Brown & Brown is scored 95 for moat and 74 for management. The management score rests on a return on invested capital of 5.9% and a gross margin of 87.7% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.63x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 15.0% a year, below the 18.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 30.0x. That produces an intrinsic value of $101.40, a 10-CAP price of $44.30 and a payback time price of $69.93, with the value zone set at the highest of the three, $69.93. Today's price of $61.77 sits inside that zone.
Brown & Brown currently reads as a strong business at a price the model supports. That is rare enough to warrant asking what the market sees that these figures do not.
| Price | $61.77 |
| Market cap | $20.7B |
| P/E ratio | 18.3x |
| Return on invested capital | 5.9% |
| Gross margin | 87.7% |
| Debt to equity | 0.63x |
| Free cash flow yield | 5.6% |
| Growth rate used | 15.0% |
| Growth rate measured | 18.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Buy price |
| Willis Towers Watson (WTW) | 64 | $187.60 |
| Ryan Specialty Holdings Inc (RYAN) | 77 | $61.93 |
| Goosehead Insurance Inc -A (GSHD) | 75 | $36.47 |
| Aon (AON) | 81 | $188.37 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Brown & Brown rather than accepting ours.