MeritValue

Heritage Insurance Holdings, Inc.

HRTGdata completeness 100%13 fiscal years on file
The thesis, from the filings

Heritage Insurance Holdings, Inc. earns about -12% on equity, below its ~9% cost of capital, but has diluted owners by 11% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $15.17 and $87.65 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$631.6M1$662.5M2$735.5M3$817M3$847.3M3
Net income−$74.7M4−$154.4M5$45.3M6$61.5M6$195.6M6
Operating cash flow$60.1M7−$34.3M8$70.4M9$87.1M9$182.2M9
Capital expenditure$1.01M10$8.56M11$9.89M12$8.23M12$8.07M12
Free cash flow (derived)$59.1M7−$42.8M8$60.5M9$78.9M9$174.2M9
Total debt$120.8M13$128.9M14$119.7M15$116.3M16$78.4M16
Cash & equivalents$359.3M17$280.9M18$463.6M19$452.7M20$559.3M20
Diluted shares27.8M26.3M26.3M30.7M30.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$163.25
your share of equity
Profit it earned you last year
$63.2
Free cash flow it threw off
$56.27
Debt you’d be carrying
$25.34

10 shares is a claim on $163.25 of net worth that earned you $63.2 and generated $56.27 of cash last year, against $25.34 of debt.

iii. Is this a good business?
Moat signal · return on equity
-12% avg · 5y
FY21 -22%FY22 -118%FY23 21%FY24 21%FY25 39%

It earned about -12% on equity against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+11% shares · 5y

Share count is up 11% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 35% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $15.17 and $87.65 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$87.65
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth10.1%
  • fcfBase$78.9M
DCF · Growth Exit 5Y
$71.49
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth10.1%
  • fcfBase$78.9M
Earnings Power Value
$15.17
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$45.3M
  • growthAssumed0.0%
Graham Number
$48.18
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years10.1%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $71.49
The three cases
Bear0.0%$51.94
Base10.1%$71.49
Bull15.1%$84.05

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 10.1%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-030766 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001598665-25-000009 (Revenues)
  3. 10-K/A · period ending 2023-12-31 · accession 0001193125-26-115451 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-030766 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001598665-25-000009 (NetIncomeLoss)
  6. 10-K/A · period ending 2023-12-31 · accession 0001193125-26-115451 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-030766 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001598665-25-000009 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K/A · period ending 2023-12-31 · accession 0001193125-26-115451 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-030766 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001598665-25-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K/A · period ending 2023-12-31 · accession 0001193125-26-115451 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000950170-23-007569 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0000950170-24-030766 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001598665-25-000009 (LongTermDebt)
  16. 10-K/A · period ending 2024-12-31 · accession 0001193125-26-115451 (LongTermDebt)
  17. 10-K · period ending 2021-12-31 · accession 0000950170-23-007569 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000950170-24-030766 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001598665-25-000009 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K/A · period ending 2024-12-31 · accession 0001193125-26-115451 (CashAndCashEquivalentsAtCarryingValue)