Arthur J. Gallagher & Co.AJG
NYSE • Financial Services
$213.55
P/E
37.10
PEG
1.01
FCF Yield
4.1%
Rev Growth YoY
+36.7% YoY
Gross Margin
42.2%
Health Score
7/10
D/E Ratio
0.56
Confidence
MEDIUM
Business Snapshot
Arthur J. Gallagher & Co. is one of the largest insurance brokerage and risk management firms in the world, connecting businesses and individuals with insurance carriers and providing claims management services. The company operates primarily in the U.S. but has a significant and growing international presence, particularly through acquisitions.
Financial Health
Score: 7/10
AJG's financial health is broadly solid. Free cash flow stands at a healthy $2.27B (FCF yield of 4.1%), providing meaningful capital for reinvestment and acquisitions...
Risk Assessment
- EARNINGS DETERIORATION: Net income declined -48.3% year-over-year despite 36.7% revenue growth, signalling a severe compression of bottom-line profitability.
- VALUATION PREMIUM: P/E of 37.1x is approximately 49% above the sector average of 25x, leaving limited margin of safety if growth expectations disappoint.
- TECHNICAL BREAKDOWN: AJG's price of $213.55 is below both the 50-day MA ($220.59) and the 200-day MA ($266.18), with a confirmed death cross — a bearish pattern suggesting sustained downward price momentum.
- PRICE DRAWDOWN: The stock sits 39.2% below its 52-week high of $351.23, reflecting significant erosion in market confidence over the past year.
- EARNINGS CONSISTENCY: AJG beat earnings estimates in only 2 of the last 4 quarters, indicating execution uncertainty relative to analyst expectations.
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**Score: 7/10** AJG's financial health is broadly solid. Free cash flow stands at a healthy $2.27B (FCF yield of 4.1%), providing meaningful capital for reinvestment and acquisitions. The debt/equity ratio of 0.56x is manageable and not a near-term concern. However, net margin of 11.5% and return on equity of just 6.9% are relatively modest for the size and scale of the business, suggesting that profitability efficiency could be stronger despite robust top-line performance. ---
- **EARNINGS DETERIORATION:** Net income declined -48.3% year-over-year despite 36.7% revenue growth, signalling a severe compression of bottom-line profitability. - **VALUATION PREMIUM:** P/E of 37.1x is approximately 49% above the sector average of 25x, leaving limited margin of safety if growth expectations disappoint. - **TECHNICAL BREAKDOWN:** AJG's price of $213.55 is below both the 50-day MA ($220.59) and the 200-day MA ($266.18), with a confirmed death cross — a bearish pattern suggesting sustained downward price momentum. - **PRICE DRAWDOWN:** The stock sits 39.2% below its 52-week high of $351.23, reflecting significant erosion in market confidence over the past year. - **EARNINGS CONSISTENCY:** AJG beat earnings estimates in only 2 of the last 4 quarters, indicating execution uncertainty relative to analyst expectations. ---
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