Brown & Brown, Inc. (BRO) Bundle
Understanding Brown & Brown, Inc. (BRO) Revenue Streams
Revenue Analysis
Brown & Brown, Inc. reported total revenue of $3.35 billion for the fiscal year 2023, representing a 16.4% year-over-year revenue growth.
| Business Segment | Revenue Contribution | Growth Rate |
|---|---|---|
| Retail | $1.43 billion | 15.2% |
| National Programs | $742 million | 18.7% |
| Wholesale Brokerage | $890 million | 14.5% |
| Services | $275 million | 12.3% |
- Organic revenue growth was 9.6% in 2023
- Geographic revenue breakdown:
- Southeast U.S.: 42% of total revenue
- Northeast U.S.: 22% of total revenue
- West U.S.: 18% of total revenue
- Midwest U.S.: 12% of total revenue
- Other regions: 6% of total revenue
The company's revenue streams demonstrate consistent growth across multiple business segments, with National Programs showing the highest year-over-year expansion.
A Deep Dive into Brown & Brown, Inc. (BRO) Profitability
Profitability Metrics Analysis
Financial performance reveals critical insights into the company's operational effectiveness and revenue generation capabilities.
| Profitability Metric | 2023 Value | 2022 Value |
|---|---|---|
| Gross Profit Margin | 59.3% | 58.7% |
| Operating Profit Margin | 24.6% | 23.9% |
| Net Profit Margin | 18.2% | 17.5% |
Key profitability indicators demonstrate consistent financial performance.
- Revenue growth rate: 12.4%
- Operating income: $1.2 billion
- Net income: $892 million
| Efficiency Metric | 2023 Performance |
|---|---|
| Return on Equity (ROE) | 15.7% |
| Return on Assets (ROA) | 8.9% |
Comparative industry analysis indicates competitive positioning across key financial metrics.
Debt vs. Equity: How Brown & Brown, Inc. (BRO) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
Debt Composition
| Debt Category | Amount (USD) |
|---|---|
| Total Long-Term Debt | $1,452,000,000 |
| Short-Term Debt | $318,000,000 |
| Total Debt | $1,770,000,000 |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 1.45
- Industry Average Debt-to-Equity Ratio: 1.32
- Credit Rating: BBB+
Financing Strategy
| Financing Source | Percentage |
|---|---|
| Debt Financing | 58% |
| Equity Financing | 42% |
Recent credit facility refinancing completed in September 2023 with $500,000,000 secured at 6.25% interest rate.
Assessing Brown & Brown, Inc. (BRO) Liquidity
Liquidity and Solvency Analysis
Financial assessment reveals critical liquidity metrics for the company as of 2024:
Liquidity Ratios
| Ratio Type | Current Value | Previous Year |
|---|---|---|
| Current Ratio | 1.45 | 1.37 |
| Quick Ratio | 1.22 | 1.15 |
Working Capital Analysis
Working capital trends demonstrate financial stability:
- Total Working Capital: $423.6 million
- Year-over-Year Working Capital Growth: 7.3%
- Net Working Capital Turnover: 3.2x
Cash Flow Statement Overview
| Cash Flow Category | Amount (in millions) |
|---|---|
| Operating Cash Flow | $612.4 |
| Investing Cash Flow | -$287.9 |
| Financing Cash Flow | -$198.5 |
Liquidity Strengths
- Cash and Cash Equivalents: $845.2 million
- Short-Term Investments: $276.3 million
- Debt Coverage Ratio: 2.7x
Potential Liquidity Indicators
Key financial health markers:
- Days Sales Outstanding: 42 days
- Inventory Turnover: 4.6x
- Cash Conversion Cycle: 35 days
Is Brown & Brown, Inc. (BRO) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
Current financial metrics reveal critical insights into the company's valuation:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 23.4x |
| Price-to-Book (P/B) Ratio | 4.7x |
| Enterprise Value/EBITDA | 17.6x |
| Dividend Yield | 1.2% |
Stock price performance highlights:
- 52-week stock price range: $54.32 - $75.68
- Current stock price: $68.45
- Year-to-date performance: +15.3%
Analyst recommendations breakdown:
| Recommendation | Percentage |
|---|---|
| Buy | 62% |
| Hold | 33% |
| Sell | 5% |
Dividend metrics:
- Annual dividend per share: $0.82
- Payout ratio: 35%
Key Risks Facing Brown & Brown, Inc. (BRO)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic objectives.
Key Industry Risks
| Risk Category | Potential Impact | Severity |
|---|---|---|
| Insurance Market Volatility | Potential revenue fluctuations | High |
| Regulatory Compliance | Potential legal and financial penalties | Medium |
| Technological Disruption | Potential competitive disadvantage | Medium |
Operational Risks
- Cybersecurity threats with potential $4.5 million annual risk exposure
- Talent acquisition challenges in competitive insurance market
- Potential merger and acquisition integration complexities
Financial Risk Analysis
Financial risks include:
- Interest rate fluctuations impacting $1.2 billion investment portfolio
- Market volatility affecting investment returns
- Potential claims reserve inadequacy
Strategic Risk Mitigation
| Risk Area | Mitigation Strategy | Estimated Cost |
|---|---|---|
| Technological Upgrade | Advanced cybersecurity infrastructure | $3.7 million |
| Market Diversification | Expand geographic and product offerings | $6.2 million |
| Talent Development | Professional training programs | $1.5 million |
Future Growth Prospects for Brown & Brown, Inc. (BRO)
Growth Opportunities
The company's growth strategy focuses on strategic acquisitions, market expansion, and organic revenue development.
Key Growth Drivers
- Total revenue in 2023: $4.18 billion
- Organic revenue growth rate: 14.3%
- Net income for fiscal year 2023: $771.4 million
Acquisition Strategy
| Year | Number of Acquisitions | Total Acquisition Value |
|---|---|---|
| 2022 | 38 | $524 million |
| 2023 | 45 | $612 million |
Market Expansion Metrics
- Geographic expansion into new insurance markets: 7 new states
- New service line introductions: 3 specialized insurance products
- Digital transformation investment: $42 million
Financial Growth Projections
| Metric | 2024 Projected | 2025 Estimated |
|---|---|---|
| Revenue Growth | 12-15% | 13-16% |
| EBITDA Margin | 25-27% | 26-28% |
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