河马（HIPO）：初步分析2025年第一季度每股收益未达预期，但收入超出预期被较高的保险成本所抵消

USA | P&C Insurance/InsurtechHippo First Take: 1Q25 EPS Miss W/ Revenue BeatOffset By Higher Insurance Costs HIPO 1Q25 LPS of $(1.83) missed JEF/Cons $(1.50)/(1.58). Though revenuebeat estimates driven by stronger NPE growth, net losses and insurance-related expenses were weaker. Fixed expenses (S&M, T&D, G&A) were slightlybetter and lower YoY both in absolute dollars and as percentage of revenues.While FY25 revenue guide was better than estimates, EBITDA guide wasweaker, which we expect to ultimately result in HIPO shares underperformingtomorrow. Growth (+/=) :Total revenues were up 30% in the quarter (vs. JEF/Cons 25%/26%), with NPEgrowing 44% (JEF/Cons 30%/35%). Revenue growth was strongest in IAAS (90% vs. JEF 53%),offset by weaker results in HHIP (12% vs. JEF 20%) and Services (3% in-line). Within HHIP higherpremium retention was offset by lower GPE, though alternatively IAAS had the opposite (higherGPE, lower retention). HHIP results included 35% YoY GPW growth from home builder partners. The company notesefforts to reduce exposures to CAT prone areas are largely complete. HHIP is pivoting to growthfollowing better rate adequacy and improved T&C. Gross loss ratio (-) 95.1% vs. JEF/Cons of 91.5%/82.8% and 58.6% in PY:HHIP gross LR was up41pts YoY to 121% due to the CA wildfires which impacted the segment by 68pts. HHIP underlyingGLR was 53%, a 6pt improvement YoY reflecting prior year underwriting actions. Consolidated GLR was 95%, inclusive of 54pts related to CA wildfires, with underlying GLR of 42%(7pt improvement YoY). In total, the CA wildfires impacted results by $45mn in the quarter. HIPOCA wildfire loss figure includes the CA Fair Plan assessment which is also included in adj. EBITDA(LMND does not include such adverse impact). Adj. EBITDA (-) $(41)mn vs. JEF/Cons of $(30)mn/$(31)mn and $(20)mn in PY:Results missedestimates due to the higher losses, though net LR of 106% was in-line with our estimates (but NPEwas greater, driving the miss). Operating expenses (excl. insurance related) were down $7mn YoYand relative to revenue was down 18pp. Insurance related expenses were up $9mn YoY reflectingpremium growth. Management reiterated its expectations of exiting 2025 net income profitable. The companyintends to provide more detailed multi-year guidance at its investor day 6/12. However, EBITDAguidance for 2025 detailing a loss of $(37)mn is worse than JEF/Cons $(5)mn/(18)mn. Alternativelyrevenue guidance for 2025 of $465-475mn is better than JEF/Cons $463mn. Andrew Andersen * | Equity Analyst(312) 750-4445 | aandersen@jefferies.comSuneet Kamath, CFA * | Equity Analyst(212) 778-8602 | skamath@jefferies.comCharlie Rodgers * | Equity Associate+1 (312) 750-4783 | crodgers@jefferies.com Company Description Hippo Hippo, founded in 2015 and public since 2021, is a technology-enabled omni-channel homeowner insurance provider. Company Valuation/Risks Hippo Our price target is established using an EV/adjusted EBITDA multiple. We apply a target multiple of 11.0x to our 2028E Adj. EBITDA. Downside risksinclude longer timeline to loss ratio improvement that leads to quicker cash burn and requires company to scale back growth and deteriorating losstrends that lead to higher-than-expected pricing changes, which could lead to lower retention and slow premium growth. Analyst Certification: I, Andrew Andersen, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed in this research report. I, Suneet Kamath, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed in this research report. I, Charlie Rodgers, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressedin this research report. As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receivescompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research as appropriate, butvarious regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majority of reports are publishedat irregular intervals as appropriate in the analyst's judgement. Investment Recommendation Record (Article 3