Recent News
On July 29, 2025 Mercury General Corporation announced its second-quarter results and declared a quarterly dividend. In early August 2025 several sell- and buy-side analysts published revised targets and ratings for the stock; an August analyst note reiterated constructive views. On September 24, 2025 a public filing showed a new modest institutional stake in the company. These items reflect corporate reporting cadence, dividend action, and renewed institutional interest over the past 13 weeks.
Technical Analysis
ADX at 39.08 indicates a strong trend strength supporting continuation of the current directional bias; the value sits just inside the band that denotes a strong trend.
DI+ shows a dip & reversal while DI- shows a peak & reversal, which together indicate bullish directional pressure as DI+ regained momentum and DI- declined.
MACD at 1.84 has completed a dip & reversal and sits above its signal line at 1.75, producing a bullish momentum confirmation that aligns with ADX strength and supports near-term upside potential.
MRO at -0.19 registers negative, implying price sits below the model target and therefore carries upward potential toward valuation-implied levels.
RSI at 65.67 with a dip & reversal indicates renewed upward momentum while remaining short of classical overbought thresholds, consistent with continuing buying interest rather than exhaustion.
Price sits above key averages: the close at $81.84 exceeds the 20-day average ($79.10), 50-day average ($74.49) and 200-day average ($62.62), reinforcing multi-horizon bullish context; the 12-day EMA (price12dayEMA trending dip & reversal) aligns with recent momentum. SuperTrend lower support at $78.45 and Ichimoku components (Kijun-sen $78.08; Senkou A $70.36) provide nearby technical support bands while Bollinger upper bands (1x $80.93, 2x $82.75) place the current price near the short-term upper envelope, indicating strength but limited immediate room within the band structure.
Fundamental Analysis
Profitability and cash flow underpin the valuation case. EBIT equals $213,943,000 and the EBIT margin registers 14.48%. That EBIT margin sits below the industry peer mean (19.80%) and median (18.42%) but remains well above the peer low. Net income from continuing operations totals $166,472,000.
EPS reported $2.67 versus an estimate of $1.30, producing an EPS beat of $1.37 and an EPS surprise of 105.39% (EPS surprise ratio 1.05385 expressed as 105.39%). Forward EPS sits at $1.625 with a forward P/E of 37.41; the reported trailing P/E equals 24.00.
Balance sheet and cash metrics show liquidity and free cash strength: cash and short-term investments total $1,404,018,000 and free cash flow equals $357,235,000 with a free cash flow yield of 9.26%, above the industry peer mean free cash flow yield (2.91%). Operating cash flow reached $371,605,000 and free cash to net income measures 2.15x, supporting the dividend and capital allocation capacity.
Leverage remains modest. Total debt equals $590,181,000, debt to assets registers 6.50% and debt to equity sits at 29.97%; debt-to-assets lies slightly above the industry peer mean (5.46%) while interest coverage remains robust at 29.73x. Return on equity registers 8.45% and return on assets 1.84%; both exceed or align with industry peer medians for return on assets and equity where provided.
Top-line dynamics show revenue growth at 6.03% and YoY revenue growth reported as 148.43% in the supplied data; quarter-over-quarter revenue growth equals 1.97%. Retained earnings and invested capital remain substantial. Dividend metrics: dividend rate $0.3175 per share with a dividend payout ratio of 10.56% and dividend coverage of 9.47x.
