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Erie Indemnity (NasdaqGS:ERIE)

US29530P1021

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Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

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Erie Indemnity stock research in summary

erieinsurance.com


ANALYSIS: With an Obermatt Combined Rank of 62 (better than 62% compared with investment alternatives), Erie Indemnity (Property & Casualty Insurance, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Erie Indemnity are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more


RECOMMENDATION: A Combined Rank of 62, is a buy recommendation based on Erie Indemnity's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Erie Indemnity exhibits low value (Obermatt Value Rank of 10), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country USA
Industry Property & Casualty Insurance
Index NASDAQ, D.J. US Insurance
Size class Large

This stock has achievements: Top 10 Stock.

20-Jun-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Research History: Erie Indemnity

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 20-Jun-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Erie Indemnity is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 62 (better than 62% compared with investment alternatives), Erie Indemnity (Property & Casualty Insurance, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Erie Indemnity are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 62, is a buy recommendation based on Erie Indemnity's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Erie Indemnity exhibits low value (Obermatt Value Rank of 10), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Erie Indemnity the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Erie Indemnity shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Erie Indemnity. Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Erie Indemnity's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 5, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Erie Indemnity. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 57% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Erie Indemnity's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Erie Indemnity? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Erie Indemnity? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Erie Indemnity may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 20-Jun-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Erie Indemnity; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2022, Erie Indemnity shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Erie Indemnity. Sales Growth has a value of 80, which means that, currently, professionals expect the company to grow more than 80% of its competitors. The same is valid for Profit Growth with a value of 56 and for Capital Growth with 75. In addition, Stock Returns had an above-average rank value of 96, which means they have been higher than 96% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Erie Indemnity exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 20-Jun-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Erie Indemnity.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Erie Indemnity has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Erie Indemnity is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Erie Indemnity. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 24, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 76% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Erie Indemnity has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Erie Indemnity. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Erie Indemnity and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Erie Indemnity and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 20-Jun-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Erie Indemnity.
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Free stock analysis by the purely fact based Obermatt Method for Erie Indemnity from June 20, 2024.

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