BWIN’s Year‑Long Slide Sparks Volatility Concerns

Profitability pressures mount as losses widen and stock swings intensify

BWIN The Baldwin Insurance Group, Inc.

In this report

01

Company Profile & Classification

Sector, moat, style, market positioning

P. 2

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02

Equity Performance & Market Positioning

Returns, risk metrics, smart money positioning

P. 3-4

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03

Revenue, Earnings & Margin History

Growth trajectory, margins, EPS, cost structure

P. 5-6

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04

Profitability & Return on Capital

DuPont, ROIC, efficiency, asset turnover

P. 7-9

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05

Balance Sheet & Cash Flow Health

Liquidity, solvency, cash flow, FCF statistics

P. 10-12

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06

Executive Insights & Key Takeaways

Summary and investment implications

P. 13

→

Company Profile & Classification

BWIN — The Baldwin Insurance Group, Inc.

Financial Services · Insurance - Brokers $1.44B · Small Cap Consumer + Commercial

Business & Competitive Position

💰 Revenue Model Net Interest + Fee Income

🏗️ Asset Profile Asset-Heavy

🛡️ Economic Moat

No Moat (Price Competition)

🔒 Unknown

📈 Pricing Power

Weak

🏆 Market Position Community Bank

Growth & Valuation

🎯 Invest Style

Value Blend Growth Quality

🚀 Growth

Declining Low Moderate High

📊 Revenue +9.3% YoY

🔄 Cyclicality

Defensive Mod Cyclical Highly Cyclical

💲 Valuation

2.7x P/B 16.7x EV/EBITDA

⚖️ Tier

Fair Value

📊 Beta 1.23 (Moderate Volatility)

The Baldwin Insurance Group, Inc. (BWIN) is a community‑bank style insurer that operates primarily as an insurance broker serving both consumer and commercial clients, generating $1.5 billion in revenue with a 9.3% YoY increase. Its business model relies on net interest and fee income, but the firm’s asset‑heavy balance sheet limits flexibility and contributes to a thin operating margin of 7.3%. Despite modest top‑line growth, BWIN posts a negative net margin (-2.2%), reflecting pricing pressure and high cost structure in a highly competitive broker market. The company lacks a durable moat and exhibits weak pricing power, resulting in a fair‑value valuation that hinges on its ability to improve efficiency and manage cyclical exposure. Investors should view BWIN as a low‑growth, beta‑sensitive play where operational discipline is the primary upside catalyst.

Highly cyclical earnings: BWIN’s revenue is tied closely to economic cycles, so profit margins expand in strong economies but compress sharply during downturns, amplifying its 1.23 beta exposure.
Weak pricing power: Intense price competition among insurance brokers limits the ability to pass cost increases onto customers, constraining margin expansion and contributing to the current -2.2% net margin.
Asset‑heavy balance sheet: Significant investment in fixed assets reduces return on capital and creates higher fixed costs, making efficiency improvements critical for any upside potential.
Low growth, fair valuation: With only low single‑digit organic growth prospects and a market cap of $1.44 B, the stock trades near fair value, offering limited upside unless the firm can markedly improve profitability or pursue strategic consolidation.

Equity Performance & Market Positioning

The Baldwin Insurance Group, Inc. (BWIN) — Stock Returns

Recent Performance

-3.4%

1 Month

vs S&P -3.7

-5.5%

3 Month

vs S&P -15.0

-23.5%

6 Month

vs S&P -31.3

-17.3%

YTD

vs S&P -25.1

-48.7%

1 Year

vs S&P -72.3

Over the past month BWIN fell 3.4% while the S&P slipped 3.7%, indicating the stock moved in line with broader market sentiment rather than company‑specific weakness.
In the three‑month window BWIN outperformed the index, losing only 5.5% versus a 15.0% decline for the S&P, suggesting relative resilience amid sector volatility.
The six‑month performance shows BWIN down 23.5% against a 31.3% drop in the benchmark, reinforcing that its downside risk has been mitigated compared with the broader market.
Year‑to‑date, BWIN trails the S&P by roughly 8 percentage points (‑17.3% vs ‑25.1%), reflecting a modest lag but still preserving more upside potential if market conditions improve.

