An independent two-stage DCF analysis by a frontier AI model.
The Progressive Corporation is a dominant force in the US property and casualty insurance market, demonstrating exceptional competitive momentum with double-digit revenue growth. The company leverages advanced telematics and data analytics to maintain highly accurate pricing models and remarkably strong operating margins.
Generating a massive $11.8 billion in free cash flow, Progressive possesses unparalleled financial flexibility to expand market share. This phenomenal cash generation capability, combined with a highly durable economic moat, strongly underpins an intrinsic value that is significantly higher than current market appraisals.
A 12.0% FCF growth rate is projected, closely aligning with the company's stellar 12.2% top-line revenue expansion. Progressive's highly scalable digital infrastructure and expanding market share strongly support continued double-digit cash flow growth over the next five years.
A 6.5% discount rate is utilized, reflecting Progressive's incredibly low beta (0.29) and highly resilient, defensive business model. The company's massive scale and sophisticated risk pricing significantly reduce its overall equity risk premium.
A 3.0% terminal growth rate is assumed, slightly above historical GDP growth, reflecting the company's durable competitive advantages and the structural, long-term necessity of the property and casualty insurance market.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 2.0% | 2.5% | 3.0% | 3.5% | 4.0% |
|---|---|---|---|---|---|
| 2.0% | $1,753.51 | $1,252.51 | $974.17 | $797.05 | $674.43 |
| 2.5% | $2,191.89 | $1,461.26 | $1,095.95 | $876.76 | $730.63 |
| 3.0% | $2,922.52 | $1,753.51 | $1,252.51 | $974.17 | $797.05 |
| 3.5% | $4,383.79 | $2,191.89 | $1,461.26 | $1,095.95 | $876.76 |
| 4.0% | $8,767.57 | $2,922.52 | $1,753.51 | $1,252.51 | $974.17 |
■ Undervalued vs current price ■ Overvalued vs current price
The current price is 202.68.
The most recent free cash flow is 11832375296.
The intrinsic value is calculated using a 10-year Discounted Cash Flow (DCF) model.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.