Heritage Insurance's 15-min chart shows RSI Overbought and KDJ Death Cross.

Based on Heritage Insurance's 15-minute chart, the RSI has reached an overbought level and the KDJ has formed a death cross at 08/20/2025 13:00. This suggests that the stock price has risen too quickly and is no longer supported by its fundamentals. The momentum of the stock price is shifting towards the downside and there is potential for further decreases.

Based on the latest technical indicators, Heritage Insurance (NYSE: HRTG) appears to be at a critical juncture. The Relative Strength Index (RSI) has reached an overbought level, suggesting that the stock price has risen too quickly and may be unsustainable. Additionally, the KDJ indicator has formed a death cross on August 20, 2025, at 13:00, signaling a potential shift in momentum towards the downside. These indicators suggest that the stock price may not be supported by its fundamentals and could face further decreases.

Heritage Insurance has been undergoing a multi-year portfolio restructuring, leading to improved profitability and a shift towards a managed growth phase. The company has shown signs of progress, with policies in-force (PIF) decreasing by only 7,700 in Q2-2025, the smallest decline since the initiative began in June 2021. The forward guidance expects PIF to begin slowly increasing in H2-2025 and growth to accelerate in 2026, supported by a 46% YoY increase in new business production in Q2-2025.

However, the technical indicators raise concerns about the sustainability of this growth. The overbought RSI and the death cross in the KDJ suggest that the stock price may have reached a peak and could be due for a correction. This is particularly concerning given the potential disconnect between the company's strong growth potential and its near-term revenue projections. The consensus revenue estimates show much more tepid growth for Q3-2025 and Q4-2025, which directly contradicts the potential of a ramp-up in new business.

Furthermore, emerging competition in the market could pose a significant threat to Heritage Insurance's growth and margin plans. The CEO acknowledged the presence of new carriers in Florida, which could turn their focus to the voluntary market and directly compete with Heritage.

In conclusion, while Heritage Insurance has shown signs of progress and potential for growth, the current technical indicators suggest that the stock price may be overvalued and at risk of a correction. Investors should closely monitor the company's earnings and revenue projections, as well as the evolving competitive landscape, to make informed decisions about their investments.

References:
[1] https://seekingalpha.com/article/4814112-heritage-insurance-policy-growth-and-turnaround-gains-are-attached-to-major-risks