BRP Group Shares Jump After Q3 Revenue More Than Doubles
BRP Group shares jumped over 6% on Monday after the independent insurance distribution firm’s revenue more than doubled in the third quarter with organic revenue growth surpassing management’s previous forecast.
Tampa, Florida-based company reported quarterly adjusted earnings of $0.11 per share for the quarter ended in September, in line with the Wall Street consensus estimates. However, the company’s revenue surged 105.9% to $135.56 million from a year earlier, beating the market expectations of $129.54 million.
The company’s reported GAAP net loss of $13.7 million and GAAP loss per share of $0.18.
BRP Group shares ended 6.34% higher at $40.59 on Monday. The company’s shares had risen by more than 20% so far this quarter and gained over 35% so far this year.
“Share gainer in a fragmented market. Top-15 = 54% of broker market; outside top-15 has share< 1%. We model consolidated revenue CAGR of +70% through 2023; +27% through 2030. Differentiated M&A strategy that cultivates a strong growth culture. Equity used to partially finance M&A, earnouts based on revenue (vs EBITDA used by peers). Partnership revenue has accounted for 75% of total growth since 2019,” noted Michael W. Phillips, equity analyst at Morgan Stanley.
“Differentiated distribution, with MGA platform that allows for fast quoting and binding of renters’ policies. Use of property service providers and real estate agents helps identify the large base of customers than pure DTC model.”
BRP Group Stock Price Forecast
Five analysts who offered stock ratings for BRP Group in the last three months forecast the average price in 12 months of $37.25 with a high forecast of $43.00 and a low forecast of $29.00.
The average price target represents a -8.23% change from the last price of $40.59. From those five analysts, three rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $43 with a high of $70 under a bull scenario and $20 under the worst-case scenario. The firm gave an “Equal-weight” rating on the insurance distribution company’s stock.
Several other analysts have also updated their stock outlook. JP Morgan raised the target price to $42 from $36. KBW lifted the target price to $45 from $42. BofA upped the price objective to $36 from $34.
Technical analysis suggests it is good to buy now as 100-day Moving Average, and 100-200-day MACD Oscillator signals a strong buying opportunity.
Check out FX Empire’s earnings calendar