Investors interested in stocks from the Insurance - Life Insurance sector have probably already heard of NN Group NV Unsponsored ADR (NNGRY) and The Baldwin Insurance Group (BWIN) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best ...

Financial Data and Key Metrics Changes - For Q4 2024, organic revenue grew 19%, with total revenue reaching $329.9 million, and adjusted EBITDA margin expanded 310 basis points to 19.1% [10][26][29] - For the full year 2024, organic revenue growth was 17%, total revenue was $1.4 billion, and adjusted EBITDA grew 25% to $312.5 million, with an adjusted EBITDA margin of 22.5% [10][27][29] - Adjusted free cash flow for Q4 was $16.9 million, a 328% increase year-over-year, while for the full year, it was $134.9 million, up 97% from the prior year [29][30] Business Line Data and Key Metrics Changes - The IAS segment saw organic revenue growth of 16% in Q4 and 10% for the full year, with core commissions and fees revenue up 16% for the quarter and 11% for the year [13][26] - The UCTS segment experienced a strong Q4 with organic revenue growth of 25%, and for the full year, it was 27% [17][26] - The MIS segment delivered total organic revenue growth of 19% during Q4 and 20% for the full year, despite facing 820 basis points of headwinds [21][26] Market Data and Key Metrics Changes - The company noted that California wildfires and recent hurricanes have impacted the insurance landscape, highlighting the critical role of insurance in recovery efforts [7][10] - The company anticipates potential impacts on reinsurance pricing due to the California wildfires, which could affect gross commission rates for certain programs [70][72] Company Strategy and Development Direction - The company aims to continue deleveraging its balance sheet, with a target net leverage range of 3 to 4 times, while also focusing on capital allocation flexibility for future M&A opportunities [12][34][86] - The launch of a Texas domiciled reciprocal insurance exchange is seen as a significant milestone for vertical integration and innovative risk capital solutions [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit organic growth and improving margins despite a dynamic insurance marketplace [24][42] - The company expects organic revenue growth in the lower half of its long-term range of 10% to 15% for 2025, with adjusted EBITDA margin expansion anticipated [39][41] Other Important Information - The company is transitioning to a fiduciary reporting model for cash and receivables, which will change the presentation of adjusted free cash flow [34][36] - The majority of earn-out obligations are expected to be satisfied by the end of March, marking a significant milestone for the business [12][31] Q&A Session Summary Question: Discussion on contingents and earn-out opportunities - Management clarified that colleague earn-out incentives will not reappear in the future, as they were specific to past acquisitions [50][56] Question: Clarification on IAS growth and expectations - Management indicated strong momentum in IAS, with expected double-digit commission and fee growth for the year, while cautioning about potential impacts from the California wildfires [64][66] Question: Inquiry about reinsurance costs and impacts - Management confirmed a fixed impact of $10 million to $15 million from QBE arrangements, with expectations for the reciprocal exchange to provide better long-term economics [68][70] Question: Future M&A considerations and leverage - Management stated that they will not consider going above 4 times leverage in the foreseeable future and do not expect M&A activity in 2025 [86] Question: Clarification on EBITDA and cash flow outlook - Management explained that a significant portion of the variance between EBITDA and cash flow is due to interest expense and working capital headwinds [90][91]

Core Insights - The Baldwin Insurance Group reported revenue of $329.89 million for Q4 2024, a year-over-year increase of 15.9% and an EPS of $0.27, up from $0.14 a year ago, exceeding both revenue and EPS estimates [1] - The company achieved an organic revenue growth of 19%, surpassing the average estimate of 15.4% [4] - The stock has returned -6% over the past month, underperforming the Zacks S&P 500 composite's -1.8% change, and currently holds a Zacks Rank 3 (Hold) [3] Revenue Breakdown - Revenue from Insurance Advisory Solutions was $502.51 million, significantly higher than the average estimate of $153.14 million, reflecting a year-over-year change of +276.5% [4] - Underwriting, Capacity & Technology Solutions generated $116.76 million, slightly below the average estimate of $123.41 million, with a year-over-year increase of +13.1% [4] - Mainstreet Insurance Solutions reported revenue of $71.86 million, exceeding the estimated $70.61 million, marking an +18.6% change from the previous year [4] - Investment income was $3.19 million, close to the average estimate of $3.24 million [4] - Commissions and fees totaled $326.71 million, surpassing the estimated $320.50 million [4]

