Baldwin Insurance Group (BWIN) AI Stock Analysis

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Baldwin Insurance Group

(NASDAQ:BWIN)

70Outperform

Baldwin Insurance Group shows strong revenue growth and operational improvements, with significant positive sentiment from the latest earnings call. However, persistent net losses and high financial leverage pose risks. The technical indicators are positive, but the stock appears overvalued due to a negative P/E ratio.

Positive Factors

Organic Growth

Overall organic growth accelerated to 19%, above the 15% estimate.

Valuation

BWIN currently trades at a valuation below its historical average, suggesting potential for significant upside.

Negative Factors

Margins

The change in capacity arrangement crimps near-term margin.

Reinsurance Costs

Reinsurance costs for the QBE homebuilders' program are expected to negatively impact margins.

Baldwin Insurance Group (BWIN) vs. S&P 500 (SPY)

Market Cap

$4.91B

Dividend YieldN/A

Average Volume (3M)752.76K

Price to Earnings (P/E)―

Beta (1Y)0.91

Revenue Growth13.99%

EPS Growth75.14%

CountryUS

Employees4,052

SectorFinancial

Sector Strength86

IndustryInsurance

Share Statistics

EPS (TTM)-0.39

Shares Outstanding68,152,040

10 Day Avg. Volume796,432

30 Day Avg. Volume752,756

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.72

Price to Cash Flow (P/CF)78.50

P/FCF Ratio78.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$43.50

Price Target Upside2.45% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Baldwin Insurance Group Business Overview & Revenue Model

Company DescriptionBaldwin Insurance Group (BWIN) is a comprehensive insurance provider operating across various sectors, including personal, commercial, and specialty insurance. The company offers a wide range of products such as auto, home, life, and health insurance for individuals, as well as tailored commercial insurance solutions for businesses. BWIN is dedicated to providing innovative and reliable insurance services that meet the diverse needs of its clients.

How the Company Makes MoneyBaldwin Insurance Group makes money primarily through the collection of insurance premiums from policyholders. These premiums are the main revenue stream, as clients pay for coverage against potential risks and damages. The company also earns through investment income, utilizing the premiums collected to invest in various financial instruments, thereby generating additional returns. Furthermore, BWIN may partner with other financial institutions and reinsurers to mitigate risk and enhance its service offerings, which can contribute to its earnings through shared premiums and commissions. The company focuses on maintaining a balanced portfolio of insurance products to cater to both individual and commercial clients, ensuring a steady flow of revenue.

Baldwin Insurance Group Financial Statement Overview

Summary

Baldwin Insurance Group has exhibited strong revenue growth and operational efficiency improvements. However, net income remains negative, and the high debt-to-equity ratio indicates financial leverage risks. The company’s solid cash flow generation suggests potential for future profitability.

Income Statement

Positive

Baldwin Insurance Group has shown consistent revenue growth over the past years, with revenue increasing from $137.8M in 2019 to $1.38B in 2024. The gross profit margin has remained relatively stable, but the net income has been consistently negative, indicating profitability challenges. The EBIT and EBITDA margins have improved recently, showing operational efficiency gains.

Balance Sheet

Positive

The company has a high debt-to-equity ratio due to significant liabilities compared to stockholders' equity, which poses a risk in terms of financial leverage. However, the equity ratio is strong, indicating that a significant portion of the company's assets is financed by equity. The return on equity is negative, reflecting the impact of net losses.

Cash Flow

Positive

Operating cash flow has improved significantly over the years, indicating better cash generation from core operations. Free cash flow has also shown growth, supporting the company's ability to finance its operations and investments without relying heavily on external financing. The ratios of operating and free cash flow to net income are strong, suggesting effective cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.38B	1.22B	980.72M	567.29M	240.92M
	Gross Profit
344.19M	334.21M	174.92M	115.73M	46.64M
	EBIT
60.65M	-42.55M	86.36M	51.51M	20.17M
	EBITDA
164.62M	115.26M	88.82M	65.08M	18.75M
	Net Income Common Stockholders
-24.52M	-90.14M	-76.03M	-58.10M	-29.89M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
148.12M	116.21M	230.47M	227.74M	142.02M
	Total Assets
3.53B	3.50B	24.08M	82.54M	4.00M
	Total Debt
1.64B	1.63B	12.49M	17.50M	5.34M
	Net Debt
1.49B	1.52B	-217.98M	-210.24M	-136.68M
	Total Liabilities
2.53B	2.48B	619.00K	592.00K	455.00K
	Stockholders Equity
583.22M	560.41M	3.46B	2.88B	1.53B
Cash Flow		Free Cash Flow
61.10M	23.27M	-24.44M	34.81M	31.35M
	Operating Cash Flow
102.15M	44.64M	-2.46M	40.13M	36.82M
	Investing Cash Flow
13.30M	-21.92M	-414.36M	-678.47M	-677.79M
	Financing Cash Flow
-29.64M	-26.23M	419.55M	724.06M	711.92M

