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TWFG, Inc. Class A (TWFG)
NASDAQ:TWFG
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TWFG, Inc. Class A
(NASDAQ:TWFG)
Select Model
Select Model
Rating:72Outperform
Price Target:
$30.00
▲(16.87% Upside)
TWFG, Inc. demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving its stock score. The company's robust revenue growth, improved margins, and strategic M&A activities highlight its growth potential. However, the high P/E ratio and technical indicators suggest caution, as the stock may be overvalued and facing resistance in the longer term.
Positive Factors
Revenue Growth
TWFG's strong revenue growth indicates effective market expansion and product adoption, supporting long-term business sustainability.
Margin Expansion
Improved margins reflect efficient cost management and operational effectiveness, enhancing profitability and competitive positioning.
Cash Position
A strong cash position provides TWFG with flexibility for strategic investments and resilience against market fluctuations.
Negative Factors
Increased Expenses
Rising expenses can pressure margins and profitability, potentially limiting reinvestment opportunities and affecting long-term growth.
Softening Market Conditions
Softening market conditions could lead to reduced pricing power and lower revenue growth, challenging TWFG's market strategy.
Challenges in California
Persistent challenges in key markets like California may hinder growth and require strategic adjustments to maintain market share.
TWFG, Inc. Class A (TWFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.44B
Dividend YieldN/A
Average Volume (3M)87.68K
Price to Earnings (P/E)58.0
Beta (1Y)0.20
Revenue Growth18.54%
EPS Growth-67.02%
CountryUS
Employees293
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)0.23
Shares Outstanding15,028,681
10 Day Avg. Volume73,283
30 Day Avg. Volume87,679
Financial Highlights & Ratios
PEG Ratio-4.28
Price to Book (P/B)6.16
Price to Sales (P/S)2.35
P/FCF Ratio12.21
Enterprise Value/Market Cap0.33
Enterprise Value/Revenue2.19
Enterprise Value/Gross Profit8.99
Enterprise Value/Ebitda9.02
Forecast
1Y Price Target
$33.00Price Target Upside28.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
TWFG, Inc. Class A Business Overview & Revenue Model
Company DescriptionTWFG, 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 MoneyTWFG generates revenue primarily through the sale of insurance policies, which include premiums collected from customers for property, casualty, and life insurance products. The company's revenue model is structured around underwriting insurance, where it assesses risk and prices policies accordingly. Key revenue streams include policy premiums, investment income from managing reserves, and fees from ancillary services such as risk management consulting. Additionally, TWFG may engage in strategic partnerships with other financial institutions and insurance providers, enhancing its distribution capabilities and expanding its market reach. These collaborations can lead to increased policy sales and improved customer acquisition, thereby contributing positively to the company's overall earnings.
TWFG, Inc. Class A Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 25, 2026
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with significant revenue growth, margin expansion, and successful M&A activities. However, challenges such as increased expenses and softening market conditions, particularly in California, were noted. Overall, the positive aspects, including robust financial metrics and strategic growth initiatives, outweigh the negatives.Q3-2025 Updates
Positive Updates
Significant Revenue Growth
Total revenues increased 21.3% over the prior year period to $64.1 million, with organic revenue growth of 10.2%.
Strong EBITDA and Margin Expansion
Adjusted EBITDA grew 44.7% to $17 million, with margins expanding by over 400 basis points to 26.5%.
Successful M&A Activities
Addition of 8 new retail locations, 1 corporate location, and 370 independent agents. Acquisition of Alabama Insurance Agency added 23 retail locations.
Robust Premium and Retention Rates
Written premium increased by 16.9% to $467.7 million with a retention rate of 91%.
Positive Cash Flow and Financial Position
Operating cash flow of $15 million and $151 million in cash with no draws on the revolver.
Negative Updates
Increased Expenses
Commission expenses increased by 13% and salaries and benefits rose by 19.2% over the prior year.
Softening Market Conditions
The transition from a hard to soft market is impacting renewal rates and premium retention.
Challenges in California
California remains a hard market, with limited carrier capacity and competitive pressures.