分组1 - The Baldwin Insurance Group reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, and showing an increase from $0.14 per share a year ago, representing an earnings surprise of 8% [1] - The company achieved revenues of $329.89 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.71% and increasing from $284.65 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] 分组2 - The stock has added approximately 1.4% since the beginning of the year, compared to the S&P 500's gain of 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $431.61 million, and for the current fiscal year, it is $1.86 on revenues of $1.56 billion [7] - The Zacks Industry Rank for Insurance - Life Insurance is currently in the bottom 36% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Total revenues for the year ended December 31, 2024, were $1,389.0 million, an increase from $1,218.6 million in 2023, representing a growth of 13.9%[303] - Adjusted EBITDA for 2024 was $312.5 million, compared to $250.2 million in 2023, resulting in an adjusted EBITDA margin of 22.5%, up from 20.5%[303] - The net loss for 2024 was $41.1 million, improving from a net loss of $164.0 million in 2023, indicating a significant reduction in losses[303] - Adjusted net income for 2024 was $176.9 million, up from $131.1 million in 2023, reflecting a significant improvement in profitability[308] Revenue Growth - Organic revenue for the year ended December 31, 2024, was $1.38 billion, representing a 17% growth compared to the previous year[306] - Total revenues for the Insurance Advisory Solutions (IAS) segment increased by 10% year over year to $711.9 million, driven by a 10% rise in core commissions and fees[312] - IAS commissions and fees grew by $63.8 million, or 10%, year over year, primarily due to a 21% sales velocity increase[314] - UCTS commissions and fees increased by $66.4 million, or 16%, year over year to $468.9 million, with core commissions and fees growth excluding the Wholesale Business reaching 30%[327][329] - Total revenues for MIS increased by $46.6 million, or 20%, year over year, reaching $281.3 million, driven by organic growth in core commissions and fees[339] Asset and Liability Changes - The company’s total assets increased by $32.8 million, while total liabilities rose by $42.9 million year over year[291] - Long-term debt increased by $428.0 million due to the May 2024 refinancing, which included a new $840 million senior secured first lien term loan facility[293] - Premiums, commissions, and fees receivable, net increased by $74.3 million, while premiums payable to insurance companies rose by $85.7 million, reflecting revenue growth and cash flow timing[292] - Contingent earnout liabilities decreased by $130.9 million, influenced by settlements of $126.2 million and a change in fair value of contingent consideration[294] Cash Flow and Financing Activities - Net cash provided by operating activities increased by $57,507,000 year-over-year, totaling $102,151,000 for 2024[381][382] - Net cash provided by investing activities increased by $35,221,000 year-over-year, driven by $57 million from divestitures[381][383] - Net cash used in financing activities increased by $3,414,000 year-over-year, totaling $29,644,000 for 2024[381][384] - The revolving line of credit decreased by $341.0 million as a result of the refinancing, which aimed to optimize the company’s capital structure[293] Intangible Assets and Goodwill - The company recorded $953.5 million in intangible assets as of December 31, 2024, with no impairment charges recorded in 2024, 2023, or 2022[400] - Goodwill amounted to $1.4 billion at December 31, 2024, with no impairment charges recorded during 2024, 2023, or 2022[406] Tax and Deferred Assets - Deferred tax assets are fully reserved due to a history of cumulative losses over the past three years[380] - The company has established a full valuation allowance for deferred tax assets at December 31, 2024, due to the likelihood of non-realization[418] - If the valuation allowance had not been established, the company would have recognized deferred tax assets of approximately $169.1 million[419] Other Income and Expenses - Total other income for UCTS surged to $34.1 million, compared to $0.9 million in the previous year, marking a significant increase[325] - UCTS operating income improved by $12.4 million, or 42%, year over year, totaling $41.9 million[339] - Corporate and Other recorded a loss before income taxes of $216.8 million, an improvement of $26.8 million, or 11%, compared to the previous year[346] Commitments and Obligations - Total contractual obligations and commitments as of December 31, 2024, amount to $2,395,384,000, with $318,167,000 due within one year[364] - Operating lease obligations total $99,311,000, with annual lease expenses of $21.5 million for 2024[364][367] - Debt obligations include $600 million under Senior Secured Notes and $835.8 million under the 2024 Term Loan, with estimated interest rates of 7.125% and 7.61% respectively[369] Contingent Consideration - Contingent consideration liabilities totaled $145.6 million as of December 31, 2024, with a potential maximum of $268.8 million in remaining payments[413] - If all contingent consideration targets are achieved, the company would incur an additional $123.2 million in expenses over the next two years[413] Other Notable Points - The company has a commitment to donate $3.4 million to the University of South Florida through October 2028[371] - Profit-sharing commissions are subject to significant reversal, with management estimating them based on historical outcomes and known trends[391] - Costs to obtain contracts are capitalized as deferred commission expense and amortized over five years[392]

