📊 AJG Key Takeaways
Is Arthur J. Gallagher & Co. (AJG) a Good Investment?
AJG demonstrates strong revenue growth (20.7% YoY) and excellent free cash flow generation (18.7% FCF margin), but faces significant margin compression with net income essentially flat despite revenue surge, indicating deteriorating profitability quality. Critically low returns on equity (3.5%) and assets (1.0%) combined with a tight current ratio (1.06x) suggest capital efficiency problems and liquidity pressure that offset the positives.
Arthur J. Gallagher shows solid fundamental quality through strong free cash flow generation, double-digit net margin, and a balanced leverage profile for a scaled insurance brokerage platform. Financial health appears acceptable with equity support and positive operating cash flow, but modest ROE/ROA and only moderate interest coverage suggest the business is solid rather than exceptional. The core case rests on durable earnings conversion and operating discipline, while future upside depends on improving returns on capital and maintaining cash flow quality.
Arthur J. Gallagher & Co. Key Strengths (AJG)
- Strong revenue growth of 20.7% YoY indicating market expansion
- Excellent free cash flow generation of $891.4M with 18.7% FCF margin, demonstrating cash conversion strength
- Solid operating margin of 21.9% typical of insurance broker business model
- Moderate leverage with 0.51x debt-to-equity ratio and adequate 6.6x interest coverage
- Low capital intensity ($65.6M CapEx) appropriate for service business
- Strong cash generation with $1.86B of free cash flow and a 13.4% FCF margin
- Healthy profitability profile with 13.4% operating margin and 10.7% net margin
- Manageable balance sheet leverage with debt-to-equity of 0.55x and current ratio of 1.06x
AJG Stock Risks: Arthur J. Gallagher & Co. Investment Risks
- Severe profit growth collapse: revenue +20.7% but net income -0.6% and EPS -11.7% indicates margin compression and poor acquisition integration
- Returns on capital critically weak with ROE of 3.5% and ROA of 1.0%, suggesting substantial capital inefficiency
- Liquidity pressure with current ratio of 1.06x leaving minimal working capital buffer for operational disruptions
- Low cash position ($1.4B) relative to $78.3B assets and $12.1B debt creates vulnerability
- Divergence between FCF generation and actual profitability suggests quality-of-earnings concerns
- Interest coverage of 2.9x leaves less room for earnings pressure or higher financing costs
- ROE of 6.4% and ROA of 2.1% indicate only moderate capital efficiency
- Lack of disclosed YoY growth data makes profitability trend quality harder to verify
Key Metrics to Watch
- Net margin trend and EPS growth trajectory to determine if margin compression is reversing
- Return on equity and ROA trends to assess capital deployment effectiveness
- Current ratio movement and cash position to monitor liquidity adequacy
- Organic revenue growth versus acquisition contribution to understand underlying business health
- Interest coverage and long-term debt trajectory
- Free cash flow conversion and return on equity
Arthur J. Gallagher & Co. (AJG) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Arthur J. Gallagher & Co. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
AJG Profit Margin, ROE & Profitability Analysis
AJG vs Finance Sector: How Arthur J. Gallagher & Co. Compares
How Arthur J. Gallagher & Co. compares to Finance sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Arthur J. Gallagher & Co. Stock Overvalued? AJG Valuation Analysis 2026
Based on fundamental analysis, Arthur J. Gallagher & Co. has mixed fundamental signals relative to the Finance sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Arthur J. Gallagher & Co. Balance Sheet: AJG Debt, Cash & Liquidity
AJG Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Arthur J. Gallagher & Co.'s revenue has grown significantly by 70% over the 5-year period, indicating strong business expansion. The most recent EPS of $4.42 reflects profitable operations.
AJG Revenue Growth, EPS Growth & YoY Performance
AJG Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.7B | $704.0M | $2.72 |
| Q3 2025 | $2.8B | $272.7M | $1.04 |
| Q2 2025 | $2.8B | $283.4M | $1.27 |
| Q1 2025 | $3.3B | $608.4M | $2.72 |
| Q3 2024 | $2.5B | $280.7M | $1.28 |
| Q2 2024 | $2.4B | $234.5M | $1.07 |
| Q1 2024 | $2.7B | $486.5M | $2.24 |
| Q3 2023 | $2.0B | $255.8M | $1.19 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Arthur J. Gallagher & Co. Dividends, Buybacks & Capital Allocation
AJG SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Arthur J. Gallagher & Co. (CIK: 0000354190)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AJG
What is the AI rating for AJG?
Arthur J. Gallagher & Co. (AJG) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 65% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AJG's key strengths?
Claude: Strong revenue growth of 20.7% YoY indicating market expansion. Excellent free cash flow generation of $891.4M with 18.7% FCF margin, demonstrating cash conversion strength. ChatGPT: Strong cash generation with $1.86B of free cash flow and a 13.4% FCF margin. Healthy profitability profile with 13.4% operating margin and 10.7% net margin.
What are the risks of investing in AJG?
Claude: Severe profit growth collapse: revenue +20.7% but net income -0.6% and EPS -11.7% indicates margin compression and poor acquisition integration. Returns on capital critically weak with ROE of 3.5% and ROA of 1.0%, suggesting substantial capital inefficiency. ChatGPT: Interest coverage of 2.9x leaves less room for earnings pressure or higher financing costs. ROE of 6.4% and ROA of 2.1% indicate only moderate capital efficiency.
What is AJG's revenue and growth?
Arthur J. Gallagher & Co. reported revenue of $4.8B.
Does AJG pay dividends?
Arthur J. Gallagher & Co. pays dividends, with $180.0M distributed to shareholders in the trailing twelve months.
Where can I find AJG SEC filings?
Official SEC filings for Arthur J. Gallagher & Co. (CIK: 0000354190) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AJG's EPS?
Arthur J. Gallagher & Co. has a diluted EPS of $3.16.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AJG's fundamental grade?
Based on our AI fundamental analysis in June 2026, Arthur J. Gallagher & Co. has a A grade with 65% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AJG stock overvalued or undervalued?
Valuation metrics for AJG: ROE of 3.5% (sector avg: 12%), net margin of 17.3% (sector avg: 25%). Compare these metrics with sector averages to assess valuation.
What is AJG's AI grade for 2026?
Our dual AI analysis gives Arthur J. Gallagher & Co. a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is AJG's free cash flow?
Arthur J. Gallagher & Co.'s operating cash flow is $957.0M, with capital expenditures of $65.6M. FCF margin is 18.7%.
How does AJG compare to other Finance stocks?
Vs Finance sector averages: Net margin 17.3% (avg: 25%), ROE 3.5% (avg: 12%), current ratio 1.06 (avg: 1.2).