    {
      "title": "Finviz",
      "url": "https://finviz.com/news/414024/hagerty-reports-third-quarter-2026-results-increases-2026-growth-outlook",
      "date": "2026-11-03"
    },
    {
      "title": "MarketBeat",
      "url": "https://www.marketbeat.com/instant-alerts/transcript-hagerty-q3-earnings-call-highlights-2026-11-03/",
      "date": "2026-11-03"
    },
    {
      "title": "Finviz",
      "url": "https://finviz.com/news/414636/hagerty-beats-and-raises-again-but-a-reserve-release-does-the-heavy-lifting-as-premium-growth-cools",
      "date": "2026-11-03"
    }
  ],
  "evidence": [
    {
      "claim": "Hagerty Holding Corp. reported a sale of 11,500,000 Class A shares at $14.33 per share from 2026-11-10 to 2026-11-12, after converting the same number of derivative securities.",
      "source": "SEC Form 4 filed 2026-11-12",
      "as_of": "2026-11-12"
    },
    {
      "claim": "The secondary offering of 10 million Class A shares at $14.85, with a 30-day underwriters' option on 1.5 million more, closed on 2026-11-12; Hagerty receives no proceeds.",
      "source": "Hagerty 8-K filed 2026-11-12",
      "as_of": "2026-11-12"
    },
    {
      "claim": "The November offering carries a 60-day lock-up covering Hagerty, its directors and executive officers, Hagerty Holding Corp., Markel and State Farm, subject to exceptions.",
      "source": "Hagerty 424B7 preliminary prospectus supplement",
      "as_of": "2026-11-10"
    },
    {
      "claim": "Hagerty Holding Corp. reported an open-market sale of 10,637,500 Class A shares at $11.47 from 2026-09-09 to 2026-09-11, tied to the $11.95 September offering.",
      "source": "SEC Form 4 filed 2026-09-11",
      "as_of": "2026-09-11"
    },
    {
      "claim": "Third-quarter revenue was $354.2 million, down 9.5%, while written premium rose 15.5% to $386.0 million and earned premium rose 41.7% to $265.1 million.",
      "source": "Hagerty third-quarter 2026 earnings release",
      "as_of": "2026-11-03"
    },
    {
      "claim": "Policies in force rose 18.1% to 1,909,254 and policy retention was 88.2% against 88.6% a year earlier.",
      "source": "Hagerty third-quarter 2026 earnings release",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Hagerty raised 2026 adjusted EBITDA guidance to $305–315 million from $270–280 million and net income guidance to $48–60 million from $18–30 million.",
      "source": "Hagerty third-quarter 2026 earnings release",
      "as_of": "2026-11-03"
    },
    {
      "claim": "The 2026 adjusted EBITDA guidance includes a $52 million benefit from capitalizing acquisition costs that management said will not recur in 2027.",
      "source": "Hagerty 2026-11-03 earnings call, per MarketBeat",
      "as_of": "2026-11-03"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Financial Services",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-09-30",
      "figures": {
        "revenue": {
          "status": "ok",
          "label": "total revenues, including investment gains and losses",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-03",
              "restated": null,
              "value_musd": 354.2,
              "yoy_pct": -9.5
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-05",
              "restated": null,
              "value_musd": 354.8,
              "yoy_pct": -6.5
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-06",
              "restated": null,
              "value_musd": 311.8,
              "yoy_pct": -5
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-04",
              "restated": "2026-11-03",
              "value_musd": 391.4,
              "yoy_pct": 21
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-04",
              "restated": "2026-08-05",
              "value_musd": 379.3,
              "yoy_pct": 21.1
            }
          ]
        },
        "gross_margin": {
          "status": "not reported"
        },
        "operating_margin": {
          "status": "ok",
          "quarters": [
            {
              "end": "2026-09-30",
              "filed": "2026-11-03",
              "restated": null,
              "pct": 11.7
            },
            {
              "end": "2026-06-30",
              "filed": "2026-08-05",
              "restated": null,
              "pct": 0.6
            },
            {
              "end": "2026-03-31",
              "filed": "2026-05-06",
              "restated": null,
              "pct": -6.7
            },
            {
              "end": "2025-09-30",
              "filed": "2025-11-04",
              "restated": "2026-11-03",
              "pct": 8.8
            },
            {
              "end": "2025-06-30",
              "filed": "2025-08-04",
              "restated": "2026-08-05",
              "pct": 12.6
            }
          ]
        },
        "pretax_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 41.4
        },
        "net_income": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "four_quarters_end": "2026-09-30",
          "value_musd": 36.3,
          "four_quarters_musd": 60.1
        },
        "operating_cash_flow": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "first_end": "2025-12-31",
          "value_musd": 309.2
