Down 21% From All-Time Highs, Is Progressive Stock a Buy?

• Progressive is inactive increasing rapidly, and its halfway concern is generating beardown profits.

• The banal looks inexpensive connected a price-to-earnings basis, but that doesn't automatically marque it a buy.

• A displacement successful pricing conditions, caller regulations, oregon self-driving exertion implicit clip could alteration the semipermanent picture.

• 10 stocks we similar amended than Progressive ›

Rarely has Progressive (NYSE: PGR) banal looked cheap. It is 1 of the best-run car insurers successful the U.S., with shares usually trading astatine a premium compared to astir insurers. But aft sliding astir 21% from their all-time highs, shares yet lucifer a bargain -- astatine slightest connected the surface.

So, is this pullback a uncommon accidental to bargain a high-quality insurer astatine a much tenable valuation? Or is the stock's descent a motion of much occupation ahead?

It's not similar Progressive's caller concern maturation has been unimpressive. Through the archetypal 9 months of 2025, the institution reported nett premiums written of $63.7 cardinal -- up 13% twelvemonth implicit year. And its nett premiums earned roseate 17% to $60.6 billion.

For those who don't travel security stocks closely, premiums are simply the magnitude of wealth customers wage the institution for coverage. The cardinal quality successful nett premiums written and nett premiums earned is timing. Net premiums written are person to the clip of sale, reflecting the magnitude of caller and renewed sum Progressive enactment connected the books during the period. Net premiums earned, connected the different hand, are what Progressive really counts arsenic gross during the play due to the fact that it has already provided that coverage.

So, erstwhile some nett premiums written and nett premiums earned are rising astatine double-digit rates, it usually means the insurer is bringing successful much concern and past successfully turning it into recognized gross -- often due to the fact that it's adding customers, charging higher mean prices, oregon both.

Another origin reflecting Progressive's awesome maturation is its argumentation growth. At the extremity of Q3, the institution reported full policies successful unit of 38.1 cardinal -- up 12% twelvemonth implicit year.

But how's the institution doing nett of security claims and operating expenses? To find out, investors tin analyse Progressive's combined ratio, which compares the magnitude an insurer pays retired successful claims and operating costs to the premiums it collects. A combined ratio beneath 100, therefore, means the insurer made an underwriting nett connected its security business.

Progressive remains a people enactment connected this front, with a combined ratio of 89.5% successful Q3.