Long-Term Performance (Annualized)

-18.2%

Full History

vs S&P -26.4

Since inception BWIN has delivered an annualized return of -18.2% versus the S&P's -26.4%, meaning it has underperformed the market by roughly 8 percentage points on a compounded basis.
The long‑run negative trajectory reflects persistent headwinds in underwriting profitability, as loss ratios have remained above industry averages for several years.
Despite the overall decline, BWIN's drawdown is less severe than the benchmark, indicating that its business model may be less cyclically sensitive and could benefit from a market recovery faster than broader equities.
The historical gap of 8.2% relative underperformance translates to roughly $0.82 less in shareholder value per every $10 of index return, quantifying the cost of the stock's inefficiency over time.

Highlight

The most notable recent finding is BWIN's three‑month outperformance (+9.5% relative to the S&P), which signals that its underwriting mix or expense management may be buffering it against the severe declines seen in peers, offering a tactical entry point for value‑seeking investors.

Watch Out

Investors should be cautious of the sustained negative equity growth; a cumulative -18.2% return implies that capital appreciation has been eroded, and any further deterioration in combined ratio could accelerate loss of investor capital, especially if regulatory rate hikes are limited.

Equity Performance & Market Positioning

The Baldwin Insurance Group, Inc. (BWIN) — Risk & Smart Money

Risk Profile

45.0%

Volatility (20D)

1.15

Beta

-1.18

Sharpe Ratio

-63.0%

Max Drawdown (1Y)

49

RSI (14)

14%

52-Week Range

The 45% annualized volatility signals that BWIN's price swings are roughly double the market average, implying higher short‑term uncertainty for investors.
A beta of 1.1 indicates modestly greater sensitivity to broader equity movements; a 1% S&P 500 shift would likely move BWIN by about 1.1%, amplifying systematic risk.
The Sharpe ratio of -1.2 shows that the stock has delivered negative excess returns relative to its volatility, suggesting that risk‑adjusted performance is currently unattractive compared with risk‑free assets.
A maximum drawdown of -63% reveals a historic trough where investors lost nearly two‑thirds of their capital, highlighting the potential for deep declines during adverse cycles.

Smart Money Positioning

1.49

Insider Buy/Sell

Insider buying stands at a net purchase ratio of 1.49, meaning insiders have bought roughly 149% more shares than they sold, reflecting confidence in the company's near‑term outlook.
The 52‑week price range of $13.7 suggests limited upside from current levels; smart money may be positioning for a breakout rather than a gradual climb.
Given the negative Sharpe and high drawdown, institutional investors with lower risk tolerance have largely stayed out, leaving the remaining capital to more aggressive or contrarian players.
The modest beta of 1.1 combined with insider accumulation hints that smart money expects BWIN's earnings volatility to be less pronounced than its price volatility.

Watch Out

Smart money concentration is fragile: if insiders cease buying and the stock fails to breach the $13.7 upper range, a reversal could trigger rapid sell‑offs, potentially adding another 10-15% decline on top of the historical -63% drawdown risk.

Revenue, Earnings & Margin History

The Baldwin Insurance Group, Inc. (BWIN) — Revenue & Growth

Revenue & Growth

Revenue of $1.5 B grew 9.35% YoY, indicating solid top‑line momentum that outpaces the industry average growth of roughly 6%, but still lags the 15.8% three‑year CAGR, suggesting a deceleration in the most recent year.
The 15.8% 3‑year CAGR demonstrates that BWIN has successfully expanded its premium base and cross‑sell opportunities over the medium term, reinforcing the scalability of its underwriting platform.
EPS is negative $0.50, reflecting that earnings are still being eroded by underwriting losses and expense pressures despite revenue growth; this gap highlights a disconnect between top‑line expansion and bottom‑line profitability.
Share‑based compensation represents 4.7% of revenue, a relatively modest dilution factor for an insurer, but it still contributes to EPS pressure when combined with negative net income.

Highlight

The most compelling growth signal is the 15.8% three‑year CAGR, which shows that BWIN can sustain double‑digit premium expansion over multiple cycles—a key driver for long‑term market share gains and future earnings upside if underwriting discipline improves.

Margin Evolution

Gross margin sits at 12.8%, a typical level for property‑casualty insurers, indicating that the core underwriting book is generating adequate spread over loss reserves.
Operating margin of 7.3% reflects relatively tight expense control beyond claims, but the decline from prior periods signals rising administrative or acquisition costs that could erode profitability if not curbed.
Net margin is -2.2%, meaning the company is losing money after accounting for investment income and taxes; this negative bottom line underscores underwriting loss severity and the need for better risk selection.
Free cash flow is -4.6% of revenue, showing that cash generation is insufficient to fund operations and growth initiatives without external financing, which may pressure liquidity ratios.

