Is Hagerty, Inc. overvalued or undervalued?

As of 4 August 2025, Hagerty, Inc. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued, given its high P/E ratio of 128, a price-to-book value of 13.73, and an EV to EBITDA ratio of 83.85. In comparison to its peers, Mercury General Corp. has a much more attractive P/E of 11.03, while Palomar Holdings, Inc. has a fair P/E of 21.54, highlighting the significant premium at which Hagerty is trading.
Despite its overvaluation, Hagerty has shown strong recent performance, with a year-to-date return of 34.51%, significantly outperforming the S&P 500's 12.22% over the same period. However, its three-year return of 28.13% pales in comparison to the S&P 500's 70.41%, suggesting that while the stock has performed well recently, it may not justify its current valuation relative to broader market trends.