TWFG, Inc. Class A (TWFG) AI Stock Analysis

• Market Cap: $1.63B
• Dividend Yield: N/A
• Average Volume (3M): 124.66K
• Price to Earnings (P/E): 69.1
• Beta (1Y): 0.22
• Revenue Growth: 17.86%
• EPS Growth: -77.16%
• Country: US
• Employees: 293
• Sector: Financial
• Sector Strength: 72
• Industry: Insurance - Brokers
• EPS (TTM): 0.20
• Shares Outstanding: 14,904,083
• 10 Day Avg. Volume: 232,337
• 30 Day Avg. Volume: 124,660
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 9.74
• Enterprise Value/Gross Profit: 17.05
• Enterprise Value/Ebitda: 42.38
• 1Y Price Target: $36.00
• Price Target Upside: 27.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 55 Neutral
• Price Target: $32.00 ▲(13.27% Upside)

TWFG's overall stock score is primarily influenced by its strong financial performance, which provides a solid foundation. However, the bearish technical indicators and high valuation relative to earnings weigh down the score. The recent strategic acquisitions and leadership appointment are positive but do not directly impact the score due to the exclusion of corporate events in the weighted calculation.

Positive Factors

Financial Performance

Adjusted EBITDA and EPS beat estimates, driven by a mix shift toward higher-margin corporate branches.

Growth Potential

A solid balance sheet and strong free cash flow generation create upside potential through mergers and acquisitions.

Market Position

The company experiences market share gains enabled by its scale and differentiated technology in the fragmented personal lines market.

Negative Factors

Earnings Performance

Total revenue of $60.3 million came in below consensus of $62.7 million, primarily driven by weaker commission income.

Guidance Revision

Organic growth guidance for 2025 was lowered due to continued rate moderation.

Revenue Performance

Second-quarter revenue and organic growth missed expectations.

TWFG, Inc. Class A Business Overview & Revenue Model

Company Description

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers' compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.

How the Company Makes Money

TWFG generates revenue primarily through the sale of insurance products, including premiums collected from policyholders. The company earns significant income from underwriting insurance policies, where it assesses risk and sets premiums accordingly. Additionally, TWFG benefits from investment income derived from the premiums it holds prior to claims being paid out. The company may also engage in partnerships with other financial institutions and service providers to enhance its product offerings, which can lead to additional revenue streams through collaborative service initiatives or cross-selling opportunities. Overall, TWFG's revenue model is built on a combination of policy premiums, underwriting profits, and investment returns.

TWFG, Inc. Class A Financial Statement Overview

Summary

TWFG exhibits strong financial performance with robust revenue growth and operational efficiency. The balance sheet is solid with low leverage, ensuring financial stability. Cash flow generation is impressive, supporting future growth opportunities. However, the decline in net profit margin and return on equity suggests areas for improvement in profitability.

Income Statement

TWFG has shown a solid revenue growth of 16.01% from 2023 to 2024, indicating a positive trajectory. The gross profit margin improved to 24.03% in 2024 from 18.88% in 2023, reflecting better cost management. However, the net profit margin decreased to 1.42% in 2024 from 2.47% in 2023, suggesting challenges in maintaining profitability despite higher revenues. EBIT and EBITDA margins are strong at 14.41% and 22.88% respectively, highlighting operational efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.14 in 2024, indicating low financial leverage and reduced risk. The equity ratio improved to 22.84% in 2024 from 26.89% in 2023, showing a solid equity base. Return on equity decreased to 3.71% in 2024 from 13.31% in 2023, which may suggest lower profitability relative to shareholders' equity. Overall, the company maintains a strong financial position with ample cash reserves.

Cash Flow

TWFG's cash flow is strong, with a significant increase in free cash flow by 156.99% from 2023 to 2024, driven by improved operating cash flow and reduced capital expenditures. The operating cash flow to net income ratio is high at 14.75, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is also strong at 13.58, reflecting effective cash management. The company has demonstrated excellent cash flow stability and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	207.28M	193.72M	166.99M	147.78M
Gross Profit	118.36M	46.57M	36.17M	30.63M
EBITDA	47.63M	44.33M	26.46M	27.05M
Net Income	18.60M	2.75M	4.13M	20.61M
Balance Sheet
Total Assets	342.85M	323.43M	115.44M	114.15M
Cash, Cash Equivalents and Short-Term Investments	159.83M	195.77M	39.30M	22.33M
Total Debt	6.30M	10.30M	51.76M	13.31M
Total Liabilities	53.88M	48.14M	84.39M	56.37M
Stockholders Equity	78.67M	73.88M	31.05M	57.79M
Cash Flow
Free Cash Flow	44.76M	37.28M	14.51M	13.48M
Operating Cash Flow	48.59M	40.48M	30.15M	25.75M
Investing Cash Flow	-50.54M	-25.05M	-14.65M	-14.50M
Financing Cash Flow	136.44M	143.43M	-9.70M	-15.26M

TWFG, Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWFG, the sentiment is Negative. The current price of 28.25 is below the 20-day moving average (MA) of 28.72, below the 50-day MA of 31.93, and below the 200-day MA of 31.59, indicating a bearish trend. The MACD of -1.09 indicates Negative momentum. The RSI at 42.95 is Neutral, neither overbought nor oversold. The STOCH value of 71.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TWFG.

TWFG, Inc. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$17.49B	11.70	10.34%	3.85%	9.75%	0.63%
TWFG	55 Neutral	$1.63B	69.12	8.26%	―	17.86%	-77.16%
ZBAO	54 Neutral	$32.47M	10.91	48.31%	―	80.80%	―
HUIZ	52 Neutral	$25.02M	11.44	-3.92%	―	0.48%	-127.19%
EHTH	48 Neutral	$106.34M	―	4.45%	―	16.19%	89.75%
RELI	45 Neutral	$4.20M	―	-223.86%	―	1.07%	96.67%
TIRX	41 Neutral	$86.48M	―	-12.03%	―	158.74%	14.86%

TWFG, Inc. Class A Corporate Events

TWFG, Inc. Holds Annual Stockholders Meeting

On May 28, 2025, TWFG, Inc. held its Annual Meeting of Stockholders, where a quorum was present. During the meeting, several directors were elected to the Board, including Richard F. Bunch III and Michael Doak, among others. Additionally, the stockholders ratified the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2025.