Baldwin Insurance Group (BWIN)

Insurance distribution company Baldwin Insurance Group (NASDAQ:BWIN) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.8% year on year to $365.4 million. Its non-GAAP profit of $0.31 per share was in line with 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.

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $1.49 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 sales grew at an incredible 48.2% compounded annual growth rate over the last five years. 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 12.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

Baldwin Insurance Group also reports 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 13.5% 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 reported year-on-year revenue growth of 7.8%, and its $365.4 million of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 17.2% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will catalyze better top-line performance.

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 adjusted operating margin rose by 7.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q3, Baldwin Insurance Group’s breakeven margin was down 3.7 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 29.1% compounded annual growth rate over the last five years. Despite its adjusted operating margin improvement during that time, this performance was lower than its 48.2% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Diving into Baldwin Insurance Group’s quality of earnings can give us a better understanding of its performance. A five-year view shows Baldwin Insurance Group has diluted its shareholders, growing its share count by 107%. 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 22.5% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, Baldwin Insurance Group reported adjusted EPS of $0.31, down from $0.33 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Baldwin Insurance Group’s full-year EPS of $1.65 to grow 16.6%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

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 11.6 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 $32.15 million in Q3, equivalent to a 8.8% margin. This result was good as its margin was 2.2 percentage points higher than 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 $325.9 million of cash and $1.76 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 $335 million of EBITDA over the last 12 months, we view Baldwin Insurance Group’s 4.3× net-debt-to-EBITDA ratio as safe. We also see its $28.29 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 narrowly top analysts’ revenue expectations this quarter. On the other hand, its organic revenue slightly missed and its EPS was in line with Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $23.78 immediately following the results.

Updated: December 23, 2025 at 10:23 PM EST

When considering an investment in Baldwin Insurance Group, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

There are numerous reasons why we think Baldwin Insurance Group is one of the best business services companies out there. First of all, the company’s 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 12.4x. Looking across the spectrum of business services businesses, Baldwin Insurance Group’s fundamentals clearly illustrate it’s a special business. We like the stock at this price.

Wall Street analysts have a consensus one-year price target of $33.50 on the company (compared to the current share price of $24.07), implying they see 39.2% upside in buying Baldwin Insurance Group in the short term.