        },
        "capital_spending": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "first_end": "2025-12-31",
          "value_musd": 29.6
        },
        "free_cash_flow": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners"
        },
        "diluted_share_change": {
          "status": "not reported"
        },
        "cash": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 460.8
        },
        "debt": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 246.4,
          "composition": "long-term debt"
        },
        "net_cash": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's cash and investments back its deposits and policies"
        },
        "deferred_revenue": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 51.6,
          "yoy_pct": 1.7
        },
        "backlog": {
          "status": "not reported"
        },
        "receivables": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 27.5
        },
        "inventory": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 34.8
        },
        "equity": {
          "status": "ok",
          "end": "2026-09-30",
          "filed": "2026-11-03",
          "value_musd": 257.3
        },
        "market_value": {
          "status": "not available"
        },
        "enterprise_value": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's cash and investments back its deposits and policies"
        },
        "ev_sales": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's cash and investments back its deposits and policies"
        },
        "ev_ebit": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's cash and investments back its deposits and policies"
        },
        "pe": {
          "status": "not available"
        },
        "pb": {
          "status": "not available"
        },
        "fcf_yield": {
          "status": "not meaningful",
          "reason": "a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners"
        }
      },
      "financial_balance_sheet": {
        "kind": "insurer"
      }
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": null,
      "days_to_cover": 3.6,
      "change_pct": -11.5
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 286807125,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 298170,
          "sold_usd": 292785820.72,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nHagerty's shares are more likely to lag the S&P 500 over the next three months. The collector-car insurer is still growing, but its majority holder has now sold stock twice in two months, and the raised 2026 outlook is already in the price. The 2027 guidance in the fourth-quarter report decides whether profit keeps growing without a $52 million benefit that management says will not recur.\n\nThe newest fact is the final size of the November sale. Hagerty Holding Corp. (HHC), the majority holder, filed a Form 4 on 2026-11-12 reporting an open-market sale of 11,500,000 Class A shares at $14.33 per share from 2026-11-10 to 2026-11-12. That total matches the 10 million base shares priced at $14.85 plus the full 1.5 million-share underwriters' option described in Hagerty's 8-K, which says the offering closed on 2026-11-12. Hagerty receives no proceeds. HHC said the money funds a redemption for the Kim Hagerty Revocable Trust, the same use as the September 2026 sale.\n\nThe business results are still strong. In the third-quarter report on 2026-11-03, policies in force rose 18.1% to 1,909,254 and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 63.5% to $97.1 million. Hagerty raised 2026 adjusted EBITDA guidance to $305–315 million from $270–280 million.\n\nThe raise is of mixed quality. Earnings Whispers attributes about $26 million of the $35 million increase to a reserve reduction, and written premium growth slowed to 16% in the third quarter from 19% in the second. The shares closed at $15.80 on 2026-11-12, just under Truist's $16 target and Wells Fargo's $17 target, both raised on 2026-11-04, so the market already prices the higher outlook.\n\n## Bull Case\n\n- **Policy growth remains in double digits.** Policies in force rose 18.1% and vehicles in force rose 13.4% to 3,105,819 at 2026-09-30, per the third-quarter release. Management repeated its goal of 3 million policies by 2030 on the 2026-11-03 call.\n- **State Farm distribution is still widening.** State Farm's captive agents sold Classic Plus policies in 41 states at the third-quarter report, up from 37, according to Earnings Whispers. Conversion of State Farm's existing 525,000-policy Classic book was underway in 26 states at quarter-end, per MarketBeat's coverage of the 2026-11-03 call.\n- **Underwriting margins improved sharply.** Hagerty Re, the company's reinsurer, posted a third-quarter combined ratio of 79.7% against 89.6% a year earlier, per the 2026-11-03 release. The combined ratio measures claims and expenses per premium dollar; under 100% is an underwriting profit.\n- **Markel transition costs are nearly finished.** Pre-tax costs fell from $89 million in the first quarter to $64 million in the second and $36 million in the third, with about $10 million expected in the fourth. Hagerty raised 2026 net income guidance to $48–60 million from $18–30 million on 2026-11-03.