HCI Group earnings: what to look for from HCI

What happened

HCI Group, an insurance and technology company, will report earnings on Wednesday after the stock market closes. Last quarter it reported revenues of $246.7 million, up 11.1% from a year earlier, beating revenue expectations but missing analysts' book value per share estimates.

Confirmed

Global impact / market context

The market expects HCI Group's revenue to grow 16.4% this quarter, slower than last year's 23.4% growth. Because HCI has repeatedly missed revenue estimates over the past two years, investors will likely compare this quarter's reported revenue with those forecasts to judge whether the business is slowing.

Analyst inference

Peers in property and casualty insurance, which covers damage to property and legal liability, have already reported. Markel Group grew revenue 5.7% and RLI grew 5.3%, both beating estimates. These results give investors a benchmark for judging whether HCI's expected 16.4% growth is realistic.

Analyst inference

What to watch

1. HCI Group will report earnings on Wednesday after the market closes, so the next stock trading session will be the first chance for investors to react to the reported revenue and book value per share figures. Confirmed
2. Analysts have reconfirmed their estimates over the last 30 days, which suggests they expect results in line with forecasts. An actual revenue figure above or below the 16.4% expected growth would test that view. Analyst inference
3. Investors should compare HCI's revenue growth with Markel's 5.7% and RLI's 5.3%, both of which beat estimates, to judge whether HCI's expected 16.4% growth is achievable for this insurance industry segment. Proposed

Evidence

• stockstory.org