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Erie Indemnity (ERIE) has drawn fresh attention after a mixed performance picture, with a month gain of about 2% but a 1 year total return decline of roughly 29%.
With shares recently closing near $287.71 and longer term total returns over 3 and 5 years still positive, many investors are reassessing how the company’s fee based insurance services model fits into their portfolios.
See our latest analysis for Erie Indemnity.
The recent 1 month share price return of 2.06% and year to date share price return of 3.56% indicate only a modest recovery in momentum, especially when set against the 1 year total shareholder return decline of about 29%.
If this has you reassessing where you look for ideas beyond insurance, it could be a good moment to broaden your search with our list of 22 top founder-led companies.
With a 29% 1 year total return decline, but 3 and 5 year returns still positive, plus ongoing revenue and net income growth, is ERIE quietly cheap today or is the market already factoring in its future potential?
On a simple P/E yardstick, Erie Indemnity’s current multiple of 23.2x sits well above several benchmarks, even though the last close price is $287.71 and the 1 year total return is lower.
The P/E ratio tells you how much investors are currently paying for each dollar of earnings. This measure is especially watched for fee based insurance and service businesses like ERIE that have established profit streams.
Here, the company is described as expensive on three fronts. Its 23.2x P/E is higher than the estimated fair P/E of 15x, above the US Insurance industry average of 12.9x, and above the peer average of 14.3x. That indicates the share price reflects stronger earnings expectations than both sector peers and what the SWS fair ratio model shows the market could move toward if sentiment or growth expectations cool.
In other words, the current valuation sits well above both industry and model based benchmarks. Investors considering ERIE today are paying a premium versus the sector, while the fair ratio highlights a lower level the multiple could potentially gravitate toward over time.
Explore the SWS fair ratio for Erie Indemnity
Result: Price-to-Earnings of 23.2x (OVERVALUED)
However, you still face the risk that a rich 23.2x P/E compresses if sentiment cools or if the broader insurance space falls out of favor.
Find out about the key risks to this Erie Indemnity narrative.
While the 23.2x P/E suggests ERIE is expensive, our DCF model also points to a full price. The current $287.71 share price is above an estimated future cash flow value of $228.07.
That gap implies limited room for error if growth or margins fall short. How comfortable are you paying this price?
Look into how the SWS DCF model arrives at its fair value.
ERIE Discounted Cash Flow as at Feb 2026
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Erie Indemnity for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
If the story here does not quite match your view, or you prefer to work directly from the numbers yourself, you can build a version that fits your own research in just a few minutes, then Do it your way.
A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Erie Indemnity.
If ERIE has sharpened your thinking, do not stop here. Use the Simply Wall St screener to spot other opportunities that could suit your style.
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.
Companies discussed in this article include ERIE.
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