QS Research · Michael Burry's Scion Capital analyst template · 2006
PROGRESSIVE CORP/OH/ (PGR)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -20% · upside +12%
The market is not missing much: it already pays 11.4x TTM earnings and 3.83x book for a 33.7% ROE, a premium to most peer insurers. What it may be missing is durability: Q3 2026 combined ratio improved to 88.7 and policies grew 6%, but written premium per policy and policy life expectancy are falling, Commercial Lines margin is weaker, and fixed-maturity marks hit comprehensive income. I keep section 13's TTM net-income base but not its peer-multiple cases, because the rules require today's 11.4x P/E unless a non-valuation catalyst rerates the stock. Base: 11.4x x $11.62B = $132.5B, +0.4% vs $131.96B; downside: 11.4x x $9.30B (TTM net income -20%) = $106.0B, -19.7%; upside: 11.4x x $13.01B (+12%) = $148.3B, +12.4%. That is neither a long nor a short under the rule, so watch.
Key numbers
- Share price: $227.77
- Market cap: $131.96B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $91.73B
- P/E (TTM): 11.4x
- Price / book: 3.83x
The 15 boxes
- ✓ 1. Long-form business notes
Progressive is a U.S. personal and commercial auto-centered property-casualty insurer: FY2025 Personal Lines was 87% of total net premiums written and Commercial Lines 13%, with personal auto the core. From FY2020 to FY2025 revenue rose from $42.66B to $87.67B, net income to common from $5.68B to $11.31B, and total equity from $17.04B to $30.32B. The mix has shifted toward direct personal vehicle distribution (57% of personal vehicle net premiums written in 2025), added personal residential property inside Personal Lines (4% of Personal Lines net premiums written), and become more TNC-weighted in Commercial Lines (14% of Commercial Lines net premiums written in 2025 versus about 4% in 2020).
- ○ 2. Competitive advantage
Progressive's source record shows scale: revenue rose from $42.66B in FY2020 to $87.67B in FY2025, and pre-tax income rose from $7.17B to $14.22B after a FY2022 dip to $922.0M. The only qualitative advantage management asserts is brand—consumer recognition and trust are called critical, with significant advertising investment—but the sources do not quantify share, margins, ROE or name competitors. Competition is described as advertising-intensive and innovation-sensitive, and risk-based pricing faces regulatory limits, so a durable advantage is asserted more than proven.
- ✓ 3. 10-Q takeaways
Q3 2026 was another quarter of profitable growth but slower: net premiums written rose 4% to $22.3 billion, net premiums earned 5%, policies in force 6%, and the companywide underwriting margin was 11.3% versus 10.5% in Q3 2025. Net income fell $73 million to $2,542 million ($4.37 per share) and total comprehensive income dropped $2,254 million, because the fixed-maturity portfolio swung to unrealized losses (total portfolio FTE return -1.5% versus +1.7%). The reported margin improvement is mostly mix of one-offs — an expense-ratio benefit from 2025 Florida policyholder credits and higher catastrophe losses and severity on the loss side — while premium per policy and retention are falling under competition. Capital is strong ($42.9 billion total capital, 19.6% debt-to-total capital, $35.6 billion estimated statutory surplus) and the company bought back $1.6 billion of stock in the first nine months of 2026.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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