Baldwin Insurance Group Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price42.46

Price Trends

50DMA

41.62

Positive

100DMA

41.84

Positive

200DMA

43.51

Negative

Market Momentum

MACD

1.27

Negative

RSI

55.27

Neutral

STOCH

59.16

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWIN, the sentiment is Neutral. The current price of 42.46 is below the 20-day moving average (MA) of 43.47, above the 50-day MA of 41.62, and below the 200-day MA of 43.51, indicating a neutral trend. The MACD of 1.27 indicates Negative momentum. The RSI at 55.27 is Neutral, neither overbought nor oversold. The STOCH value of 59.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BWIN.

Baldwin Insurance Group Risk Analysis

Baldwin Insurance Group disclosed 60 risk factors in its most recent earnings report. Baldwin Insurance Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Baldwin Insurance Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACT	83 Outperform	$5.35B	8.10	14.29%	2.09%	4.17%	6.47%
THG	82 Outperform	$5.62B	13.33	16.03%	2.24%	4.07%	1110.92%
SIGI	75 Outperform	$5.23B	26.65	6.82%	1.69%	15.35%	-44.64%
JXN	71 Outperform	$5.19B	6.13	9.49%	4.03%	3.55%	8.91%
BWIN	70 Outperform	$4.91B	―	-4.29%	―	13.99%	75.14%
WTM	68 Neutral	$4.40B	19.02	5.22%	0.06%	2.48%	-54.02%
Sector *	64 Neutral	$13.37B	9.30	9.39%	4.85%	16.11%	-8.85%

* Financial Sector Average

Performance Comparison

BWIN

Baldwin Insurance Group

42.46

15.25

56.05%

SIGI

Selective Insurance Group

86.63

-12.75

-12.83%

THG

Hanover Insurance

156.10

31.37

25.15%

WTM

White Mountains Insurance Group

1,736.13

42.20

2.49%

ACT

Enact Holdings

35.37

6.59

22.90%

JXN

Jackson Financial Incorporation

72.04

10.07

16.25%

Baldwin Insurance Group Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 6.52% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance with significant organic growth, EBITDA margin expansion, and cash flow improvement. However, there are challenges due to California wildfires and potential impacts on reinsurance pricing. Overall, the highlights significantly outweigh the lowlights.

Highlights

Strong Organic Revenue Growth

For the fourth quarter, organic revenue grew 19% with strong double-digit organic growth across all three segments. For the year, organic revenue growth was 17%.

Adjusted EBITDA Margin Expansion

Adjusted EBITDA margin expanded 310 basis points in the fourth quarter to 19%. For the full year, it expanded 200 basis points to 22.5%.

Record New Business Productivity

Record new business productivity in IAS with sales velocity of 21.5%, a 410 basis point improvement over the prior year.

Significant Cash Flow Growth

Adjusted free cash flow for the full year grew 97% to $134.9 million. Net leverage declined to 4.1 times from 4.8 times.

Successful Segment Performance

UCTS segment had a fantastic fourth quarter with organic revenue growth of 25%, and MIS segment delivered total organic revenue growth of 19%.

Launch of Baldwin-Sponsored Reciprocal Exchange

Formal approval and a certificate of authority from the Texas Department of Insurance to form and launch a Texas domiciled reciprocal insurance exchange focused on the builder book of business.

Lowlights

California Wildfire Impact

While California property represents less than 10% of the overall premium base, the E&S homeowner's portfolio has some exposure to recent fires which may impact reinsurance pricing.

GAAP Net Loss

Recorded a GAAP net loss for the fourth quarter of $34.8 million, or GAAP diluted loss per share of $0.31. GAAP net loss for the full year was $41.1 million.

Potential Reinsurance Pricing Pressure

Uncertainty around potential impacts from the California wildfires on reinsurance pricing for the June 1 renewals in the MGA.

Company Guidance

During the Baldwin Group's Fourth Quarter 2024 earnings call, the company reported strong financial performance with a 19% organic revenue growth for the quarter and 17% for the year across all segments, driven by record new business productivity. Adjusted EBITDA margin expanded by 310 basis points in the quarter to 19%, and for the year, it grew by 200 basis points to 22.5%. The company's adjusted free cash flow grew significantly to $134.9 million, while net leverage declined from 4.8 times to 4.1 times by year-end. The IAS segment achieved a 16% organic revenue growth for the quarter, while UCTS and MIS segments reported 25% and 19% growth, respectively. The Baldwin Group also announced progress in satisfying earn-out obligations, with most expected to be completed by March, paving the way for increased capital allocation flexibility. For 2025, the company anticipates organic revenue growth at the lower end of their 10-15% long-term range, adjusted EBITDA margin expansion, and adjusted free cash flow from operations between $150 million and $175 million.

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.