It has been about a month since the last earnings report for Brown & Brown (BRO). Shares have lost about 9.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Brown & Brown due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Brown & Brown, Inc. before we dive into how investors and analysts have reacted as of late.
Brown & Brown Q1 Earnings Top Estimates on Higher Commissions
Brown & Brown, Inc.’s first-quarter 2026 adjusted earnings of $1.39 per share beat the Zacks Consensus Estimate by 2.2%. The bottom line increased 7.8% year over year. The quarterly results were supported by higher commissions and fees, improved investment income, and higher adjusted EBITDAC, though partially offset by elevated expenses and flat organic growth.
BRO’s Q1 Details
Total revenues of $1.9 billion beat the Zacks Consensus Estimate by 1.4%. The top line improved 35.4% year over year. The upside can be primarily attributed to commission and fees, which grew 35.7% year over year to $1.8 billion. The figure beat the Zacks Consensus Estimate for commission and fees by 1%. Improved investment and other income added to the top line.
Organic revenues remained flat year over year at $1.3 billion. Investment income and other income increased 10.5% year over year to $21 million. Adjusted EBITDAC was $731 million, up 36.6% year over year. The EBITDAC margin improved 40 basis points year over year to 38.5%.
Total expenses increased 40% to $1.36 billion due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest.
Financial Update of BRO
Brown & Brown exited the first quarter with cash and cash equivalents of $1 billion, which decreased 7% from the 2025-end level. Long-term debt was $6.5 billion as of March 31, 2026, down 4.5% from the 2025-end level. Net cash provided by operating activities was $262 million, up 23% year over year.
Dividend Update
The board of directors approved a regular quarterly cash dividend of 16.5 cents per share to be paid out on May 20, 2026, to shareholders of record as of May 11, 2026.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Brown & Brown has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Brown & Brown has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Brown & Brown, Inc. (BRO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).