Company Guidance
During TWFG's Third Quarter 2025 Earnings Conference Call, the company provided robust guidance for the year ahead, reflecting its strong financial performance and strategic growth initiatives. Total revenues for the quarter rose by 21% quarter-over-quarter to $64.1 million, driven by a 10.2% organic revenue growth and successful mergers and acquisitions (M&A). Adjusted EBITDA increased significantly by 45% to $17 million, with margins expanding by 430 basis points to 26.5%. The company's recruiting and M&A efforts resulted in the addition of 8 new retail locations, 1 corporate location, and 370 independent agents, alongside the acquisition of Alabama Insurance Agency, which added 23 retail locations. For the full year 2025, TWFG expects total revenues to be between $240 million and $245 million, with an organic revenue growth rate of 11% to 13%, and adjusted EBITDA margins of 24% to 25%. The company ended the quarter with $151 million in cash, positioning it well for future growth and M&A opportunities.TWFG, Inc. Class A Financial Statement Overview
Summary
TWFG, Inc. exhibits strong financial performance with significant revenue and cash flow growth, improved profitability margins, and reduced leverage. The company has effectively managed its costs and capital structure, enhancing its financial stability. While past leverage levels were high, recent improvements indicate a positive trajectory.Income Statement
TWFG, Inc. shows strong revenue growth with a TTM increase of 6.27% and a previous annual growth of 16.01%. The gross profit margin improved significantly to 40.91% TTM from 24.04% in 2024, indicating better cost management. However, the net profit margin remains modest at 6.59% TTM, though it has improved from 1.42% in 2024. EBIT and EBITDA margins are healthy, reflecting operational efficiency.78
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.08 TTM from 0.14 in 2024, indicating reduced leverage and better financial stability. Return on equity is strong at 18.89% TTM, showcasing effective use of equity. The equity ratio is stable, reflecting a solid capital structure. However, past high leverage in 2023 poses a potential risk.72
Positive
Cash Flow
TWFG, Inc. demonstrates robust cash flow management with a TTM free cash flow growth of 7.92% and a strong operating cash flow to net income ratio of 1.15. The free cash flow to net income ratio is high at 93.23% TTM, indicating efficient cash conversion. Consistent growth in free cash flow highlights strong operational cash generation capabilities.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 217.88M | 193.72M | 166.99M | 147.78M |
| Gross Profit | 53.09M | 46.57M | 36.17M | 30.63M |
| EBITDA | 52.90M | 44.33M | 31.13M | 27.05M |
| Net Income | 6.61M | 2.75M | 0.00 | 0.00 |
Balance Sheet | ||||
| Total Assets | 349.17M | 323.43M | 115.44M | 114.15M |
| Cash, Cash Equivalents and Short-Term Investments | 150.99M | 195.77M | 39.30M | 22.33M |
| Total Debt | 9.02M | 10.30M | 51.76M | 13.31M |
| Total Liabilities | 53.43M | 48.14M | 84.39M | 56.37M |
| Stockholders Equity | 79.36M | 73.88M | 31.05M | 57.79M |
Cash Flow | ||||
| Free Cash Flow | 41.29M | 37.28M | 14.51M | 13.48M |
| Operating Cash Flow | 51.81M | 40.48M | 30.15M | 25.75M |
| Investing Cash Flow | -67.21M | -25.05M | -14.65M | -14.50M |
| Financing Cash Flow | -22.96M | 143.43M | -9.70M | -15.26M |
TWFG, Inc. Class A Technical Analysis
Negative
25.67
Price Trends
27.73
Negative
26.91
Negative
29.63
Negative
Market Momentum
-0.42
Positive
32.24
Neutral
16.53
Positive
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 25.67 is below the 20-day moving average (MA) of 28.02, below the 50-day MA of 27.73, and below the 200-day MA of 29.63, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 32.24 is Neutral, neither overbought nor oversold. The STOCH value of 16.53 is Positive, 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.44B | 58.05 | 8.79% | ― | 18.54% | -67.02% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $527.73M | 16.27 | 18.72% | 2.47% | 4.39% | 61.61% | |
67 Neutral | $527.73M | 16.53 | 18.72% | 2.47% | 4.39% | 61.61% | |
58 Neutral | $112.60M | 98.65 | 5.88% | ― | 16.79% | ― | |
54 Neutral | $283.31M | -53.85 | 15.11% | ― | 13.16% | ― | |
44 Neutral | $40.07M | -0.16 | -142.05% | ― | 7.56% | -344.04% |
* Financial Sector Average
TWFG
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.