Valuation summary: WMDST values the stock as under-valued. Key drivers for that view include a 9.26% free cash flow yield, sizable cash balances, low leverage relative to capitalization, and a substantial EPS beat in the reported period—facts that support a valuation gap versus current market pricing.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-06-30 |
| REPORT DATE: | 2025-07-29 |
| NEXT REPORT DATE: | 2025-11-04 |
| CASH FLOW | Begin Period Cash Flow | $ 1.3 B |
| Operating Cash Flow | $ 371.6 M | |
| Capital Expenditures | $ -14.37 M | |
| Change In Working Capital | $ 259.2 M | |
| Dividends Paid | $ -17.59 M | |
| Cash Flow Delta | $ -162.54 M | |
| End Period Cash Flow | $ 1.1 B | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 1.5 B | |
| Forward Revenue | $ 199.8 M | |
| COSTS | ||
| Cost Of Revenue | — | |
| Depreciation | $ 17.7 M | |
| Depreciation and Amortization | $ 17.7 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 1.3 B | |
| PROFITABILITY | ||
| Gross Profit | — | |
| EBITDA | — | |
| EBIT | $ 213.9 M | |
| Operating Income | — | |
| Interest Income | — | |
| Interest Expense | $ 7.2 M | |
| Net Interest Income | $ -7.20 M | |
| Income Before Tax | $ 206.7 M | |
| Tax Provision | $ 40.3 M | |
| Tax Rate | 19.5 % | |
| Net Income | $ 166.5 M | |
| Net Income From Continuing Operations | $ 166.5 M | |
| EARNINGS | ||
| EPS Estimate | $ 1.30 | |
| EPS Actual | $ 2.67 | |
| EPS Difference | $ 1.37 | |
| EPS Surprise | 105.385 % | |
| Forward EPS | $ 1.62 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 9.1 B | |
| Intangible Assets | $ 50.0 M | |
| Net Tangible Assets | $ 1.9 B | |
| Total Current Assets | — | |
| Cash and Short-Term Investments | $ 1.4 B | |
| Cash | $ 1.1 B | |
| Net Receivables | $ 1.1 B | |
| Inventory | — | |
| Long-Term Investments | — | |
| LIABILITIES | ||
| Accounts Payable | $ 468.3 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | — | |
| Net Debt | — | |
| Total Debt | $ 590.2 M | |
| Total Liabilities | $ 7.1 B | |
| EQUITY | ||
| Total Equity | $ 2.0 B | |
| Retained Earnings | $ 1.9 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 35.56 | |
| Shares Outstanding | 55.389 M | |
| Revenue Per-Share | $ 26.68 | |
| VALUATION | Market Capitalization | $ 3.9 B |
| Enterprise Value | $ 3.0 B | |
| Enterprise Multiple | — | |
| Enterprise Multiple QoQ | — | |
| Enterprise Multiple YoY | — | |
| Enterprise Multiple IPRWA | — | |
| EV/R | 2.06 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 4.612 | |
| Asset To Liability | 1.277 | |
| Debt To Capital | 0.231 | |
| Debt To Assets | 0.065 | |
| Debt To Assets QoQ | -0.93 % | |
| Debt To Assets YoY | 151.082 % | |
| Debt To Assets IPRWA | high: 0.141 MCY: 0.065 median: 0.06 mean: 0.055 low: 0.001 |
|
| Debt To Equity | 0.3 | |
| Debt To Equity QoQ | -7.856 % | |
| Debt To Equity YoY | 147.081 % | |
| Debt To Equity IPRWA | high: 0.818 MCY: 0.3 mean: 0.232 median: 0.223 low: 0.003 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 1.959 | |
| Price To Book QoQ | 16.577 % | |
| Price To Book YoY | 9.727 % | |
| Price To Book IPRWA | high: 8.591 mean: 3.034 median: 2.405 MCY: 1.959 low: 0.349 |
|
| Price To Earnings (P/E) | 24.0 | |
| Price To Earnings QoQ | -199.491 % | |
| Price To Earnings YoY | -50.803 % | |
| Price To Earnings IPRWA | high: 107.296 median: 54.538 mean: 51.822 MCY: 24.0 low: -63.287 |
|
| PE/G Ratio | -0.111 | |
| Price To Sales (P/S) | 2.611 | |
| Price To Sales QoQ | 18.942 % | |
| Price To Sales YoY | 15.721 % | |
| Price To Sales IPRWA | high: 22.821 median: 6.744 mean: 6.701 MCY: 2.611 low: 0.913 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 37.411 | |
| Forward PE/G | -0.173 | |
| Forward P/S | 19.316 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | -42.867 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.163 | |
| Asset Turnover Ratio QoQ | 1.505 % | |
