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→Stable
- +1 more pillar — see the Why tab for full reasoning
Mercury General Corporation (MCY) Stock Analysis
Range Bound setup
Financial Services · Insurance - Property & Casualty
Wait for pullback to $94.38. BUY gates pass at $104.87, but single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk. and concentration risk — Geographic: California (85.0%) argue for a more patient entry. Engine's entry $94.38 (Ma200 Sticky) is the shallowest technical level that clears the 2:1 A.R:R minimum.
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
Wait for pullback to $94.38. BUY gates pass at $104.87, but single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk. and concentration risk — Geographic: California (85.0%) argue for a more patient entry. Engine's entry $94.38 (Ma200 Sticky) is the shallowest technical level that clears the 2:1 A.R:R minimum. Chart setup: RSI 46 mid-range, Bollinger mid-band. Fundamentals strong but target reached (-2.7% upside). Wait for pullback. Score 6.9/10, high confidence.
Passes 7/9 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, earnings proximity 60d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio 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 2026-09-04Recent Developments — Mercury General Corporation
Latest news
- NEWS Mercury General Corp (MCY) Valuation: PE, PB & Fair Value Analysis - TradingKey — TradingKey neutral
- NEWS Mercury General Corp (MCY) Institutional Confidence - TradingKey — TradingKey neutral
- NEWS Mercury General Corp (MCY) Valuation: PE, PB & Fair Value Analysis - tradingkey.com — tradingkey.com neutral
- NEWS Mercury General (NYSE:MCY) Downgraded to Hold Rating by Zacks Research - MarketBeat — MarketBeat negative
- NEWS Mercury General (MCY) Stock Looks Cheap On Fair Value But Less So After 284% Run - Yahoo Finance — Yahoo Finance neutral
Generated 2026-09-04T15:07:39Z.
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.
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Rating Breakdown
1 ceiling hit
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Wait for pullback to $94.38. BUY gates pass at $104.87, but single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk. and concentration risk — Geographic: California (85.0%) argue for a more patient entry. Engine's entry $94.38 (Ma200 Sticky) is the shallowest technical level that clears the 2:1 A.R:R minimum. Chart setup: RSI 46 mid-range, Bollinger mid-band. Fundamentals strong but target reached (-2.7% upside). Wait for pullback. Target $107.29 (+2.3%), stop $88.72 (−18.2%), A.R:R -0.5:1. Score 6.9/10, high confidence.
Take-profit target: $107.29 (-2.7% upside). Target $107.29 (+2.3%), stop $88.72 (−18.2%), A.R:R -0.5:1. Stop-loss: $88.72.
Single-region cliff: 85% exposure to California (≥60% threshold). Regional macroeconomic shock = idiosyncratic terminal risk.; Concentration risk — Geographic: California (85.0%); Analyst target reached - limited upside remaining.
Mercury General Corporation trades at a P/E of 6.1 (forward 8.7). TrendMatrix value score: 9.7/10. Verdict: Buy (Wait for Entry).
6 analysts cover MCY with a consensus score of 4.0/5. Average price target: $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.