Property insurance provider Heritage Insurance Holdings (NYSE: HRTG) beat Wall Street’s revenue expectations in Q3 CY2025, but sales were flat year on year at $212.5 million. Its non-GAAP profit of $1.56 per share was significantly above analysts’ consensus estimates.

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Company Overview

Operating as a vertically integrated insurer that controls everything from underwriting to claims processing, Heritage Insurance Holdings (NYSE: HRTG) is a super-regional property and casualty insurance company that primarily offers personal and commercial residential insurance across multiple states.

Revenue Growth

Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Thankfully, Heritage Insurance Holdings’s 8% annualized revenue growth over the last five years was decent. Its growth was slightly above the average insurance company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Heritage Insurance Holdings’s annualized revenue growth of 7.9% over the last two years aligns with its five-year trend, suggesting its demand was stable. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Heritage Insurance Holdings’s $212.5 million of revenue was flat year on year but beat Wall Street’s estimates by 1.1%.

Net premiums earned made up 95% of the company’s total revenue during the last five years, meaning Heritage Insurance Holdings lives and dies by its underwriting activities because non-insurance operations barely move the needle.

Our experience and research show the market cares primarily about an insurer’s net premiums earned growth as investment and fee income are considered more susceptible to market volatility and economic cycles.

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Book Value Per Share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

Heritage Insurance Holdings’s BVPS declined at a 1.3% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 57.3% annually over the last two years from $6.05 to $14.96 per share.

Key Takeaways from Heritage Insurance Holdings’s Q3 Results

It was good to see Heritage Insurance Holdings beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its net premiums earned slightly missed. Zooming out, we think this quarter featured some important positives. The stock remained flat at $29.26 immediately following the results.

Is Heritage Insurance Holdings an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.