Brown & Brown, Inc. (BRO): A Bull Case Theory

We came across a bullish thesis on Brown & Brown, Inc. on FluentInQuality’s Substack. In this article, we will summarize the bulls’ thesis on BRO. Brown & Brown, Inc.'s share was trading at $93.54 as of September 12th. BRO’s trailing and forward P/E were 26.96 and 19.19 respectively according to Yahoo Finance.

Brown & Brown (BRO) has established itself as a leading insurance brokerage with deep roots in risk management and insurance solutions. The company operates at the intersection of evolving coverage needs, shifting regulations, and constant risk, serving businesses that insure assets, families that protect wealth, and organizations that manage liability. Its operations are structured across four core segments: Retail, which covers business, personal, and employee benefits; Programs, which provide niche and specialty insurance; Wholesale Brokerage, which enables access to global markets; and Services, which include claims management and risk consulting.

Brown & Brown’s model is highly durable, as once embedded, its role is rarely replaced. Annual policy renewals and compounding trust through expertise underpin stable client relationships, while the business differentiates itself by providing not only premiums but also advice, service, and continuity.Growth is driven by recurring commission and fee revenues, cross-selling opportunities across industries, acquisitions of independent agencies, and the expansion of specialty and wholesale offerings. The company has consistently demonstrated strong execution, leveraging scale, specialization, and long-term relationships to deepen its market position.

With these recurring and predictable revenue streams, Brown & Brown generates significant free cash flow, reinforcing its position as a resilient compounder in a steady industry. While current valuations suggest the stock is trading around fair value, leaving little margin of safety, its cash flow strength, industry stability, and long-term compounding potential make it attractive for investors seeking durable growth and reliability. For the right investor profile, Brown & Brown could represent a best buy.

Previously we covered a bullish thesis on Brown & Brown, Inc. (BRO) by Bulls On Parade in April 2025, which highlighted the company’s disciplined acquisition strategy, consistent organic growth, and decentralized model driving long-term compounding power. The company’s stock price has depreciated approximately by 21.3% since our coverage. This is because valuation headwinds weighed on performance. The thesis still stands as BRO continues to demonstrate durable execution. FluentInQuality shares a similar view but emphasizes on recurring cash flow durability and industry resilience.

Brown & Brown, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held BRO at the end of the second quarter which was 32 in the previous quarter. While we acknowledge the potential of BRO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.