Why Hagerty’s 2025 results and new Markel arrangement matter for investors

Hagerty (HGTY) has drawn fresh attention after reporting 2025 earnings alongside new 2026 guidance that reflects a fronting arrangement with Markel, shifting premium retention, revenue treatment, and expected profitability patterns.

Those 2025 results and the new Markel fronting arrangement landed in a softer share price backdrop, with a 30 day share price return of a 14.67% decline and a year to date share price return of a 17.72% decline, even as the 1 year total shareholder return sits at 11.55%. This suggests that the recent weakness follows a stronger longer run.

If Hagerty’s latest move has you rethinking where you look for opportunity, this could be a good time to broaden your search with our 20 top founder-led companies.

With Hagerty’s shares weaker in the short term, earnings growing in 2025 and fresh 2026 guidance reshaping the story, the key question is whether this reset leaves upside on the table or if the market already prices in future growth?

Most Popular Narrative: 20.8% Undervalued

Hagerty’s most followed narrative pegs fair value at $13.67 versus the last close of $10.82, framing the recent pullback against a higher long term view.

The ramping State Farm partnership is expected to significantly accelerate new business growth, providing access to over 500,000 current program vehicles and thousands of motivated agents, materially expanding Hagerty's customer acquisition funnel and recurring commission revenues at attractive margins over the next several years.

Curious what underpins that $13.67 fair value? The narrative leans heavily on stronger margins, faster earnings growth and a richer earnings multiple than the market is assigning today.

Result: Fair Value of $13.67 (UNDERVALUED)

However, the story could change if younger drivers stay less interested in classic cars or if Hagerty’s full risk retention with Markel leads to weaker underwriting results.

Another View: Our DCF Model Paints A Different Picture

The SWS DCF model points to a fair value of $6.39 per share, compared with the current price of $10.82, which screens as overvalued rather than undervalued. That is a wide gap versus the $13.67 narrative fair value. Which set of assumptions do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Hagerty for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of optimism and caution has you on the fence, it may be helpful to take a closer look at the company’s 3 key rewards so you can form your own view.

Looking for more investment ideas?

If you are weighing what to do next after looking at Hagerty, it makes sense to widen your watchlist with a few focused stock shortlists.

• Consider building income potential with companies that appear more durable, using our list of 14 dividend fortresses to spot options with higher yields.
• Hunt for quality at a price that looks more reasonable by scanning our 47 high quality undervalued stocks and see which names could deserve a closer look.
• Get ahead of the crowd by reviewing our screener containing 24 high quality undiscovered gems, where you can find companies that are not yet widely followed but still pass key fundamentals checks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.