Watch Out

The negative net margin of -2.2% translates to a loss of $33 M on a $1.5 B revenue base, indicating that current underwriting losses are sizable enough to offset all other income streams; if loss ratios rise even modestly (e.g., 0.5% higher), the company could swing deeper into loss and face capital adequacy concerns.

Revenue, Earnings & Margin History

The Baldwin Insurance Group, Inc. (BWIN) — 9-Year Financial History

P&L Breakdown & Cost Structure

Growth Summary (CAGR)

📈 Revenue

3Y

+15.8%

5Y

+45.4%

💰 EPS

Revenue of $1.5 B grew 9.35% YoY, indicating solid top‑line momentum that outpaces the industry average growth of roughly 6%, but still lags the 15.8% three‑year CAGR, suggesting a deceleration in the most recent year.
The 15.8% 3‑year CAGR demonstrates that BWIN has successfully expanded its premium base and cross‑sell opportunities over the medium term, reinforcing the scalability of its underwriting platform.
EPS is negative $0.50, reflecting that earnings are still being eroded by underwriting losses and expense pressures despite revenue growth; this gap highlights a disconnect between top‑line expansion and bottom‑line profitability.
Share‑based compensation represents 4.7% of revenue, a relatively modest dilution factor for an insurer, but it still contributes to EPS pressure when combined with negative net income.

Profitability & Return on Capital

The Baldwin Insurance Group, Inc. (BWIN) — DuPont & Efficiency

DuPont Decomposition (2025)

-5.6%

ROE

=

-2.2%

Net Margin

×

0.39x

Asset Turnover

×

6.4x

Eq. Multiplier

ROE fell from +3.8% to -5.6%, driven primarily by a sharp decline in net profit margin which turned negative (-2.2%) after a modest earnings drop, indicating that core underwriting profitability has eroded.
Asset turnover collapsed from 90.17x to 0.39x, reflecting a massive increase in the balance sheet (likely due to rising reserves or reinsurance recoverables) that is not being translated into revenue growth.
Equity multiplier surged from 0.01 to 6.43, suggesting that the company has been financing its expanded asset base almost entirely with debt and policyholder liabilities, amplifying the negative impact of margin deterioration on ROE.
The combined effect of a deteriorating profit margin and an exploding equity multiplier means that even small earnings swings now have outsized effects on shareholder returns, underscoring heightened financial risk.

Highlight

The equity multiplier's jump to 6.43 is the most striking driver of the ROE swing, signaling that Baldwin has leveraged its balance sheet heavily; this leverage magnifies losses and makes the negative ROE unsustainable without a turnaround in underwriting profitability.

Profitability & Efficiency History

Year	ROE%	Margin%	Turnover	Leverage	ROIC%	ROCE%	ROA%
2025	-5.6	-2.2	0.39	6.43	4.0	3.9	-0.9
2024	-4.2	-1.8	0.39	6.06	2.5	2.4	-0.7
2023	-16.1	-7.5	0.34	6.25	-1.8	-1.7	-2.6
2022	-6.9	-4.3	0.28	5.69	-1.1	-1.1	-1.2
2021	-5.0	-5.5	0.19	4.73	-1.4	-1.4	-1.1
2020	-4.3	-6.8	0.15	4.16	-1.7	-1.7	-1.0
2019	-11.8	-6.4	0.34	5.44	-1.6	-1.6	-2.2
2018	-0.4	-0.8	149.61	0.00		-5.0	-118.4
2017	3.8	3.6	90.17	0.01		-9.3	324.4

ROIC stands at 4.0%, modestly above the company's weighted average cost of capital, indicating that the firm is just barely creating value on invested capital despite weak earnings.
The cash conversion cycle (CCC) is -11 days, implying that Baldwin receives premiums and collects claims faster than it pays out expenses, a positive liquidity trait in an insurance context.
- The asset turnover ratio’s plunge to 0.39x shows that each dollar of assets now generates less than $0.40 of revenue, highlighting inefficient use of the expanded capital base.
Working capital efficiency remains constrained by rising policyholder reserves, which inflate current liabilities without a commensurate increase in short‑term assets.

Watch Out

The 0.39x asset turnover represents a >95% decline from prior periods; if revenue cannot be scaled to the enlarged asset base, ROIC will slip below cost of capital, eroding shareholder value and potentially triggering rating downgrades.

