Baldwin Insurance Group (BWIN)

Insurance distribution company Baldwin Insurance Group (NASDAQ:BWIN) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 5.3% year on year to $347.3 million. Its non-GAAP profit of $0.31 per share was 7.3% above analysts’ consensus estimates.

Company Overview

Rebranded from BRP Group in May 2024, Baldwin Insurance Group (NASDAQ:BWIN) is an independent insurance distribution company that provides tailored insurance, risk management, and employee benefits solutions to businesses and individuals.

The insurance brokerage industry, while influenced by insurance pricing cycles, benefits from durable secular tailwinds as rising risk complexity (climate, data privacy), regulatory scrutiny, and insurance pricing inflation. These increase demand for professional risk-management advice. Brokers operate models that rely on commissions and fees tied to premium volumes and growing contributions from recurring advisory, benefits, and compliance services. Scale is a key advantage, enabling better carrier access, stronger data and benchmarking, and efficient deployment of technology and compliance investments, which in turn supports ongoing industry consolidation. The headwinds are labor intensity and wage inflation for producers, regulatory complexity (this cuts both ways, as you can see), and execution risk when integrating new digital tools into legacy workflows.

Baldwin Insurance Group competes with large publicly traded insurance brokers including Aon, Marsh & McLennan, Willis Towers Watson, Arthur J. Gallagher, and Brown & Brown, as well as significant private competitors such as AssuredPartners, Hub International, and USI. In the personal lines segment, the company also competes with Goosehead Insurance.

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $1.50 billion in revenue over the past 12 months, Baldwin Insurance Group is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Baldwin Insurance Group’s 44.3% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows Baldwin Insurance Group’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Baldwin Insurance Group’s annualized revenue growth of 11.1% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Baldwin Insurance Group’s organic revenue averaged 12.1% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Baldwin Insurance Group’s revenue grew by 5.3% year on year to $347.3 million, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 28.3% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will spur better top-line performance.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Baldwin Insurance Group was roughly breakeven when averaging the last five years of quarterly operating profits, inadequate for a business services business.

On the plus side, Baldwin Insurance Group’s operating margin rose by 10.5 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q4, Baldwin Insurance Group generated an operating margin profit margin of negative 3.8%, down 2.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Baldwin Insurance Group’s EPS grew at an astounding 29.7% compounded annual growth rate over the last five years. Despite its operating margin improvement during that time, this performance was lower than its 44.3% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

We can take a deeper look into Baldwin Insurance Group’s earnings quality to better understand the drivers of its performance. A five-year view shows Baldwin Insurance Group has diluted its shareholders, growing its share count by 94.4%. This dilution overshadowed its increased operational efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Baldwin Insurance Group, its two-year annual EPS growth of 22.8% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, Baldwin Insurance Group reported adjusted EPS of $0.31, up from $0.27 in the same quarter last year. This print beat analysts’ estimates by 7.3%. Over the next 12 months, Wall Street expects Baldwin Insurance Group’s full-year EPS of $1.69 to grow 21.5%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Baldwin Insurance Group broke even from a free cash flow perspective over the last five years, giving the company limited opportunities to return capital to shareholders.

Taking a step back, we can see that Baldwin Insurance Group’s margin dropped by 10 percentage points during that time. If the trend continues, it could signal it’s in the middle of a big investment cycle.

Baldwin Insurance Group’s free cash flow clocked in at $10.96 million in Q4, equivalent to a 3.2% margin. Its cash flow turned positive after being negative in the same quarter last year. Its cash profitability was also above its five-year level, and we hope the company can build on this trend.

Baldwin Insurance Group reported $123.7 million of cash and $1.73 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $341.5 million of EBITDA over the last 12 months, we view Baldwin Insurance Group’s 4.7× net-debt-to-EBITDA ratio as safe. We also see its $63.43 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Baldwin Insurance Group beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed and its organic revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded up 4.2% to $19.27 immediately after reporting.

Updated: February 26, 2026 at 10:52 PM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Baldwin Insurance Group, you should also grasp the company’s longer-term business quality and valuation.

Aside from its balance sheet, Baldwin Insurance Group is a pretty good company. For starters, its revenue growth was exceptional over the last five years. And while its cash profitability fell over the last five years, its expanding adjusted operating margin shows the business has become more efficient. Additionally, Baldwin Insurance Group’s astounding EPS growth over the last five years shows its profits are trickling down to shareholders.

Baldwin Insurance Group’s P/E ratio based on the next 12 months is 8.2x. Certain aspects of its fundamentals are attractive, but we aren’t investing at the moment because its balance sheet makes us uneasy. We recommend investors interested in the company wait until it generates sufficient cash flows or raises money before getting involved.

Wall Street analysts have a consensus one-year price target of $32.11 on the company (compared to the current share price of $18.99), implying they see 69.1% upside in buying Baldwin Insurance Group in the short term.