📊 AJG Key Takeaways
Is Arthur J. Gallagher & Co. (AJG) a Good Investment?
AJG demonstrates solid revenue growth of 20.7% YoY with strong operating margins at 13.4% and healthy free cash flow generation of $1.9B, indicating operational efficiency. However, diluted EPS declined 11.7% YoY despite revenue gains, and low ROE of 6.4% combined with elevated leverage (0.55x debt/equity) and tight liquidity (1.06x current ratio) present concerning capital efficiency and financial flexibility issues.
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.
Why Buy Arthur J. Gallagher & Co. Stock? AJG Key Strengths
- Strong revenue growth of 20.7% YoY demonstrating market expansion
- Healthy operating margin of 13.4% and net margin of 10.7% showing operational profitability
- Robust free cash flow generation at $1.9B with FCF margin of 13.4%, providing operational returns
- Conservative debt-to-equity ratio of 0.55x compared to sector leverage norms
- 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
- Diluted EPS declined 11.7% YoY despite strong revenue growth, indicating potential share dilution or margin compression
- Weak ROE of 6.4% suggests poor returns on shareholder capital despite large equity base
- Tight liquidity with current ratio of 1.06x limiting financial flexibility
- Interest coverage ratio of 2.9x is adequate but not robust, limiting debt capacity
- Elevated total liabilities of $47.3B representing 67% of total assets, indicating high financial leverage
- 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
- Trend in EPS growth relative to revenue growth - reconcile 20.7% revenue growth with -11.7% EPS decline
- ROE trajectory - currently weak at 6.4%, monitor if capital allocation improves returns
- Operating cash flow sustainability and free cash flow margins to assess quality of earnings
- Debt service coverage and interest expense trends given $12.9B long-term debt
- 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 |
|---|---|---|---|
| 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 |
| Q2 2023 | $2.0B | $234.5M | $1.07 |
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 Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AJG's key strengths?
Claude: Strong revenue growth of 20.7% YoY demonstrating market expansion. Healthy operating margin of 13.4% and net margin of 10.7% showing operational profitability. 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: Diluted EPS declined 11.7% YoY despite strong revenue growth, indicating potential share dilution or margin compression. Weak ROE of 6.4% suggests poor returns on shareholder capital despite large equity base. 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 $13.9B.
Does AJG pay dividends?
Arthur J. Gallagher & Co. pays dividends, with $667.0M 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 $5.74.
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 rating reflects both perspectives for balanced insights.
Is AJG a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Arthur J. Gallagher & Co. has a BUY rating with 72% 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 6.4% (sector avg: 12%), net margin of 10.7% (sector avg: 25%). Compare these metrics with sector averages to assess valuation.
Should I buy AJG stock in 2026?
Our dual AI analysis gives Arthur J. Gallagher & Co. a combined BUY rating 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 $1.9B, with capital expenditures of $65.6M. FCF margin is 13.4%.
How does AJG compare to other Finance stocks?
Vs Finance sector averages: Net margin 10.7% (avg: 25%), ROE 6.4% (avg: 12%), current ratio 1.06 (avg: 1.2).