Revenue Growth - Fourth Quarter 2024 total revenue increased by 16% year-over-year to $329.9 million, with organic revenue growth of 19%[1] - Full Year 2024 total revenue grew by 14% year-over-year to $1.4 billion, with organic revenue growth of 17%[5] - Revenues for Q4 2024 reached $329,892 thousand, up from $284,648 thousand in Q4 2023, representing a growth of 15.9%[34] - Organic revenue for Q4 2024 was $326,707 thousand, an increase of 15.5% from $282,522 thousand in Q4 2023[36] - Organic revenue growth for the year 2024 was $196,922 thousand, compared to $187,213 thousand in 2023, reflecting a growth rate of 5.5%[36] Profitability and Loss - Fourth Quarter 2024 net loss was $34.8 million, resulting in a diluted loss per share of $0.31; adjusted diluted EPS grew by 93% year-over-year to $0.27[1][3] - Net loss for 2024 was $41,081,000, an improvement from a net loss of $164,019,000 in 2023[19] - The net loss for Q4 2024 was $(34,839) thousand, an improvement from $(62,496) thousand in Q4 2023, showing a reduction of 44.3%[34] - The company reported a net loss margin of (3)% for the year 2024, improving from (13)% in 2023[34] Adjusted EBITDA and Cash Flow - Adjusted EBITDA for the Fourth Quarter 2024 increased by 38% year-over-year to $63.2 million, with an adjusted EBITDA margin of 19.1%, a 310 basis point expansion compared to the prior year[1][3] - Full Year 2024 adjusted EBITDA grew by 25% year-over-year to $312.5 million, with an adjusted EBITDA margin of 22.5%, a 200 basis point expansion compared to 2023[5] - Adjusted EBITDA for Q4 2024 was $63,160 thousand, compared to $45,608 thousand in Q4 2023, reflecting a year-over-year increase of 38.4%[34] - Pro forma adjusted EBITDA for the year 2024 was $310,888 thousand, compared to $243,995 thousand in 2023, indicating a significant increase of 27.4%[41] - Adjusted free cash flow for Full Year 2024 increased by 97% year-over-year to $134.9 million[5] - Adjusted free cash flow for 2024 was $134.9 million, a significant increase from $68.6 million in 2023, representing a year-over-year growth of 96.6%[44] - Without the impact of one-time refinancing costs of $14.0 million, adjusted free cash flow would have expanded by 117% year-over-year to $148.9 million for 2024[45] Operational Performance - The CEO highlighted continued momentum across all business segments, showcasing double-digit growth and a focus on innovative technology platforms[3] - The financial data reflects a strong operational performance and effective cash flow management strategies implemented by the company[44] - The company continues to focus on enhancing its financial metrics and operational efficiencies moving forward[45] Assets and Liabilities - Total assets increased to $3,534,731,000 in 2024 from $3,501,937,000 in 2023, representing a growth of 0.9%[17] - Current assets rose to $1,026,490,000 in 2024, up from $925,905,000 in 2023, marking an increase of 10.9%[17] - Total liabilities increased to $2,525,934,000 in 2024 from $2,483,055,000 in 2023, reflecting a rise of 1.7%[17] - Cash and cash equivalents and restricted cash at the end of 2024 totaled $312,769,000, up from $226,963,000 at the end of 2023, a growth of 37.8%[19] Capital Expenditures - The company made capital expenditures of $41,049,000 in 2024, compared to $21,376,000 in 2023, indicating a 92.5% increase[19] Client Base - The company represents over three million clients across the United States and internationally, emphasizing its commitment to tailored insurance solutions[8]

Company Overview - Baron is an asset management firm specializing in growth equity investment solutions [1] - The company was founded in 1982 and has a long-term, fundamental, active approach to growth investing [1] - Research remains at the core of the company's business, as it was originally established as an equity research firm [1] Business Focus - The company is focused on delivering growth equity investment solutions [1] - Its investment approach is characterized by a long-term, fundamental, and active strategy [1] Communication and Inquiries - The account mentioned is not managed or monitored by Baron Capital [1] - Messages sent via Seeking Alpha will not receive a response, and inquiries should be directed through the firm's official channels [1]

