It has been about a month since the last earnings report for Progressive (PGR). Shares have added about 2.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Progressive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Progressive's Q3 Earnings & Revenues Top, Premiums Rise Y//Y
The Progressive Corporation’s third-quarter 2024 earnings per share of $3.97 beat the Zacks Consensus Estimate of $3.40. The bottom line more than doubled year over year.
Operating revenues of $19.5 billion improved 24.9% year over year and beat the consensus estimate by 2.6%.
Behind the Headlines
Net premiums written were $19.5 billion in the quarter, up 25% from $15.6 billion a year ago.
Net premiums earned grew 23% to $18.3 billion. The reported figure surpassed the Zacks Consensus Estimate of $18 billion.
Net realized gain on securities was $287.4 billion against a loss of $149 million incurred in the year-ago quarter.
Combined ratio — the percentage of premiums paid out as claims and expenses — improved 340 basis points (bps) from the prior-year quarter’s level to 89.
September Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 17% from the year-ago month’s figure to 22.8 million. Special Lines improved 9% to 6.5 million.
In the Personal Auto segment, Direct Auto increased 20% year over year to 13.4 million, while Agency Auto increased 19% to 9.4 million.
Progressive’s Commercial Auto segment rose 2% year over year to 1.1 million. The Property business had 3.5 million policies in force, up 14%.
Financial Update
Progressive’s book value per share was $46.36 as of Sept. 30, 2024, up 60.5% from $28.89 as of Sept. 30, 2023.
Return on equity in September 2024 was 50.9%, up from 17.4% reported in the year-ago period. The total debt-to-total capital ratio improved 820 bps to 20.2.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -6.51% due to these changes.
VGM Scores
Currently, Progressive has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Progressive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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The Progressive Corporation (PGR) : Free Stock Analysis Report
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