Exzeo Group

XZO · investment memo

Valuation margin
demonstrated − required CAGR

-5.7%

Required CAGR

11.7%

Demonstrated

6.0%

Terminal margin

44.5%

Exit multiple

11.0x

Company state

Terminal margin basis

BUILT from the company's own opex bridge on primary EDGAR filings (60.0 gross - 4.2 R&D - 10.9 SG&A - 0.4 other D&A). Stored elsewhere in this file as the FRACTION 0.445; this key carries the PERCENT the contract requires.

Risk & exit

Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.

Risk trigger
16% below the memo price

$13.78

Forward E[R]
vs a 0% floor

+0.3%

A daily close below $13.78 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.

Thesis-invalidation conditions

Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.

Third-party revenue crossing ~15% of total and growing sequentially for three consecutive quarters. It is 4.0% today, from 0.0% a year ago. This is the one thing that would convert the name from a transfer-price conduit into a business.
Q2 2026 revenue at or above the Street's ~$60m, confirming the step-up the filings do not yet support, and a return to double-digit YoY.
Q2 2026
The CORE MGA Agreement lapsing on 2026-11-21 without renewal (90 days' notice ⇒ decision by ~2026-08-23).
Q2 2026 revenue at or below $56m — a sixth flat quarter, and a miss against a consensus that requires $60m.
Q2 2026
Third-party revenue flat or down sequentially from Q1-26's $2,211k.
HCI reducing its 82.5% stake into the open market — a 13.5% float cannot absorb it.

Impairment case

Named cause: HCI Group re-prices or terminates the intercompany agreements, which it controls both sides of, and which are cancellable without cause on 120–180 days' notice. This is not a speculative governance worry. The mechanism is specific: - HCI's economics changed at the IPO. It now retains 82.5% of Exzeo's profit but bears 100% of the fee it pays. Every intercompany dollar leaks 17.5% to Exzeo minorities. - TTIC pays 21.5% + 3.5% of premium. HCPCI pays 8.5%. HCI has already demonstrated it will price the same services 3x apart between its own subsidiaries. Moving TTIC toward the HCPCI r

Documents

XZO Catalyst Calendar XZO Financial Model Notes XZO Research XZO Trade Construction XZO Valuation

Generated from each name's analysis.json. Figures are research output, not investment advice. Gaps are shown as “—” rather than filled: a missing input is recorded as indeterminate, never estimated.