| Asset Turnover Ratio YoY | -5.429 % | |
| Asset Turnover Ratio IPRWA | high: 0.263 MCY: 0.163 mean: 0.118 median: 0.088 low: 0.007 |
|
| Receivables Turnover | 1.177 | |
| Receivables Turnover Ratio QoQ | -11.78 % | |
| Receivables Turnover Ratio YoY | -34.949 % | |
| Receivables Turnover Ratio IPRWA | high: 1.664 MCY: 1.177 mean: 0.691 median: 0.57 low: 0.075 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 77.495 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | — | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | — | |
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | — | |
| CapEx To Revenue | -0.01 | |
| CapEx To Depreciation | -0.812 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 2.5 B | |
| Net Invested Capital | $ 2.5 B | |
| Invested Capital | $ 2.5 B | |
| Net Tangible Assets | $ 1.9 B | |
| Net Working Capital | — | |
| LIQUIDITY | ||
| Cash Ratio | — | |
| Current Ratio | — | |
| Current Ratio QoQ | — | |
| Current Ratio YoY | — | |
| Current Ratio IPRWA | — | |
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | — | |
| Cost Of Debt | 0.98 % | |
| Interest Coverage Ratio | 29.735 | |
| Interest Coverage Ratio QoQ | -258.219 % | |
| Interest Coverage Ratio YoY | 179.751 % | |
| Interest Coverage Ratio IPRWA | high: 116.937 mean: 37.387 MCY: 29.735 median: 28.03 low: -3.125 |
|
| Operating Cash Flow Ratio | — | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | — | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | 9.466 | |
| Dividend Payout Ratio | 0.106 | |
| Dividend Rate | $ 0.32 | |
| Dividend Yield | 0.005 | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 0.613 % | |
| Revenue Growth | 6.027 % | |
| Revenue Growth QoQ | 197.189 % | |
| Revenue Growth YoY | 148.434 % | |
| Revenue Growth IPRWA | high: 26.578 % mean: 6.356 % median: 6.053 % MCY: 6.027 % low: -14.462 % |
|
| Earnings Growth | -216.594 % | |
| Earnings Growth QoQ | 18.764 % | |
| Earnings Growth YoY | -644.973 % | |
| Earnings Growth IPRWA | high: 69.231 % mean: 23.534 % median: 4.946 % low: -133.505 % MCY: -216.594 % |
|
| MARGINS | ||
| Gross Margin | — | |
| Gross Margin QoQ | — | |
| Gross Margin YoY | — | |
| Gross Margin IPRWA | — | |
| EBIT Margin | 14.476 % | |
| EBIT Margin QoQ | -249.345 % | |
| EBIT Margin YoY | 127.897 % | |
| EBIT Margin IPRWA | high: 56.115 % mean: 19.798 % median: 18.418 % MCY: 14.476 % low: -6.456 % |
|
| Return On Sales (ROS) | — | |
| Return On Sales QoQ | — | |
| Return On Sales YoY | — | |
| Return On Sales IPRWA | — | |
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 357.2 M | |
| Free Cash Flow Yield | 9.258 % | |
| Free Cash Flow Yield QoQ | -445.964 % | |
| Free Cash Flow Yield YoY | 2.298 % | |
| Free Cash Flow Yield IPRWA | high: 9.624 % MCY: 9.258 % mean: 2.907 % median: 2.815 % low: -2.404 % |
|
| Free Cash Growth | -536.334 % | |
| Free Cash Growth QoQ | 298.193 % | |
| Free Cash Growth YoY | -1262.91 % | |
| Free Cash Growth IPRWA | high: 430.936 % mean: 6.019 % median: -22.541 % low: -233.437 % MCY: -536.334 % |
|
| Free Cash To Net Income | 2.146 | |
| Cash Flow Margin | 47.931 % | |
| Cash Flow To Earnings | 4.255 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | 1.838 % | |
| Return On Assets QoQ | -247.04 % | |
| Return On Assets YoY | 122.249 % | |
| Return On Assets IPRWA | high: 3.613 % MCY: 1.838 % mean: 1.708 % median: 1.607 % low: -2.104 % |
|
| Return On Capital Employed (ROCE) | — | |
| Return On Equity (ROE) | 0.085 | |
| Return On Equity QoQ | -242.067 % | |
| Return On Equity YoY | 122.799 % | |
| Return On Equity IPRWA | high: 0.129 MCY: 0.085 mean: 0.066 median: 0.056 low: -0.085 |
|
| DuPont ROE | 8.785 % | |
| Return On Invested Capital (ROIC) | 6.772 % | |
| Return On Invested Capital QoQ | -257.672 % | |
| Return On Invested Capital YoY | -154.644 % | |
| Return On Invested Capital IPRWA | high: 11.32 % MCY: 6.772 % mean: 5.541 % median: 4.929 % low: -2.574 % |
|