HGTY

ANALYST NOTE: HGTY (Hagerty, Inc.) Date: 2026-06-13 Event Date: 2026-06-13

1. Structural Readiness

Current Price: $10.87 Conservative Entry: — (Breakout not yet fired) Aggressive Entry: $10.91 (Pre-breakout / forming entry) Breakout Level: $13.86 (Resistance to clear) Extension: —

Analysis:

2. Thesis Layer

Thesis Status: TACTICAL / Setup-Led Secular Exposure: None named at this date.

As of June 13, 2026, there is no named macro or secular thesis driving this specific setup. This is a tactical, setup-led name. The conviction must be derived strictly from the quality of the structural formation (the Coil) and the underlying business fundamentals reported in the most recent filings. No external narrative should be invented to support the trade; the trade is justified only if the setup resolves favorably and the business metrics support the valuation.

3. Business Overview

Company: Hagerty, Inc. Industry: Financial Services (Specialty Insurance & Reinsurance) Business Model: Hagerty operates as a market leader in insurance for collector cars and enthusiast vehicles, supported by a reinsurance subsidiary (Hagerty Re) and a diversified ecosystem of media, valuation tools, and marketplace services.

Key Business Drivers (as of 2026):

• Premium Growth: Management reported written premiums increased 18% in Q1 2026, exceeding full-year expectations. The company is reaffirming guidance for 15% to 16% written premium growth for the full year 2026.
• Strategic Partnerships: A significant portion of revenue is derived from the Markel Alliance. Commission revenue from this agreement was $436.8 million in 2025, representing 91% of total commission revenue. As of January 1, 2026, Hagerty Re assumed 100% of the net retained liabilities for Essentia-originated policies, receiving $50.5 million in cash consideration.
• Product Expansion: The company is rolling out "Enthusiast+" (launched in Colorado in Q3 2025) to cover modern enthusiast vehicles driven more frequently. Management expects a phased, nationwide rollout over the next four years.
• Member Conversion: The conversion of State Farm's 525,000 existing collector car policies to the Hagerty platform is progressing well, with most expected to convert to the new Classic+ program by the end of 2027.
• Diversification: Beyond insurance, the company operates Hagerty Valuation Tools (HVT), HDC (subscription media/events), and DriveShare (peer-to-peer rental).

4. Archetype and Conviction

Archetype: Growth Leader Rationale: The company fits the "Growth Leader" archetype based on the double-digit premium growth (18% Q1, 15-16% FY guidance) and the successful expansion into new product lines (Enthusiast+) and market segments (modern enthusiast vehicles). The business model is showing margin inflection potential through the increased retention of risk via the Markel Fronting Arrangement and the 100% quota share on Essentia policies, which management expects to result in "increased profitability and additional control."

Valuation & Financial Context:

• Financial Spine: Forward consensus EPS for FY1 is projected at -$0.10625, with a turnaround to $0.5725 in FY2. This indicates the market is pricing in a near-term loss followed by profitability.
• Volatility (ATR): Current ATR is 3.8%, categorized as "productive." This sits within the historical sweet spot (4-6% is ideal, but 3.8% is robust enough for sizing without being "very high" or "extreme").
• Conviction Stack:
• *Thesis Strength:* Low (Tactical only).
• *Evidence Quality:* High (Strong earnings guidance, clear strategic shifts).
• *Structural Quality:* Moderate (Forming coil, awaiting breakout).
• *Setup Readiness:* Partial (69% historical breakout probability).
• *Rerating Potential:* Dependent on the successful execution of the FY2026 profitability targets and the completion of the Enthusiast+ rollout.

5. Invalidations, Strengths, and Gaps

What Would Strengthen the Case:

• Breakout Confirmation: A daily close above $13.86 would confirm the coil, shifting the setup from "forming" to "confirmed-active."
• Guidance Raise: Management raising the full-year adjusted EBITDA guidance above the $247 million high end.
• Conversion Acceleration: Faster-than-expected conversion of the State Farm portfolio.

What Would Invalidate the Case:

• Guidance Cut: Any reduction in the 15-16% premium growth guidance or EBITDA targets.

Evidence Gaps:

• No Disconfirming Evidence: The provided evidence block contains no negative signals or disconfirming data as of the event date.
• Missing ATR at Breakout: The structural quality metric "ATR at breakout" is currently unavailable, as the breakout has not occurred. This limits the ability to assess the volatility profile of the eventual move.
• Missing Sector Specifics: The industry classification is listed as "—" in the setup data, though the business is clearly Financial Services/Insurance.

PRIVATE ANALYST CALL

Judgment: Speculative Confidence: medium Key evidence: Q1 written premiums up 18% ahead of full-year expectations; Reinsurance structure (Markel/Essentia) now assumes 100% of net retained liabilities for Essentia policies; Management reaffirms 15-16% premium growth guidance for 2026. Key risks: Current price is below the aggressive entry level and far from the breakout level; Forward consensus EPS remains negative for FY1; Setup is a forming coil with only partial historical breakout readiness (69%). Sizing hint: Position size should be conservative given the "forming" state and the distance to the breakout level; treat as a satellite position pending confirmation. Expected path: Management expects mid-teens growth in written premiums and a phased rollout of Enthusiast+ over four years; structural implication is a potential rerating if FY2 profitability targets are met. Expected horizon: 3 to 6 months for the setup to resolve (breakout or invalidation).