Mercury General delivers exceptional earnings consistency — four straight quarters of large beats averaging approximately 73% above estimates — and screens deeply cheap at a forward multiple of 8.4x with free cash flow running nearly twice net income, but a hard geographic concentration block on California and only 1% upside to the analyst target make this a hold rather than a new entry at current prices.
Thesis pillars
- Deep Value At Low Multiple→Stable
- Consistent Earnings Outperformance↑Improving
- California Concentration Terminal Risk↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 17, 2026· older than 90 days
Mercury General Corporation (MCY) Stock Analysis
Financial Services · Insurance - Property & Casualty
Hold if already holding. Not a fresh buy at $88.93, but acceptable to hold if already in. Reasons: Single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk.; Concentration risk — Geographic: California (85.0%).
Mercury General Corporation writes personal automobile, homeowners, commercial automobile, and other property-casualty insurance through 12 subsidiaries in 11 states, with California representing 82.1% of total direct premiums written in 2025. The company sells through... Read more
Hold if already holding. Not a fresh buy at $88.93, but acceptable to hold if already in. Reasons: Single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk.; Concentration risk — Geographic: California (85.0%). Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Score 6.7/10, high confidence.
Passes 6/8 gates (favorable risk/reward ratio, clean insider activity, no SEC red flags, earnings proximity 103d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and finsvc regional cliff hard block. Suitability: speculative.
About Mercury General Corporation
About Mercury General Corporation
Mercury General Corporation wrote $5.98 billion in direct premiums in 2025, with private passenger automobile representing 60.0% of direct premiums written, homeowners 27.3%, and commercial automobile 6.5%. California accounted for 82.1% of total direct premiums written in 2025; the company operates in 11 states through 12 insurance subsidiaries, all rated A (Excellent) by A.M. Best, employing approximately 4,300 people at December 31, 2025.
Mercury General earns revenue through personal and commercial insurance policies sold primarily through about 8,510 independent agents that accounted for approximately 88% of direct premiums written in 2025; two owned agencies, AIS and PoliSeek, supplement this distribution. Net commissions were about 15% of net premiums written. The combined loss and expense ratio was 96.5% company-wide in 2025 (versus 96.1% in 2024), with private passenger automobile only at 89.5%. The investment portfolio totaled $6.24 billion at fair value at December 31, 2025, comprising $5.43 billion in fixed maturities (of which approximately 53% in tax-exempt municipal bonds) and $812 million in equity securities, supporting investment income alongside earned premiums.
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California's regulatory environment presents a structural constraint: the state's DOI requires prior rate approval and allows consumer groups to intervene in filings — and in January 2025, the Palisades and Eaton wildfires drove $508 million in net catastrophe losses (after $586 million in recorded subrogation). A.M. Best revised the outlook for the California Companies from Stable to Negative in February 2025, citing adverse claims experience. The 10-K notes that if the company cannot obtain timely rate approvals in California, its ability to operate profitably may be limited.
See also: Financial Services · Insurance - Property & Casualty
From Mercury General Corporation's most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated Nov 3, 2026Recent Developments — Mercury General Corporation
Latest news
- NEWS Mercury General Q3 Adj. EPS $3.49 Beats $3.42 Estimate, Sales $1.381B Miss $1.632B Estimate — benzinga Nov 3, 2026 neutral
- NEWS Mercury General (MCY) Projected to Post Quarterly Earnings on Tuesday - MarketBeat — MarketBeat Oct 27, 2026 neutral
- NEWS MCY Q3'26 Earnings: revenue estimate is 1.62B USD - TradingView — TradingView Oct 27, 2026 neutral
- NEWS Mercury NZ Limited Issues Amended Capital Change Notice for DRP Share Issuance - Kalkine — Kalkine Sep 30, 2026 neutral
- NEWS Should Value Upgrade Require Action From Mercury General (MCY) Investors? - Simply Wall Street — Simply Wall Street Sep 30, 2026 positive
Latest item Nov 3, 2026 · Generated 2026-11-05T11:29:01Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHGeographicCalifornia85%10-K Item 1A: 'the Company generated approximately 85% of its direct automobile insurance premiums written in California'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker·1 ceiling hit
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $88.93, but acceptable to hold if already in. Reasons: Single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk.; Concentration risk — Geographic: California (85.0%). Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Analyst target $102.00 (+14.7%), stop $84.88 (−4.8%), A.R:R 1.9:1. Score 6.7/10, high confidence.
Analyst target: $102.00 (+14.7% upside). Analyst target $102.00 (+14.7%), stop $84.88 (−4.8%), A.R:R 1.9:1. Stop-loss: $84.88.
Single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk.; Concentration risk — Geographic: California (85.0%); Negative momentum.
Mercury General Corporation trades at a P/E of 7.7 (forward 7.3). TrendMatrix value score: 9.8/10. Verdict: Hold.
6 analysts rate MCY, with a consensus score of 4.0/5. 1 analysts publish price targets averaging $120.
What does Mercury General Corporation do?Mercury General Corporation writes personal automobile, homeowners, commercial automobile, and other property-casualty...
Mercury General Corporation writes personal automobile, homeowners, commercial automobile, and other property-casualty insurance through 12 subsidiaries in 11 states, with California representing 82.1% of total direct premiums written in 2025. The company sells through approximately 8,510 independent agents and two owned agencies (AIS and PoliSeek); direct premiums written totaled $5.98 billion in 2025.