Arthur J. Gallagher & Company
Exchange: NYSESector: Financial ServicesIndustry: Insurance Brokers
Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.
Did you know?
AJG's revenue grew at a 11.7% CAGR over the last 6 years.
Current Price
$217.61
+0.59%GoodMoat Value
$275.65
26.7% undervaluedProfile
Valuation (TTM)
Market Cap$55.88B
P/E37.40
EV$67.75B
P/B2.40
Shares Out256.80M
P/Sales4.01
Revenue$13.94B
EV/EBITDA18.76
Arthur J. Gallagher & Company (AJG) Stock Analysis
GoodMoat Analysis
Arthur J. Gallagher appears to be a high-quality, acquisitive insurance brokerage with a strong competitive position, but it is trading at a premium valuation. The GoodMoat target price suggests a favourable margin of safety, but this hinges on continued successful execution of its growth strategy.
Read full analysis
Arthur J. Gallagher & Co. (AJG) is a global insurance brokerage and risk management firm. It acts as an intermediary, connecting clients with insurers and providing consulting services. The company's primary competitive advantages (its 'moat') stem from its massive scale and its proven, disciplined acquisition strategy. Applying the GoodMoat framework, it would likely score highly on criteria like Scale Privilege, Strategic Partnerships, and Founder-Led Execution, given its global reach, long-term client relationships, and a management team with a strong track record of capital allocation through hundreds of bolt-on acquisitions. This has driven impressive financial results, including a 36.7% YoY revenue growth, though much of this is inorganic. The company also shows strong operational health with a 19.5% operating margin and manageable debt. The key question is valuation. At a P/E of 36.7 and an FCF Yield of 3.3%, the stock is not cheap on traditional metrics. However, the provided GoodMoat Target of $275.65 implies a potential upside of approximately 29% from the current $213.56 price. According to the Decision Framework, this would place it in the 'Favourable' band for Margin of Safety (20-40%). For a value investor, this presents a nuanced case: the business passes the 'Moat & Quality Gate' with a likely high X-Ray Business Score, but the valuation requires confidence that the company's acquisition-driven growth and integration prowess will continue to create value at its current pace. It is a company worth investigating further, with a focus on the sustainability of its ROIC on acquired capital and the integration risks inherent in its model. Analysis based on data as of 2024-05-15.
Market Cap$55.88B
Current Price$217.61
P/E Ratio37.40
Forward P/E—
PEG Ratio-0.78
EPS$5.74
Book Value$90.81
P/B Ratio2.40
AJG Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 9.2% FCF growth (CAGR)
Cash vs Debt
Net Debt: 12.1B
Revenue
7.2B
FY19
7.0B
FY20
8.2B
FY21
8.6B
FY22
10.1B
FY23
11.6B
FY24
13.9B
FY25
Net Income
669M
FY19
819M
FY20
907M
FY21
1.1B
FY22
970M
FY23
1.5B
FY24
1.5B
FY25
AJG 52-Week Range
$204.16
$345.33
50-Day MA: $222.67200-Day MA: $266.78
Did you know?
AJG's revenue grew at a 11.7% CAGR over the last 6 years.
Arthur J. Gallagher & Company (AJG) Financial Summary
Arthur J. Gallagher & Company (AJG) is a Financial Services company in the Insurance Brokers industry, listed on NYSE. The stock currently trades at $217.61 with a market capitalization of $55.88B.
Key valuation metrics include a P/E ratio of 37.40, price-to-book ratio of 2.40, and EPS of $5.74. The company reports a profit margin of 10.7% and return on equity of 6.4%.
AJG Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $55.88B |
| P/E Ratio | 37.40 |
| EPS | $5.74 |
| P/B Ratio | 2.40 |
| P/S Ratio | 4.01 |
| EV/EBITDA | 18.76 |
| Dividend Yield | 1.19% |
| Profit Margin | 10.7% |
| Return on Equity | 6.4% |
| Debt/Equity | 0.58 |
AJG Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $7.20B | $668.80M |
| FY20 | $7.00B | $818.80M |
| FY21 | $8.21B | $906.80M |
| FY22 | $8.55B | $1.11B |
| FY23 | $10.07B | $970.00M |
| FY24 | $11.55B | $1.46B |
| FY25 | $13.94B | $1.49B |
Arthur J. Gallagher & Company (AJG) Valuation
Based on GoodMoat's DCF model, Arthur J. Gallagher & Company has a fair value estimate of $275.65. At the current price of $217.61, the stock appears 21.1% undervalued relative to our intrinsic value estimate.
AJG Quality Indicators
Arthur J. Gallagher & Company maintains a profit margin of 10.7% and an operating margin of 19.5%. Return on equity stands at 6.4%. The current ratio is 1.06. Debt-to-equity ratio is 0.58.
About Arthur J. Gallagher & Company
Arthur J. Gallagher & Co., a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.
AJG Free Cash Flow
Arthur J. Gallagher & Company generated $1.78B in trailing twelve-month free cash flow, representing an FCF yield of 3.19%. This moderate FCF yield indicates reasonable cash generation.
AJG Shares Outstanding
Arthur J. Gallagher & Company has 0.26 billion shares outstanding at a share price of $217.61, giving it a market capitalization of $55.88B.
AJG Recent Insider Trades
Recent insider transactions at Arthur J. Gallagher & Company include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Hudson Scott R (Vice President) | SELL | 3,800 | $864766.00 |
| Mead Christopher E (VICE PRESIDENT) | SELL | 4,000 | $908472.00 |
| GALLAGHER J PATRICK JR (CEO) | SELL | 27,450 | $6.32M |