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Brown & Brown (BRO)
:BRO
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Brown & Brown
(NYSE:BRO)77Outperform
Positive Factors
Earnings
Organic revenue growth of 13.8% came in ahead of consensus at 9.4%, driven by the Programs segment with new business and exposure unit expansion.
Negative Factors
Mergers and Acquisitions
BRO closed four deals in the quarter, adding $7.5m of revenue, which is the lowest quarter for M&A in a while.
Operating Expenses
The company had other operating expenses of $212 million, or 17.9% of revenue, vs consensus expectations of $179 million.
Brown & Brown (BRO) vs. S&P 500 (SPY)
Market Cap
$34.07B
Dividend Yield0.47%
Average Volume (3M)1.63M
Price to Earnings (P/E)34.5
Beta (1Y)0.54
Revenue Growth12.89%
EPS Growth13.50%
CountryUS
Employees17,403
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)3.46
Shares Outstanding285,931,980
10 Day Avg. Volume1,728,386
30 Day Avg. Volume1,632,148
Financial Highlights & Ratios
PEG Ratio2.56
Price to Book (P/B)N/A
Price to Sales (P/S)7.17
Price to Cash Flow (P/CF)23.70
P/FCF Ratio23.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$116.40Price Target Upside-2.32% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Brown & Brown Business Overview & Revenue Model
Company DescriptionBrown & Brown, Inc. (BRO) is a leading insurance brokerage firm that operates primarily in the United States, offering a wide range of insurance products and services. The company is divided into four main segments: Retail, National Programs, Wholesale Brokerage, and Services. Through its diverse portfolio, Brown & Brown provides risk management solutions, insurance brokerage, consulting, and administration services to individuals and businesses across various industries.
How the Company Makes MoneyBrown & Brown makes money through commissions and fees derived from the sale of insurance products and services. The company's revenue model is primarily based on earning commissions from insurance carriers for policies sold through its brokerage services. In addition to commissions, Brown & Brown generates revenue by charging clients fees for consulting, risk management, and administrative services. The company's diverse operations across its four segments allow it to cater to different market needs, enhancing its ability to generate consistent revenue streams. Strategic acquisitions and partnerships with various insurance carriers further bolster its market presence and financial performance.
Brown & Brown Financial Statement Overview
Summary
Brown & Brown shows strong financial health with notable revenue growth and profit margins. The balance sheet is robust with decreasing debt ratios, and cash flow is solid, despite some volatility in investment activities. These factors indicate a well-managed company poised for growth.Income Statement
Brown & Brown has demonstrated robust revenue growth with a 14.3% increase in 2024 and consistent gross profit margins over the years. Despite the absence of EBIT and EBITDA data for 2024, the strong net profit margin of 20.7% and continuous revenue growth indicate solid profitability in the insurance sector.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a decreasing debt-to-equity ratio over the years, reaching 0.06 in 2024, highlighting strong financial management. The equity ratio remained stable at around 36.5%, showcasing financial stability and a solid capital structure.78
Positive
Cash Flow
Brown & Brown's operating cash flow has improved significantly, with a strong free cash flow of $1.17 billion in 2024. The free cash flow to net income ratio is noteworthy, reflecting efficient cash generation. However, the fluctuating investing cash flow suggests potential volatility in future investments.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.80B | 4.20B | 3.57B | 3.05B | 2.61B | Gross Profit |
| 2.40B | 2.02B | 1.76B | 1.41B | 1.17B | EBIT |
| 0.00 | 0.00 | 973.90M | 857.50M | 673.40M | EBITDA |
| 1.73B | 1.55B | 1.16B | 1.01B | 808.20M | Net Income Common Stockholders |
| 993.00M | 870.50M | 671.80M | 587.10M | 480.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 685.00M | 711.30M | 662.00M | 900.00M | 835.70M | Total Assets |
| 17.61B | 14.88B | 13.97B | 9.80B | 8.97B | Total Debt |
| 414.00M | 4.02B | 4.14B | 2.20B | 2.27B | Net Debt |
| -261.00M | 3.32B | 3.49B | 1.32B | 1.45B | Total Liabilities |
| 11.18B | 9.30B | 9.37B | 5.60B | 5.21B | Stockholders Equity |
| 6.44B | 5.58B | 4.61B | 4.20B | 3.75B |
| Cash Flow | Free Cash Flow | |||
| 1.17B | 940.60M | 828.80M | 903.00M | 650.90M | Operating Cash Flow |
| 1.17B | 1.01B | 881.40M | 948.00M | 721.60M | Investing Cash Flow |
| -898.00M | -587.00M | -1.91B | -396.70M | -759.10M | Financing Cash Flow |
| -64.00M | -186.70M | 1.73B | -349.30M | 346.40M |
Brown & Brown Technical Analysis
Positive
119.17
Price Trends
106.87
Positive
107.21
Positive
101.83
Positive
Market Momentum
3.30
Negative
79.24
Negative
92.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRO, the sentiment is Positive. The current price of 119.17 is above the 20-day moving average (MA) of 112.04, above the 50-day MA of 106.87, and above the 200-day MA of 101.83, indicating a bullish trend. The MACD of 3.30 indicates Negative momentum. The RSI at 79.24 is Negative, neither overbought nor oversold. The STOCH value of 92.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BRO.