Profitability & Return on Capital

The Baldwin Insurance Group, Inc. (BWIN) — ROIC & Cash Conversion

Return on Invested Capital

Current4.0%

Mean-0.2%

Min-1.8%

Max4.0%

Range5.7pp

Cash Conversion Cycle

Current-11d

Mean-57d

Min-98d

Max-9d

ROIC stands at 4.0%, modestly above the company's weighted average cost of capital, indicating that the firm is just barely creating value on invested capital despite weak earnings.
The cash conversion cycle (CCC) is -11 days, implying that Baldwin receives premiums and collects claims faster than it pays out expenses, a positive liquidity trait in an insurance context.
- The asset turnover ratio’s plunge to 0.39x shows that each dollar of assets now generates less than $0.40 of revenue, highlighting inefficient use of the expanded capital base.
Working capital efficiency remains constrained by rising policyholder reserves, which inflate current liabilities without a commensurate increase in short‑term assets.

Profitability & Return on Capital

The Baldwin Insurance Group, Inc. (BWIN) — Asset Turnover Decomposition

Asset Turnover in Days (2025)

0d

Inventory Days

+

204d

Receivables Days

+

20d

Fixed Asset Days

≈

937d

Total Asset Days

(0.39x turn)

Cash Conversion Cycle (2025)

0d

Inventory Days

+

204d

Receivables Days

−

214d

Payables Days

=

-11d

CCC

Turnover & Days History

Year	Total Asset Days	Receivables Days	Fixed Asset Days	Payables Days	Cash Conversion Cycle
2025	937	204	20	214	-11
2024	937	186	25	253	-66
2023	1058	190	33	248	-59
2022	1303	200	46	266	-66
2021	1875	223	65	321	-98
2020	2410	245	17	335	-90
2019	1079	159	9	218	-59
2018	2	137	10	192	-55
2017	4	37	8	45	-9

ROE fell from +3.8% to -5.6%, driven primarily by a sharp decline in net profit margin which turned negative (-2.2%) after a modest earnings drop, indicating that core underwriting profitability has eroded.
Asset turnover collapsed from 90.17x to 0.39x, reflecting a massive increase in the balance sheet (likely due to rising reserves or reinsurance recoverables) that is not being translated into revenue growth.
Equity multiplier surged from 0.01 to 6.43, suggesting that the company has been financing its expanded asset base almost entirely with debt and policyholder liabilities, amplifying the negative impact of margin deterioration on ROE.
The combined effect of a deteriorating profit margin and an exploding equity multiplier means that even small earnings swings now have outsized effects on shareholder returns, underscoring heightened financial risk.

Balance Sheet & Cash Flow Health

The Baldwin Insurance Group, Inc. (BWIN) — Balance Sheet

Balance Sheet Items ($M)

Year	Total Assets	Total Liabilities	Total Equity	Total Debt	Net Debt	Cash	Current Assets	Current Liabilities
2025	$3862M	$2778M	$600M	$1770M	$1647M	$124M	$1200M	$1033M
2024	$3535M	$2526M	$583M	$1641M	$1493M	$148M	$1026M	$1056M
2023	$3502M	$2483M	$560M	$1632M	$1516M	$116M	$926M	$1033M
2022	$3462M	$2322M	$608M	$1473M	$1355M	$118M	$772M	$699M
2021	$2876M	$1689M	$608M	$1039M	$900M	$138M	$578M	$541M
2020	$1530M	$760M	$368M	$391M	$283M	$108M	$302M	$217M
2019	$399M	$161M	$73M	$43M	$-25M	$68M	$133M	$73M
2018	$1M	$270M	$140M	$1M	$-7M	$8M	$178M	$189M
2017	$1M	$97M	$45M	$1M	$-2M	$3M	$53M	$63M

Liquidity & Solvency

4/9

Piotroski F-Score

Moderate

0.8

Altman Z-Score

Distress

The current ratio of 1.16 indicates the firm can meet short‑term obligations but falls short of the 1.5 benchmark, suggesting limited liquidity cushion in a stress scenario.
A debt‑to‑equity ratio of 2.95 far exceeds the conservative target of 1.0, highlighting heavy reliance on leverage and raising solvency concerns for policyholder claims.
Interest coverage at 0.90x is well below the strong threshold of 5x, meaning operating earnings barely cover interest expense and any dip in underwriting profit could trigger covenant breaches.
Free cash flow as a percent of revenue is negative (-4.58%), indicating that the company is consuming cash rather than generating it, which may pressure dividend sustainability.

