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Erie Indemnity Company (ERIE)
NASDAQ:ERIE
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Erie Indemnity Company
(NASDAQ:ERIE)
76Outperform
Erie Indemnity Company (ERIE) vs. S&P 500 (SPY)
Market Cap
$19.63B
Dividend Yield1.23%
Average Volume (3M)141.63K
Price to Earnings (P/E)37.0
Beta (1Y)0.21
Revenue Growth16.38%
EPS Growth34.58%
CountryUS
Employees6,715
SectorFinancial
Sector Strength85
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)11.39
Shares Outstanding46,189,068
10 Day Avg. Volume134,793
30 Day Avg. Volume141,627
Financial Highlights & Ratios
PEG Ratio1.07
Price to Book (P/B)N/A
Price to Sales (P/S)4.90
Price to Cash Flow (P/CF)24.50
P/FCF Ratio24.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
Erie Indemnity Company Business Overview & Revenue Model
Company DescriptionErie Indemnity Company operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. The company provides sales, underwriting, policy issuance, and renewal services for the policyholders on behalf of the Erie Insurance Exchange. It also offers sales related services, including agent compensation, and sales and advertising support services; and underwriting services comprise underwriting and policy processing; and other services consist of customer services and administrative support services, as well as information technology services. Erie Indemnity Company was incorporated in 1925 and is based in Erie, Pennsylvania.
How the Company Makes MoneyErie Indemnity Company makes money primarily through its role as the management company for the Erie Insurance Exchange. It earns revenue by providing sales, underwriting, and administrative services to the Exchange, for which it receives management fees. These fees are calculated as a percentage of the direct written premiums of the policies sold by the Exchange. The company also benefits from investment income generated from its portfolio of investments. Additionally, Erie Indemnity Company may form strategic partnerships or enter into reinsurance agreements to optimize its financial performance and manage risk effectively.
Erie Indemnity Company Financial Statement Overview
Summary
Erie Indemnity Company exhibits strong financial health with significant revenue and profit growth, a robust balance sheet with no debt, and solid cash flow generation. The company's strategic focus on operations is yielding positive results, positioning it well within the insurance industry.Income Statement
Erie Indemnity Company has demonstrated strong revenue growth, with a 16.1% increase from 2023 to 2024. The net profit margin improved significantly to 15.8% in 2024, up from 13.6% in 2023. EBIT and EBITDA margins are robust at 17.8%, indicating efficient operational performance.85
Very Positive
Balance Sheet
The company's balance sheet is strong, with no total debt as of 2024, resulting in a debt-to-equity ratio of 0. The equity ratio is healthy at 68.8%, and the return on equity is impressive at 30.2%, reflecting efficient use of equity to generate profits.90
Very Positive
Cash Flow
Operating cash flow increased significantly by 60.3% from 2023 to 2024, supporting a positive free cash flow growth of 68.6%. The operating cash flow to net income ratio is strong at 1.02, indicating good cash generation relative to net income. However, the free cash flow to net income ratio is slightly lower at 0.81.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.80B | 3.27B | 2.84B | 2.70B | 2.57B | Gross Profit |
| 3.80B | 520.26M | 376.85M | 385.43M | 371.02M | EBIT |
| 676.46M | 520.26M | 378.46M | -286.12M | -266.72M | EBITDA |
| 676.46M | 600.23M | 430.18M | 318.10M | 338.16M | Net Income Common Stockholders |
| 600.31M | 446.06M | 298.57M | 297.86M | 293.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 343.00M | 226.07M | 166.36M | 222.10M | 178.94M | Total Assets |
| 2.89B | 2.47B | 2.24B | 2.24B | 2.12B | Total Debt |
| 0.00 | 112.25M | 122.50M | 93.83M | 95.86M | Net Debt |
| -298.40M | -131.51M | -19.59M | -89.87M | -65.38M | Total Liabilities |
| 901.36M | 809.13M | 791.05M | 899.58M | 929.07M | Stockholders Equity |
| 1.99B | 1.66B | 1.45B | 1.34B | 1.19B |
| Cash Flow | Free Cash Flow | |||
| 486.40M | 288.56M | 298.95M | 253.99M | 287.07M | Operating Cash Flow |
| 611.25M | 381.20M | 366.15M | 402.79M | 342.60M | Investing Cash Flow |
| -226.91M | -157.56M | -106.92M | -185.49M | -243.22M | Financing Cash Flow |
| -230.00M | -221.68M | -300.84M | -194.84M | -274.87M |
Erie Indemnity Company Technical Analysis
Negative
396.57
Price Trends
411.41
Negative
411.83
Negative
432.44
Negative
Market Momentum
-0.17
Positive
46.29
Neutral
42.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERIE, the sentiment is Negative. The current price of 396.57 is below the 20-day moving average (MA) of 418.53, below the 50-day MA of 411.41, and below the 200-day MA of 432.44, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 46.29 is Neutral, neither overbought nor oversold. The STOCH value of 42.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ERIE.