Financial Data and Key Metrics Changes - The company reported total revenue of $338.9 million for Q3 2024, reflecting a 14% organic revenue growth year-over-year [20] - Adjusted EBITDA increased by 14% to $72.8 million, with an adjusted EBITDA margin expanding approximately 60 basis points to 21.5% [22] - Adjusted free cash flow grew 15% to $27.8 million, with year-to-date adjusted free cash flow reaching $99.2 million, up 31% from the prior year [10][23] Business Line Data and Key Metrics Changes - The IAS segment experienced organic revenue growth of 7% for the quarter, with year-to-date growth at 9% [12] - The UCTS segment saw a robust organic revenue growth of 26% and commissions and fees growth of 31% [15] - The MIS segment delivered total organic revenue growth of 14% and commissions and fees revenue growth of 11% [16] Market Data and Key Metrics Changes - The company faced increased headwinds from rate and exposure compression in the IAS segment, with a 4.7% decline driven by timing-related softness in construction practices [12] - Client retention remained stable at approximately 90%, while new business production increased significantly, with a 36% rise in Q3 compared to the previous year [13] Company Strategy and Development Direction - The company aims to build a preeminent insurance and risk advisory solutions firm, focusing on operational rigor and efficient execution at scale [88] - The strategic plan includes an aspiration to grow the business to $3 billion in revenue and achieve a 30% margin over the next five years [92] - The company is preparing for a significant inflection in free cash flow generation starting in the second quarter of 2025, with expectations of continued growth and margin accretion [91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver outsized organic growth and margin improvement despite external market headwinds [18] - The outlook for Q4 2024 anticipates revenue between $325 million and $335 million, with organic revenue growth expected towards the high end of the 10% to 15% long-term range [29] - Management acknowledged potential challenges in 2025 due to obligations related to reinsurance arrangements but remains optimistic about the overall growth trajectory [30][31] Other Important Information - The company reported a GAAP net loss of $14.5 million for Q3 2024, with an adjusted net income of $38.5 million [20][21] - Net leverage stood at 4.2x, a reduction from the previous quarter, with a goal to bring it back within the long-term range of 3x to 4x by year-end [27] Q&A Session Summary Question: Concerns about Westwood's underwriting profitability and capacity - Management clarified that the relationship with QBE is not ending in May 2025 as previously reported, and they are working to arrange reinsurance to support the program through May 2027 [36][40] Question: Impact of potential macroeconomic slowdown on 2025 guidance - Management identified construction and employee benefits as macro-sensitive areas but expressed confidence in the durability of growth driven by new business [49][50] Question: Clarification on margin guidance for 2024 and 2025 - Management explained that the conservative margin outlook for 2024 is due to expected headwinds and a one-time impact from storm activity, while 2025 guidance includes anticipated EBITDA headwinds from reinsurance obligations [56][57] Question: Producer retention metrics - Management reported strong producer retention, with over 95% retention among top-performing colleagues [68] Question: Changes in cash flow guidance - Management indicated that the revised cash flow guidance reflects a combination of Q3 performance and anticipated adjustments for Q4, primarily driven by adjusted EBITDA and increased cash interest expense [75]

Core Insights - The Baldwin Insurance Group reported a revenue of $338.94 million for Q3 2024, marking a year-over-year increase of 10.7% and an EPS of $0.33, up from $0.29 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $341.95 million, resulting in a surprise of -0.88%, while the EPS also missed the consensus estimate of $0.34 by -2.94% [1] Financial Performance Metrics - Organic Revenue Growth was reported at 14%, slightly below the four-analyst average estimate of 14.6% [3] - Revenue from Investment Income was $3.73 million, exceeding the average estimate of $2.23 million based on two analysts [3] - Revenue from Commissions and Fees was $335.21 million, which was below the average estimate of $339.19 million based on two analysts [3] Stock Performance - Shares of The Baldwin Insurance Group have declined by -12.1% over the past month, contrasting with the Zacks S&P 500 composite's increase of +0.4% [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Core Insights - The Baldwin Insurance Group reported quarterly earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.34 per share, but showing an increase from $0.29 per share a year ago, resulting in an earnings surprise of -2.94% [1] - The company posted revenues of $338.94 million for the quarter, which was below the Zacks Consensus Estimate by 0.88%, but an increase from $306.27 million year-over-year [2] - The stock has gained approximately 88.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 20.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $322.34 million, and for the current fiscal year, it is $1.55 on revenues of $1.39 billion [7] - The estimate revisions trend for the company is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Insurance - Life Insurance industry is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Primerica, is expected to report quarterly earnings of $4.78 per share, reflecting a year-over-year change of +11.7%, with revenues anticipated to be $740.09 million, up 3.8% from the previous year [9][10]