It has been about a month since the last earnings report for Brown & Brown (BRO). Shares have added about 9.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Brown & Brown Q4 Earnings Top Estimates on Higher Commission and Fees

Brown & Brown's fourth-quarter 2024 adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 48.3% year over year.

The quarterly results reflected improved organic revenues, driven by higher commission and fees and investment income and expanded EBITDAC margin, offset by higher expenses.

BRO’s Q4 Details

Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 6.4%. The top line improved 15.4% year over year. The upside can be primarily attributed to commission and fees, which grew 15.4% year over year to $1.1 billion. Our estimate for commission and fees was $1 billion. The Zacks Consensus Estimate was pegged at $1.1 billion. Organic revenues improved 13.8% to $1.1 billion in the quarter under review.

Investment income increased 22.2% year over year to $22 million. The Zacks Consensus Estimate for the metric was pegged at $20.7 million and our estimate was $31.8 million.

 Adjusted EBITDAC was $390 million, up 22.6% year over year. EBITDAC margin expanded 190 basis points (bps) year over year to 32.9%. Our estimate for adjusted EBITDAC was $366.3 million.

Total expenses increased 35.72% to $909 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest. Our estimate was $801.2 million.

Full-Year Highlights

Adjusted earnings of $3.25 per share missed the Zacks Consensus Estimate of $4.73 per share. The bottom line increased 81.2% year over year.
Total revenues of $4.8 billion beat the Zacks Consensus Estimate of $4.7 billion. The top line improved 12.9% year over year. Organic revenues increased 10.4%.

Adjusted EBITDAC increased 17% to $1.7 billion, while adjusted EBITDAC margin expanded 130 bps to 35.2%.

Financial Update of BRO

Brown & Brown exited 2024 with cash and cash equivalents of $2.5 billion, which increased 8.6% from the 2023-end level. Long-term debt was $4 billion as of Dec. 30, 2024, up 11.5% from the 2023-end level. Net cash provided by operating activities in 2024 was $1.6 billion, up 16.2% year over year.

Dividend Update

The board of directors paid a regular cash dividend of $154 million in the reported quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Brown & Brown has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Brown & Brown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Brown & Brown, Inc. (BRO) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research