Hagerty Inc. Class A Common Stock (HGTY)

FairStock Score: 70/100 — STEADY

Key Financials

Strengths

• Generates $197 million in annual free cash flow (18.4% yield on market cap)
• High return on equity of 20.9% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.24, providing financial flexibility
• Revenue growth of 33.0% demonstrates strong top-line momentum
• FairStock composite score of 70/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($4) with negative 147% margin of safety—limited downside protection
• Altman Z-Score of 0.4 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Hagerty Inc. Class A Common Stock is a micro-cap financial services company valued at $1.1 billion. The business generates $1.5 billion in annual revenue with a 0.5% net margin and $197 million in free cash flow. From a quality standpoint, Hagerty shows distressed Altman Z-Score of 0.4 warrants caution and strong 21% ROE. On valuation, the stock is trading at a premium 28.7x earnings, with trades far above its Graham Number ($4) with no margin of safety. Growth dynamics show revenue growing at 33.0% and profit growth of 184.3%. Our composite FairStock Score of 70/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Hagerty's 33% revenue growth trajectory could accelerate as it captures additional market share in the financial services sector. With $197 million in annual free cash flow (18.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer