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Hippo Holdings (HIPO) Surges 18.2%: Is This an Indication of Further Gains?

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Hippo Holdings Inc. (HIPO - Free Report) shares soared 18.2% in the last trading session to close at $22.17. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.4% gain over the past four weeks.

Growth in placements of policies for customers with third-party carriers and growth of existing programs boosted by higher risk retention with some of the programs.  should continue to drive solid performance of services and insurance segments.

Leveraging proprietary technology to improve operational efficiency resulting in increased customer lifetime value and lower customer acquisition cost bodes well for growth. Lowering business exposure to wind and hail event will accelerate growth.

Also, HIPO seems to be institutional investors’ favored stock. Per published media reports, the top 13 shareholders own 51% of the company while institutional investors has 37% ownership.

This company is expected to post quarterly loss of $1 per share in its upcoming report, which represents a year-over-year change of +55.4%. Revenues are expected to be $94.2 million, up 63.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Hippo Holdings, the consensus EPS estimate for the quarter has been revised 1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on HIPO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Hippo Holdings is a member of the Zacks Insurance - Multi line industry. One other stock in the same industry, Radian (RDN - Free Report) , finished the last trading session 1% lower at $34.91. RDN has returned 2.6% over the past month.

Radian's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.88. Compared to the company's year-ago EPS, this represents a change of -15.4%. Radian currently boasts a Zacks Rank of #3 (Hold).


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