Is Mercury General Corp. overvalued or undervalued?

As of 8 May 2025, the valuation grade for Mercury General Corp. has moved from fair to attractive, indicating a more favorable assessment of the company's worth. The company is currently considered undervalued, with a P/E ratio of 13, which is lower than its peers such as Kemper Corp. at 10.70 and NMI Holdings, Inc. at 8.17. Additionally, Mercury's PEG ratio stands at a compelling 0.38, suggesting strong growth potential relative to its price.
In terms of financial metrics, Mercury General Corp. has a price-to-book value of 1.99 and an EV to EBITDA ratio of 36.90. Compared to its peers, the company appears to be positioned well, especially when considering that SiriusPoint Ltd. is deemed expensive with a P/E of 13.53. Furthermore, the company's stock has outperformed the S&P 500 over the past year, with a return of 24.82% compared to the index's 10.26%, reinforcing the attractiveness of its current valuation.