HGTY · Hagerty
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $18.71
Note written ·
Price against the kill line
13.6% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $18.71, on record since 11 November 2026. The shares are up 25.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $18.71, the 4 November 2026 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 $305–315 million.
Research onlyNot in the portfolio.
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 3 November 2026
- Net income, latest quarter ($M)
- 36.3
- Net income, four quarters ($M)
- 60.1
- Shareholders' equity ($M)
- 257
- Revenue, latest quarter ($M)total revenues, including investment gains and losses
- 354
- Revenue, change on a year (%)
- −9.5
Hagerty is an insurer: net cash, enterprise value and free cash flow are not shown, because a bank's or insurer's cash and investments back its deposits and policies.
All filed numbers
What Hagerty reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 354 | −9.5 | 11.7 |
| first filed | 355 | −6.5 | 0.6 |
| first filed | 312 | −5.0 | −6.7 |
| first filed restated | 391 | +21.0 | 8.8 |
| first filed restated | 379 | +21.1 | 12.6 |
| Pre-tax income ($M) | 41.4 |
| Net income ($M) four quarters: 60.1 | 36.3 |
| Diluted shares, change on a year (%) | Not reported |
| Operating cash flow ($M) | 309 |
| Capital spending ($M) | 29.6 |
| Free cash flow ($M) | Not meaningful |
Not meaningful: a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners.
| Cash and short-term investments ($M) | 461 |
| Debt ($M) long-term debt | 246 |
| Net cash, cash less debt ($M) | Not meaningful |
| Deferred revenue ($M) +1.7% on a year | 51.6 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 27.5 |
| Inventory ($M) | 34.8 |
| Shareholders' equity ($M) | 257 |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
| Market value ($M) | Not available |
| Enterprise value, market value plus net debt ($M) | Not meaningful |
| Enterprise value to sales (×) | Not meaningful |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not available |
| Price to book value (×) | Not available |
| Free-cash-flow yield (%) | Not meaningful |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
Not meaningful: 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.
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): the share of shares outstanding is not available, 3.6 days of average trading to cover, −11.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $286.8M |
| 12 monthsfrom | $298K | $292.8M |
The thesis
Hagerty'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.
The newest fact is the final size of the November sale. Hagerty Holding Corp. (HHC), the majority holder, filed a Form 4 on 12 November 2026 reporting an open-market sale of 11,500,000 Class A shares at $14.33 per share from 10 November to 12 November 2026. 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 12 November 2026. 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.
The business results are still strong. In the third-quarter report on 3 November 2026, 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.
The 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 12 November 2026, just under Truist's $16 target and Wells Fargo's $17 target, both raised on 4 November 2026, so the market already prices the higher outlook.
Bullish and bearish views on Hagerty, Inc.
The bull case on Hagerty, Inc. (HGTY), in brief: policy growth remains in double digits. The bear case: the majority holder keeps selling.
Bull case
- Policy growth remains in double digits. Policies in force rose 18.1% and vehicles in force rose 13.4% to 3,105,819 at 30 September 2026, per the third-quarter release. Management repeated its goal of 3 million policies by 2030 on the 3 November 2026 call.
- 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 3 November 2026 call.
- 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 3 November 2026 release. The combined ratio measures claims and expenses per premium dollar; under 100% is an underwriting profit.
- 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 3 November 2026.
- Cash exceeds debt by a wide margin. Unrestricted cash was $460.8 million at 30 September 2026 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.
- Large holders are locked up for now. The preliminary prospectus supplement dated 10 November 2026 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.
Bear case
- The majority holder keeps selling. HHC's Form 4 filed 11 September 2026 reports a sale of 10,637,500 Class A shares at $11.47 from 9 September to 11 September 2026. Its Form 4 filed 12 November 2026 reports another 11,500,000 shares at $14.33, eight trading days after the third-quarter report.
- 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 3 November 2026 release. Hagerty Re has carried 100% of the US quota share, its share of premiums and losses, since 1 January 2026, up from 80%, so claims swings reach results more directly.
- A $52 million benefit will not repeat. Management said on 3 November 2026 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.
- 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 3 November 2026 release.
- Partner carriers face a soft market. Management said on 3 November 2026 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.
- Collector-car prices may be peaking. Management said on 3 November 2026 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.
Price setup
The shares closed at $15.80 on 12 November 2026, down from $17.22 on 9 November 2026, $16.94 on 10 November 2026 and $16.04 on 11 November 2026 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 5 November 2026, a session that closed at $18.36. StreetInsider reported the shares fell 7.6% in after-hours trading on 10 November 2026 after the offering was announced.
The $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 12 November 2026 in adjusted daily closes. The shares are up 21.8% over three months from $12.97 on 14 August 2026, and the 52-week closing low was $9.67 on 11 March 2026. The offering price and the 50-day average together mark the zone where the November buyers came in.
Analysts moved targets up on 4 November 2026, 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.
Catalysts ahead
- ~9 January 2027 (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.
- ~4 March 2027 (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.
What would change the view
A daily close above $18.71, the 4 November 2026 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.
What it trades with
The 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 7 November 2026. The personal auto and home insurance cycle affects new business at partner carriers, as management said on 3 November 2026.
Interest 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.
The evidence, claim by claim (8)
- Hagerty Holding Corp. reported a sale of 11,500,000 Class A shares at $14.33 per share from 10 November to 12 November 2026, after converting the same number of derivative securities. SEC Form 4 filed 12 November 2026 · as of
- 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 12 November 2026; Hagerty receives no proceeds. Hagerty 8-K filed 12 November 2026 · as of
- 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. Hagerty 424B7 preliminary prospectus supplement · as of
- Hagerty Holding Corp. reported an open-market sale of 10,637,500 Class A shares at $11.47 from 9 September to 11 September 2026, tied to the $11.95 September offering. SEC Form 4 filed 11 September 2026 · as of
- 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. Hagerty third-quarter 2026 earnings release · as of
- Policies in force rose 18.1% to 1,909,254 and policy retention was 88.2% against 88.6% a year earlier. Hagerty third-quarter 2026 earnings release · as of
- 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. Hagerty third-quarter 2026 earnings release · as of
- The 2026 adjusted EBITDA guidance includes a $52 million benefit from capitalizing acquisition costs that management said will not recur in 2027. Hagerty 3 November 2026 earnings call, per MarketBeat · as of
Sources
- Hagerty, Inc. - Form 8-K - FY2026 · sec.gov ·
- Hagerty, Inc. - Form 424B7 - FY2026 · sec.gov ·
- Hagerty Announces Secondary Offering of its Class A Common Stock · investor.hagerty.com ·
- Hagerty stock falls on secondary share offering · streetinsider.com
- Finviz ·
- MarketBeat ·
- Finviz ·
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