Brown & Brown Risk Analysis
Brown & Brown disclosed 37 risk factors in its most recent earnings report. Brown & Brown reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brown & Brown Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $85.90B | 51.88 | 7.25% | 0.70% | 15.21% | 46.99% | |
79 Outperform | $33.38B | 11.30 | 18.92% | 1.61% | 8.19% | 29.77% | |
77 Outperform | $34.07B | 34.50 | 15.43% | 0.47% | 12.89% | 13.50% | |
76 Outperform | $116.81B | 29.06 | 30.00% | 1.32% | 7.60% | 8.66% | |
75 Outperform | $19.94B | 37.57 | 30.21% | 1.15% | 16.38% | 34.58% | |
73 Outperform | $88.37B | 32.76 | 43.36% | 0.66% | 17.51% | 1.31% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
BRO
Brown & Brown
119.17
35.55
42.51%
AON
Aon
404.68
92.03
29.44%
AJG
Arthur J Gallagher & Co
337.27
93.49
38.35%
ERIE
Erie Indemnity Company
440.44
37.04
9.18%
HIG
Hartford Financial
116.98
22.78
24.18%
MMC
Marsh & Mclennan Companies
236.77
37.81
19.00%
Brown & Brown Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: 10.66% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance for Brown & Brown with significant revenue growth, margin expansion, and successful M&A activities. However, there were challenges in specific segments such as the Retail segment growth and declining CAT property rates, which impacted the overall results. Despite these challenges, the overall sentiment remains positive due to the strong financial performance and optimistic outlook for 2025.Highlights
Strong Revenue Growth
Brown & Brown delivered nearly $5 billion in revenue for the fiscal year 2024, with total revenue growth of 13% and organic growth over 10%.
Margin Expansion
Adjusted EBITDAC margin improved by more than 100 basis points for the year, reaching over 35%.
Earnings Per Share Increase
Adjusted earnings per share grew 24.5% in Q4 to $0.86 and 18% for the full year to $3.84.
Programs Segment Performance
The Programs segment delivered 38.6% organic growth in Q4 and 22.4% for the full year.
Successful M&A Activity
Completed 10 acquisitions in Q4 with estimated annual revenues of $137 million and $174 million for the year.
Lowlights
Property Rate Decline
CAT property rates decreased by 10% to 20%, with more customers seeing decreases closer to or in excess of 20%.
Retail Segment Growth Challenges
Retail segment experienced organic growth of only 4.4% in Q4, impacted by timing of new business and non-recurring revenue.
Wholesale Brokerage Margin Decrease
Wholesale Brokerage segment's EBITDAC margin decreased by 140 basis points to 25.7% due to one-time costs.
Company Guidance
During the fourth quarter earnings call, Brown & Brown reported impressive financial results, highlighting various key metrics. The company achieved revenues of $1.4 billion for the fourth quarter, representing a 15% increase in total and 14% organic growth compared to Q4 2023. The adjusted EBITDAC margin improved by nearly 200 basis points to 33%, while adjusted earnings per share surged 24.5% to $0.86. For the full fiscal year 2024, Brown & Brown delivered revenues of $4.8 billion, marking a 13% total growth and over 10% organic growth. The company also reported an adjusted EBITDAC margin exceeding 35%, with an increase of more than 100 basis points, and adjusted diluted net income per share rose over 18% to $3.84. Additionally, Brown & Brown completed 10 acquisitions in the fourth quarter, contributing approximately $137 million in annual revenue, with the largest acquisition being Quintes in the Netherlands. The company generated nearly $1.2 billion in cash from operations for the year and maintained a strong balance sheet, positioning itself for continued growth in 2025.Brown & Brown Corporate Events
Executive/Board Changes
Brown & Brown Appoints Stephen P. Hearn as COO
Neutral
Feb 25, 2025
Brown & Brown, Inc. announced the appointment of Stephen P. Hearn as Executive Vice President and Chief Operating Officer, effective March 3, 2025. Hearn, who resigned from the company’s board on February 23, 2025, brings extensive experience from his previous roles at The Ardonagh Group and other notable firms. His compensation package includes a significant annual salary, cash incentives, and long-term equity incentives. Additionally, the company has set performance-based cash incentives for 2025 for its executive officers, focusing on organic revenue growth, adjusted EBITDAC margin, and personal objectives.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.