Erie Indemnity Company Risk Analysis
Erie Indemnity Company disclosed 11 risk factors in its most recent earnings report. Erie Indemnity Company reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Erie Indemnity Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $88.08B | 52.98 | 9.46% | 0.71% | 15.21% | 46.99% | |
77 Outperform | $35.67B | 36.02 | 16.35% | 0.45% | 12.89% | 13.50% | |
76 Outperform | $19.63B | 37.00 | 32.89% | 1.23% | 16.38% | 34.58% | |
76 Outperform | $120.40B | 29.84 | 31.80% | 1.29% | 7.60% | 8.66% | |
73 Outperform | $85.17B | 31.57 | 100.25% | 0.68% | 17.51% | 1.31% | |
72 Outperform | $33.04B | ― | -1.12% | 1.07% | 4.74% | -108.62% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
ERIE
Erie Indemnity Company
396.57
1.73
0.44%
AON
Aon
375.76
58.51
18.44%
AJG
Arthur J Gallagher & Co
319.25
77.11
31.85%
BRO
Brown & Brown
115.01
29.99
35.27%
MMC
Marsh & Mclennan Companies
230.20
28.86
14.33%
WTW
Willis Towers Watson
308.80
44.57
16.87%
Erie Indemnity Company Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -2.08% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment driven by strong financial performance, significant growth in direct written premiums, and successful technology modernization efforts. The company also received industry recognition and made notable leadership appointments. However, these positives are slightly offset by increased operating expenses and slower policy growth.Highlights
Strong Financial Performance in 2024
Erie Indemnity Company reported net income of $600 million in 2024, up from $446 million in 2023. Additionally, the combined ratio improved significantly from 119.1 in 2023 to 110.4 in 2024.
Growth in Direct Written Premiums
Direct written premiums of the Exchange grew 16% in Q4 2024 and over 18% for the full year compared to 2023.
Successful Technology Modernization
Multiple legacy systems have been migrated to modern platforms, enhancing product, service, and digital capabilities, including a new billing platform and Business Auto 2.0.
Recognition and Leadership Appointments
Erie was recognized as a top 100 employer for workplace culture for the second consecutive year, and received accolades for its internship program. Two senior leaders were promoted to executive vice presidents.
Lowlights
Increased Operating Expenses
The total cost of operations increased by 11.4% for Q4 2024 and 15% for the full year, with significant increases in commission and non-commission expenses.
Slower Policy Growth
Policies in force grew by 4.8% in 2024, a slowdown from the significant growth of 6.9% in 2023.
Company Guidance
In the Erie Indemnity Company's fourth quarter and year-end 2024 earnings call, the company reported robust financial performance, with direct written premiums for Erie Insurance Exchange growing by 16% in the fourth quarter and over 18% for the full year compared to 2023. The average premium per policy increased by over 13%, while policies in force grew by 4.8% to exceed 7 million. The policyholder retention rate remained strong at 90.4%. The Exchange's combined ratio improved to 105.7 in the fourth quarter and 110.4 for the year, with catastrophe losses contributing 9.6 points compared to 12.6 points in 2023. Erie Indemnity's net income reached $600 million in 2024, translating to $11.48 per diluted share, up from $446 million or $8.53 per share in 2023. Management fee revenue and operating income also saw significant increases, with management fee revenue rising 16.1% in the fourth quarter and 18.5% for the year. The company highlighted successful modernization efforts, including the migration of legacy systems to the cloud, enhancing product and service offerings. Investment income reached over $69 million, driven by improved partnership results and gains. Erie also announced a 7.1% dividend increase for 2025.Erie Indemnity Company Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Erie Indemnity Appoints New Executive Vice Presidents
Neutral
Dec 17, 2024
Erie Indemnity Company has announced the appointment of Cody Cook as Executive Vice President, Claims, and Sarah Shine as Executive Vice President, Experience and Customer Service, effective January 1, 2025. Both executives have long-standing careers within the company, with Cook having joined in 2003 and Shine in 2000, each holding various senior positions. Their appointments indicate a strategic continuation of leadership within the company aimed at strengthening its operational and customer service capabilities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.