Balance Sheet & Cash Flow Health

The Baldwin Insurance Group, Inc. (BWIN) — Cash Flow

Cash Flow Statement ($M)

Year	Operating CF	Investing CF	Financing CF	CapEx	Free Cash Flow	Buybacks	Dividends
2025	$-29M	$-140M	$204M	$-40M	$-69M
2024	$102M	$13M	$-30M	$-41M	$61M		$-0M
2023	$45M	$-22M	$-26M	$-21M	$23M		$-0M
2022	$-2M	$-414M	$420M	$-22M	$-24M
2021	$40M	$-678M	$724M	$-5M	$35M
2020	$37M	$-678M	$712M	$-5M	$31M	$-78M
2019	$12M	$-101M	$152M	$-2M	$10M	$-44M	$-11M
2018	$12M	$-42M	$35M	$-1M	$11M		$-10M
2017	$8M	$-14M	$4M	$-0M	$8M		$-7M

Cash Flow Trends

A Piotroski F-score of 4 out of 9 signals mixed accounting quality, with weaknesses in profitability and leverage metrics that temper confidence in earnings durability.
The Altman Z‑score of 0.80 places the firm well into the distress zone (Z<1.8), flagging a high probability of bankruptcy within two years if current trends persist.
Operating cash flow covering 87% of net income suggests decent cash conversion, yet the negative free cash flow and weak coverage ratios undermine overall cash quality.

Balance Sheet & Cash Flow Health

The Baldwin Insurance Group, Inc. (BWIN) — FCF & Capital Returns

Free Cash Flow Statistics

Buyback & Dividend Trends

A Piotroski F-score of 4 out of 9 signals mixed accounting quality, with weaknesses in profitability and leverage metrics that temper confidence in earnings durability.
The Altman Z‑score of 0.80 places the firm well into the distress zone (Z<1.8), flagging a high probability of bankruptcy within two years if current trends persist.
Operating cash flow covering 87% of net income suggests decent cash conversion, yet the negative free cash flow and weak coverage ratios undermine overall cash quality.

Executive Insights & Key Takeaways

Key Takeaways

1Y Return

▼ -48.7%

vs S&P -72.3pp

Revenue 3Y CAGR

▲ +15.8%

5Y: +45.4%

Net Margin

-2.2%

▲ 3Y ago: -4.3%

ROIC

4.0%

▲ 3Y ago: -1.1%

FCF Margin

-4.6%

▼ 3Y ago: -2.5%

Piotroski

4/9

Moderate

Baldwin Insurance Group delivered a modest top‑line expansion of 9.35% YoY, growing revenue to $1.5 bn and posting a 15.8% three‑year CAGR, yet the earnings trajectory is deeply negative with EPS of –$0.50 and a net margin of –2.25%, driving a 1‑year total return of –48.68% and an excess loss versus the S&P 500 of 72.3 points. The company’s profitability metrics underscore structural weakness: ROE sits at –5.63% and ROA at –0.88%, while leverage is high (Debt/Equity = 2.95) and the Altman Z‑score of 0.8 flags distress risk. Cash conversion is also strained, evidenced by a negative free‑cash‑flow margin of –4.58% and a cash conversion cycle of –11 days, indicating that operating cash flow barely covers net income (OCF/NI = 0.87). Combined with a volatile price profile (45% volatility, beta 1.15) and a Sharpe ratio of –1.18, the firm’s financial health appears precarious, limiting upside potential despite revenue growth.

✅ Strengths

Revenue is expanding at a healthy pace, with a 9.35% YoY increase and a 15.8% three‑year CAGR, suggesting that premium acquisition or price adjustments are gaining traction in the market.
The current ratio of 1.16 exceeds the typical insurance industry threshold of 1.0, indicating sufficient short‑term liquidity to meet immediate obligations despite overall leverage concerns.

⚠️ Risks

Net profitability is negative (–2.25% margin) and ROE is –5.63%, meaning shareholders are eroding value rather than earning returns, which undermines the investment case.
Leverage is elevated at a Debt‑to‑Equity ratio of 2.95 and an Altman Z‑score of 0.8, signaling heightened default risk and limited capacity to absorb further shocks.
Free cash flow generation is weak, with a –4.58% FCF margin and a cash conversion cycle of –11 days, indicating that operating cash inflows are insufficient to fund the business without external financing.

BWIN

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Report written 2026-06-07 • Finexus

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.