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Erie Indemnity (NasdaqGS:ERIE)

US29530P1021

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

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

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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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 9 (worse than 91% of alternatives). But they show above-average growth (Growth Rank of 89) 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 9), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 89). 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

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	9
Growth Rank	89
Safety Rank	52
Combined Rank	62

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

This stock has achievements: Top 10 Stock.

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

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Erie Indemnity

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	13	9	6	9
GROWTH
GROWTH	8	5	93	89
SAFETY
SAFETY	57	52	52	52
SENTIMENT
SENTIMENT	n/a	100	90	^new
360° VIEW
360° VIEW	n/a	23	88	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	13	9	6	9
GROWTH
GROWTH	8	5	93	89
SAFETY
SAFETY	57	52	52	52
COMBINED
COMBINED	8	62	62	62

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 9 (worse than 91% 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 13 which means that the stock price compared with what market professionals expect for future profits is higher than 87% 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 4, 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 7 and Dividend Yield, which is lower than 59% 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 9, 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)	29	17	7	13
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	16	9	5	7
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	4	2	5	4
DIVIDEND YIELD
DIVIDEND YIELD	48	49	48	41
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	13	9	6	9

Last update of Value Rank: 19-Dec-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 89 (better than 89% 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 but one indicator above average for Erie Indemnity. Sales Growth has a value of 81 which means that currently professionals expect the company to grow more than 81% of its competitors. Profit Growth with a value of 73 and Capital Growth with a rank of 75 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 45, which means that stock returns have recently been below 55% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Erie Indemnity has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Erie Indemnity, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. 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	16	40	74	81
PROFIT GROWTH
PROFIT GROWTH	100	37	85	73
CAPITAL GROWTH
CAPITAL GROWTH	n/a	27	93	75
STOCK RETURNS
STOCK RETURNS	10	11	59	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	8	5	93	89

Last update of Growth Rank: 19-Dec-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 just one indicator above average for Erie Indemnity and the other two below average. 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.Refinancing is at a rank of 24, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 76% of its competitors. Liquidity is at a rank of 1, meaning that the company generates less profit to service its debt than 99% 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. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Erie Indemnity are on the safer side. Investors may have a short-term debt challenge and liquidity issues 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	72	88	100	100
REFINANCING
REFINANCING	20	24	24	24
LIQUIDITY
LIQUIDITY	70	98	98	1
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	57	52	52	52

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	n/a	94	93	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	87	40	^new
MARKET PULSE
MARKET PULSE	n/a	96	97	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	100	90	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Erie Indemnity.
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