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On Thursday, Keefe, Bruyette & Woods maintained a Market Perform rating for TWFG Insurance (NASDAQ:TWFG) with a steady price target of $32.00. The decision followed the company’s announcement of its fourth-quarter earnings, which surpassed both Keefe, Bruyette & Woods and consensus estimates. TWFG Insurance reported an Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (AEBITDA) of $13.8 million, notably higher than the anticipated $10.9 million by Keefe, Bruyette & Woods and the $8.5 million consensus.
The firm’s organic revenue growth reached 20.5%, aligning with the previously reported preliminary range of 20-21%. Looking ahead, TWFG Insurance has set forth an FY25 outlook that projects 11-16% organic growth, with Keefe, Bruyette & Woods estimating 13% and the consensus at 14%. Additionally, the company forecasts 14-21% total revenue growth, with Keefe, Bruyette & Woods and consensus estimates at 14% and 15%, respectively. The expected AEBITDA for the same period is projected to be between $45-53 million, slightly below Keefe, Bruyette & Woods’ $54 million estimate and in line with the $53 million consensus.
Despite the robust performance in the fourth quarter, the analyst pointed out that the margin, which was slightly lower than expected, could potentially impact the stock’s performance. The analyst’s commentary highlighted the strong quarter but also indicated the need for cautious observation of the margin’s effect on the stock’s future movement.
TWFG Insurance’s financial results demonstrate solid growth and a positive trajectory for the future, as indicated by the company’s FY25 outlook. The company’s performance in the fourth quarter and the projections for the coming years reflect its strong position in the market. Keefe, Bruyette & Woods’ reiteration of the Market Perform rating and $32.00 price target suggests a recognition of TWFG Insurance’s steady performance while also acknowledging the potential challenges that may arise from the lower-than-expected margin.
In other recent news, TWFG Insurance has seen significant developments concerning its financial outlook and analyst ratings. BMO Capital Markets recently raised its price target for TWFG Insurance to $32, up from $30, while maintaining an Outperform rating. This adjustment follows the company’s preannouncement of fourth-quarter 2024 results, which exceeded expectations due to increased written premiums and organic commissions. BMO Capital also adjusted the fourth-quarter 2024 adjusted EBITDA estimate upward by approximately 6% to $9.0 million, reflecting confidence in TWFG’s continued growth.
Meanwhile, JPMorgan has downgraded TWFG Insurance from Overweight to Neutral, despite increasing the price target to $33 from $30. The firm noted TWFG’s strong cash conversion, minimal debt, and operational stability, attributing these strengths to a flexible platform for agents. However, JPMorgan highlighted potential risks related to TWFG’s geographic concentration and founder-centric control. They anticipate high-teens revenue growth past 2026, driven by organic growth and mergers and acquisitions. Despite acknowledging favorable operating conditions, JPMorgan believes that the upside potential is already reflected in the revised price target.
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