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Progressive (PGR) Up 5.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 5.9% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Progressive's Q2 Earnings Beat, Premiums Rise Y/Y
The Progressive Corporation’s second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year.
Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Behind the Headlines
Net premiums written were $17.9 billion in the quarter, up 22% from $14.7 billion a year ago. Premiums beat our estimate of $17.3 billion.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion.
Net realized loss on securities was $126.3 billion against $126.9 million earned in the year-ago quarter.
Combined ratio — the percentage of premiums paid out as claims and expenses — improved 850 basis points (bps) from the prior-year quarter’s level to 91.9.
June Policies in Force
Policies in force were strong in the Personal Auto segment, up 10% from the year-ago month’s figure to 21.5 million. Special Lines improved 8% to 6.3 million.
In the Personal Auto segment, Direct Auto increased 12% year over year to 12.6 million, while Agency Auto increased 6% to 9 million.
Progressive’s Commercial Auto segment rose 1% year over year to 1.1 million. The Property business had 3.3 million policies in force, up 12%.
Financial Update
Progressive’s book value per share was $39.85 as of Jun 30, 2024, up 43.8% from $27.71 as of Jun 30, 2023.
Return on equity in June 2024 was 40.2%, up from 8% reported in the year-ago period. The total debt-to-total capital ratio improved 640 bps to 22.8.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.48% due to these changes.
VGM Scores
At this time, Progressive has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. 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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Progressive (PGR) Up 5.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 5.9% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Progressive's Q2 Earnings Beat, Premiums Rise Y/Y
The Progressive Corporation’s second-quarter 2024 earnings per share of $2.65 beat the Zacks Consensus Estimate of $1.99. The bottom line improved more than five times year over year.
Operating revenues of $18.3 billion beat the Zacks Consensus Estimate by 1.4% and increased 18.9% year over year.
Behind the Headlines
Net premiums written were $17.9 billion in the quarter, up 22% from $14.7 billion a year ago. Premiums beat our estimate of $17.3 billion.
Net premiums earned grew 19% to $17.2 billion and beat our estimate of $16.7 billion.
Net realized loss on securities was $126.3 billion against $126.9 million earned in the year-ago quarter.
Combined ratio — the percentage of premiums paid out as claims and expenses — improved 850 basis points (bps) from the prior-year quarter’s level to 91.9.
June Policies in Force
Policies in force were strong in the Personal Auto segment, up 10% from the year-ago month’s figure to 21.5 million. Special Lines improved 8% to 6.3 million.
In the Personal Auto segment, Direct Auto increased 12% year over year to 12.6 million, while Agency Auto increased 6% to 9 million.
Progressive’s Commercial Auto segment rose 1% year over year to 1.1 million. The Property business had 3.3 million policies in force, up 12%.
Financial Update
Progressive’s book value per share was $39.85 as of Jun 30, 2024, up 43.8% from $27.71 as of Jun 30, 2023.
Return on equity in June 2024 was 40.2%, up from 8% reported in the year-ago period. The total debt-to-total capital ratio improved 640 bps to 22.8.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.48% due to these changes.
VGM Scores
At this time, Progressive has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Progressive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.