It has been about a month since the last earnings report for Brown & Brown (BRO). Shares have added about 4.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Brown & Brown's Q4 Earnings & Revenues Top Estimates

Brown & Brown's fourth-quarter 2023 adjusted earnings of 58 cents per share beat the Zacks Consensus Estimate by 9.4%. The bottom line increased 16% year over year.

The quarterly results reflected strong organic growth, improved EBITDAC margin and higher net investment income, as well as lower expenses.

Q4 Details

Total revenues of $1.03 billion beat the Zacks Consensus Estimate by 4.6%. The top line improved 13.8% year over year. The upside can be primarily attributed to commission and fees, which grew 12.4% year over year to $1 billion. Our estimate for commission and fees was $943.6 million.

Organic revenues improved 7.7% to $922.9 million in the quarter under review.

Investment income increased year over year to $18.5 million from $4.7 million in the year-ago quarter. The Zacks Consensus Estimate for the metric was pegged at $16.7 million and our estimate was $17.6 million.

Adjusted EBITDAC was $317.7 million, up 11.7% year over year. EBITDAC margin however contracted 40 basis points (bps) year over year to 31%. Our estimate for adjusted EBITDAC was $291.4 million.

Total expenses decreased 5.1% to $671.1 million. Our estimate was $764.9 million.

Financial Update

Brown & Brown exited 2023 with cash and cash equivalents of $755.7 million, up 1.1% from the 2022-end level.

Long-term debt was $3.1 billion as of Dec 31, 2023, up 0.9% from 2022 end.

Net cash provided by operating activities in 2023 was $1 billion, up 14.5% year over year.

Full-Year Highlights

Adjusted earnings were $2.81 per share, up 23.2% from 2022.

Total revenues of $4.3 billion improved 19.1% year over year. Commissions and fees increased 17.9%. Organic revenue growth was 10.2%.

Adjusted EBITDAC was $1.4 billion, in line with our estimate and up 23.1% from the 2022 level. Adjusted EBITDAC margin expanded 120 bps to 33.9%. Our estimate was 33.8%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

At this time, Brown & Brown has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.