Is Horace Mann Educators (HMN) Price Justified After 5-Year 36.7% Share Return?

• If you are wondering whether Horace Mann Educators at around US$44.92 still offers value, an important question is how its current price compares with what the business may be worth.
• The stock has returned 4.7% over the last 7 days, while the 1 year return sits at 21.7% and the 3 year return at 38.6%. A 0.6% decline year to date may suggest that expectations and risk perceptions are changing.
• Recent coverage has focused on Horace Mann Educators as an insurer serving the education community, with attention on how its business profile fits into the broader insurance sector and what that might mean for investor sentiment. Commentary has also highlighted how the share price has moved over 5 years, with a 36.7% return providing additional context for anyone reviewing the stock today.
• Our valuation work gives Horace Mann Educators a 3 out of 6 valuation score. The next sections walk through the main valuation methods behind that figure, followed by a way to think about valuation that can be even more informative than the numbers alone.

Horace Mann Educators delivered 21.7% returns over the last year. See how this stacks up to the rest of the Insurance industry.

Approach 1: Horace Mann Educators Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to earn on its equity above, or below, the return that investors require. It focuses on whether each dollar of book value is likely to generate value or erode it over time.

For Horace Mann Educators, book value is $35.31 per share and stable EPS is estimated at $1.88 per share, based on the median return on equity from the past 5 years. The cost of equity is put at $2.06 per share, which implies an excess return of $0.17 per share in the negative. The average return on equity used in this model is 6.37%, with a stable book value input of $29.57 per share.

Using these inputs, the Excess Returns model arrives at an estimated intrinsic value of $24.88 per share. At a current share price of about $44.92, this indicates the stock is around 80.5% overvalued according to this measure.

Result: OVERVALUED

Our Excess Returns analysis suggests Horace Mann Educators may be overvalued by 80.5%. Discover 867 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Horace Mann Educators.

Approach 2: Horace Mann Educators Price vs Earnings

For a profitable company, the P/E ratio is a straightforward way to think about value, because it links what you pay for each share directly to the earnings that support that share price. A higher or lower P/E often reflects what the market is willing to pay based on its view of future growth and the risks around those earnings.

In general, stronger growth and lower perceived risk tend to justify a higher P/E, while slower growth or higher risk usually point to a lower, more cautious multiple. Horace Mann Educators currently trades on a P/E of 11.14x, compared with an Insurance industry average of about 13.29x and a peer group average of 25.48x. That alone might make the stock look cheaper than many peers, but simple comparisons can miss company specific factors.

Simply Wall St’s Fair Ratio for Horace Mann Educators is 13.72x. This is a proprietary view of what a reasonable P/E could be for the company, based on elements such as earnings growth characteristics, profit margins, industry, market cap and risk profile. Because it blends these inputs, the Fair Ratio can give a more tailored reference point than raw industry or peer averages. With the current P/E below the 13.72x Fair Ratio, Horace Mann Educators screens as undervalued on this metric.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Horace Mann Educators Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives.

A Narrative is simply your story about a company, written in numbers, where you set your own view of fair value along with expectations for future revenue, earnings and margins, instead of relying only on headline ratios like the P/E.

On Simply Wall St’s Community page, Narratives link that story to a full financial forecast and then to a fair value. They show you in a clear way how that fair value compares with today’s share price to help you decide whether you see Horace Mann Educators as attractively priced or not, and then update automatically when fresh information such as news or earnings is released.

For example, some Horace Mann Educators Narratives on the platform assume very conservative growth and a lower fair value, while others assume stronger profitability and a higher fair value. This shows how two investors looking at the same stock can reasonably reach different views on what the shares are worth today.

Do you think there's more to the story for Horace Mann Educators? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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