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Why Is Brown & Brown (BRO) Up 4.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Brown & Brown's Q4 Earnings & Revenues Top Estimates
Brown & Brown's fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
The quarterly results reflected strong organic growth, improved EBITDAC margin and higher net investment income, as well as lower expenses.
Q4 Details
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million.
Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Investment income increased year over year to $18.5 million from $4.7 million in the year-ago quarter. The Zacks Consensus Estimate for the metric was pegged at $16.7 million and our estimate was $17.6 million.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 basis points (bps) year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Total expenses decreased 5.1% to $671.1 million. Our estimate was $764.9 million.
Financial Update
Brown & Brown exited 2023 with cash and cash equivalents of $755.7 million, up 1.1% from the 2022-end level.
Long-term debt was $3.1 billion as of Dec 31, 2023, up 0.9% from 2022 end.
Net cash provided by operating activities in 2023 was $1 billion, up 14.5% year over year.
Full-Year Highlights
Adjusted earnings were $2.81 per share, up 23.2% from 2022.
Total revenues of $4.3 billion improved 19.1% year over year. Commissions and fees increased 17.9%. Organic revenue growth was 10.2%.
Adjusted EBITDAC was $1.4 billion, in line with our estimate and up 23.1% from the 2022 level. Adjusted EBITDAC margin expanded 120 bps to 33.9%. Our estimate was 33.8%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Brown & Brown has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Brown & Brown (BRO) Up 4.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Brown & Brown's Q4 Earnings & Revenues Top Estimates
Brown & Brown's fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.
The quarterly results reflected strong organic growth, improved EBITDAC margin and higher net investment income, as well as lower expenses.
Q4 Details
Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million.
Organic revenues improved 7.7% to $922.9 million in the quarter under review.
Investment income increased year over year to $18.5 million from $4.7 million in the year-ago quarter. The Zacks Consensus Estimate for the metric was pegged at $16.7 million and our estimate was $17.6 million.
Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 basis points (bps) year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.
Total expenses decreased 5.1% to $671.1 million. Our estimate was $764.9 million.
Financial Update
Brown & Brown exited 2023 with cash and cash equivalents of $755.7 million, up 1.1% from the 2022-end level.
Long-term debt was $3.1 billion as of Dec 31, 2023, up 0.9% from 2022 end.
Net cash provided by operating activities in 2023 was $1 billion, up 14.5% year over year.
Full-Year Highlights
Adjusted earnings were $2.81 per share, up 23.2% from 2022.
Total revenues of $4.3 billion improved 19.1% year over year. Commissions and fees increased 17.9%. Organic revenue growth was 10.2%.
Adjusted EBITDAC was $1.4 billion, in line with our estimate and up 23.1% from the 2022 level. Adjusted EBITDAC margin expanded 120 bps to 33.9%. Our estimate was 33.8%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Brown & Brown has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.