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Brown & Brown - AI Stock Analysis
Analysis generated May 20, 2025
Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm providing risk management solutions to individuals and businesses. The company operates through various segments, including retail, national programs, wholesale brokerage, and services. With a long-standing history of growth and innovation, Brown & Brown has established itself as a key player in the insurance brokerage industry.
Fundamental Analysis
The company reported a revenue of $1.39 billion for the last quarter, marking a robust increase of 27.18% compared to the previous quarter and an impressive 11.96% year-over-year growth. Such figures are indicative of strong operational performance and market expansion.
Net income likewise saw a substantial increase, rising to $331 million last quarter. This represents a 57.62% increase compared to the preceding quarter and a 12.97% rise year-over-year. This growth in net income is an important indicator of the company’s improving profitability.
EBITDA for the last quarter stood at $539 million, a noteworthy rise of 39.28% quarter-over-quarter and 15.17% year-over-year. EBITDA acts as a key performance indicator showing the company's operational efficiency and profitability.
However, the current Price-to-Earnings (P/E) ratio is 31.2, which is relatively high and may suggest overvaluation, potentially indicating a bearish outlook. Investors should be cautious of the stock's valuation levels.
Technical Analysis
The current stock price of $112.45 represents a short-term decline of 3.94% compared to a month ago. However, on a longer scale, the price has increased by 25.84% from a year ago, reflecting an overall positive long-term trend.
The trend is overall bullish as demonstrated by the Simple Moving Average (SMA) values. The current 10-day SMA is 110.95, slightly higher than the previous SMA10 of 110.83, indicating potential upward movement in the stock price.
The Relative Strength Index (RSI) stands at 50.2, putting the stock in a neutral category. An RSI value close to 50 generally suggests the stock is neither overbought nor oversold, indicating a balanced market sentiment.
Alternative Data Analysis
In terms of job postings, Brown & Brown has 520 open positions which have remained stable over the past few months. This data signifies a stable workforce and potentially steady future growth.
Employee sentiment regarding the company is neutral, which may necessitate a closer look at internal company policies and culture.
The company's web traffic is down by 79%, with an estimate of 5,000 visitors in recent months, suggesting a potential decline in customer acquisition. This is a concerning metric as it could indicate a loss in market interest or engagement.
Social media metrics reveal mixed results. Instagram followers have increased by 4% to 2,100, indicating a rise in interest, whereas the Twitter follower count remains static at 640.
AltIndex's AI score for Brown & Brown is 61, which constitutes a buy signal. This score integrates various fundamental, technical, and alternative data points, giving a positive outlook.
Conclusion
In conclusion, Brown & Brown shows several strong financial metrics with revenues, net income, and EBITDA all demonstrating significant growth both quarter-over-quarter and year-over-year. Nevertheless, the high P/E ratio suggests caution may be warranted as the stock might be overvalued at current levels.
Technically, the stock appears bullish over the long term, although recent declines indicate potential short-term volatility. Alternative data provides a mixed view, with stable job postings but declining web traffic and stable social media engagement.
Overall, while the company has robust fundamentals and a generally positive long-term outlook, potential investors should weigh the risks associated with the current valuation and declining web traffic. Given the AI score of 61 signaling a buy, a cautious yet optimistic approach may be warranted for investment decisions.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