\n- **Cash exceeds debt by a wide margin.** Unrestricted cash was $460.8 million at 2026-09-30 against about $247 million of debt, of which $103 million funds Broad Arrow Capital's collector-car loans. Nine-month operating cash flow rose 48% to $280.1 million.\n- **Large holders are locked up for now.** The preliminary prospectus supplement dated 2026-11-10 sets a 60-day lock-up covering Hagerty, its directors and executive officers, HHC, Markel and State Farm, subject to listed exceptions. With the underwriters' option used in full, no further shares from this offering remain to be sold.\n\n## Bear Case\n\n- **The majority holder keeps selling.** HHC's Form 4 filed 2026-09-11 reports a sale of 10,637,500 Class A shares at $11.47 from 2026-09-09 to 2026-09-11. Its Form 4 filed 2026-11-12 reports another 11,500,000 shares at $14.33, eight trading days after the third-quarter report.\n- **Reserve help drove much of the raise.** Year-to-date favorable loss development totaled $32 million, including $26 million in the third quarter, per the 2026-11-03 release. Hagerty Re has carried 100% of the US quota share, its share of premiums and losses, since 2026-01-01, up from 80%, so claims swings reach results more directly.\n- **A $52 million benefit will not repeat.** Management said on 2026-11-03 that the benefit from capitalizing acquisition costs is in 2026 adjusted EBITDA guidance and \"will not recur in 2027,\" per MarketBeat. That sets a harder comparison for 2027 guidance.\n- **Growth rates are cooling.** Written premium growth slowed to 16% in the third quarter from 18% and 19% in the prior two quarters. Hagerty Drivers Club paid-member growth cooled to 6.2% from 10%, and policy retention slipped to 88.2% from 88.6%, per the 2026-11-03 release.\n- **Partner carriers face a soft market.** Management said on 2026-11-03 that soft personal auto and home markets are slowing new business at partner carriers. New insurance business rose 7.7% in the third quarter, against 56.1% for nine months.\n- **Collector-car prices may be peaking.** Management said on 2026-11-03 it would be prudent not to assume high-end valuations keep rising. Marketplace revenue fell 6.4% to $32.2 million in the third quarter despite a 65.3% rise in auction sales, because inventory sales were lower.\n\n## Setup & Price Structure\n\nThe shares closed at $15.80 on 2026-11-12, down from $17.22 on 2026-11-09, $16.94 on 2026-11-10 and $16.04 on 2026-11-11 as the offering was announced, priced and closed. The last close is 18.6% below the 52-week intraday high of $19.41 set on 2026-11-05, a session that closed at $18.36. StreetInsider reported the shares fell 7.6% in after-hours trading on 2026-11-10 after the offering was announced.\n\nThe $14.85 offering price sits just above the 50-day moving average of $14.82, and the 200-day moving average is $12.24, both as of 2026-11-12 in adjusted daily closes. The shares are up 21.8% over three months from $12.97 on 2026-08-14, and the 52-week closing low was $9.67 on 2026-03-11. The offering price and the 50-day average together mark the zone where the November buyers came in.\n\nAnalysts moved targets up on 2026-11-04, the day after the report. Wells Fargo's target rose to $17 from $14 with an Equal-Weight rating, and Truist's rose to $16 from $13 with a Hold rating. Citizens' target rose to $19 with a Market Outperform rating, the only one of the three well above the last close.\n\n## Catalyst Calendar\n\n- **~2027-01-09 (est.):** Expiry of the 60-day lock-up on Hagerty, its officers and directors, Hagerty Holding Corp., Markel and State Farm. After it lapses, large holders are free to sell again; a third offering would add more supply to the Class A float.\n- **~2027-03-04 (est.):** Fourth-quarter 2026 report and first 2027 guidance; the company has not announced a date. It shows whether 2027 profit can grow without the $52 million benefit and whether written premium growth holds near the 16%–17% guided for 2026.\n\n## What Would Change Our Mind\n\nA daily close above $18.71, the 2026-11-04 closing high from just after the third-quarter report, which would show the shares absorbing the November share sale and leading the S&P 500; or 2027 adjusted EBITDA guidance above the top of the 2026 range of $305–315 million.\n\n## Correlation Notes\n\nThe drivers are mostly specific to the company. High-end collector-car values feed Broad Arrow auction and private-sale activity, and insured values over time; Broad Arrow closed its 2026 auction calendar with a Zürich sale on 2026-11-07. The personal auto and home insurance cycle affects new business at partner carriers, as management said on 2026-11-03.\n\nInterest rates matter at the margin: net investment income rose 25.3% to $12.7 million in the third quarter. Share supply is a separate influence. Both 2026 secondary offerings came from HHC, brought Hagerty no proceeds, and moved shares from Class V into the tradable Class A float, per HHC's Form 4 filings reporting conversions before each sale.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-13T03:55:49+00:00",
  "last_synthesized": "2026-11-13",
  "date_modified": "2026-11-13",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}