Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 7.2 |
| EV/EBITDA | 1.2 |
| Fwd P/E | 6.8 |
| PEG | 7.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 18.9x
- ▸PEG: 0.99
AJG · Why this verdict
Why Arthur J. Gallagher & (AJG) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Arthur J. Gallagher is a fast-growing insurance broker (26% YoY growth) with strong momentum and positive news sentiment, but the stock trades above the analyst target at a rich 18.7x forward earnings.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Growth is strong at 26% YoY, with the revenue growth component at 9.0/10 and earnings growth at 10.0/10. Growth breakdown | Revenue and earnings growth stay above 15% YoY over the next 12 months. | ↑Improving |
| CounterMuch of broker growth comes from acquisitions, which may slow if deal pricing rises or financing tightens. | ||
With upside of -5.0%, the $276.07 price is 5.0% above the $262.30 analyst target, and downside to the stop is 15.0%. Estimated upside | Analyst targets rise toward the price or the stock pulls back toward the $260.43 stop. | →Stable |
| CounterA cluster of analysts is raising targets, and strong news sentiment may keep lifting estimates. | ||
Forward P/E of 18.7x with a PEG of 0.99 scores only 4.9/10 on value, and value rank versus peers is low at 1.5. Valuation breakdown | Earnings growth brings forward P/E back below 17x without a price decline. | →Stable |
| CounterBrokers typically trade at premium multiples for recurring commission revenue and consistent compounding. | ||
Momentum scores 8.3/10 on a volume surge of 2.0x the average on an up move, but the RSI of 79 and a flat 200-day average point to late-cycle distribution risk. Momentum breakdown | RSI falls below 70 while the price holds above the 200-day average. | ↑Improving |
| CounterHeavy volume on up moves indicates accumulation, and high RSI readings can persist in strong trends. | ||
Insiders sold about $7.56M across 4 sales with no buying in 90 days, and implied volatility is 95%. Total sell value 90d | Insider net selling slows and implied volatility falls below 60%. | →Stable |
| CounterThe sales equal only 0.011% of market cap, so they are small and may be routine diversification. | ||
Growth is strong at 26% YoY, with the revenue growth component at 9.0/10 and earnings growth at 10.0/10.
↑ImprovingGrowth breakdown
- Expectation
- Revenue and earnings growth stay above 15% YoY over the next 12 months.
CounterMuch of broker growth comes from acquisitions, which may slow if deal pricing rises or financing tightens.
With upside of -5.0%, the $276.07 price is 5.0% above the $262.30 analyst target, and downside to the stop is 15.0%.
→StableEstimated upside
- Expectation
- Analyst targets rise toward the price or the stock pulls back toward the $260.43 stop.
CounterA cluster of analysts is raising targets, and strong news sentiment may keep lifting estimates.
Forward P/E of 18.7x with a PEG of 0.99 scores only 4.9/10 on value, and value rank versus peers is low at 1.5.
→StableValuation breakdown
- Expectation
- Earnings growth brings forward P/E back below 17x without a price decline.
CounterBrokers typically trade at premium multiples for recurring commission revenue and consistent compounding.
Momentum scores 8.3/10 on a volume surge of 2.0x the average on an up move, but the RSI of 79 and a flat 200-day average point to late-cycle distribution risk.
↑ImprovingMomentum breakdown
- Expectation
- RSI falls below 70 while the price holds above the 200-day average.
CounterHeavy volume on up moves indicates accumulation, and high RSI readings can persist in strong trends.
Insiders sold about $7.56M across 4 sales with no buying in 90 days, and implied volatility is 95%.
→StableTotal sell value 90d
- Expectation
- Insider net selling slows and implied volatility falls below 60%.
CounterThe sales equal only 0.011% of market cap, so they are small and may be routine diversification.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.4 |
| ROA | 1.7 |
| Gross margin | 4.8 |
| Op margin | 8.3 |
| Net margin | 5.4 |
| Current ratio | 4.2 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
8.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.7 |
| EPS growth | 10.0 |
- ▸Strong growth: 21% YoY
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 4.9 |
- ▸Overbought (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.9 |
| Analyst rating | 7.4 |
| Price target | 6.1 |
Insider
4.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.7 |
| notable moves | 5.0 |
- ▸Insider selling (low materiality) — $7,563,014 (0.011% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.8 |
| quality rank | 3.0 |
| growth rank | 6.7 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.2 |
| support resistance | 1.5 |
| 52w position | 7.6 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 5.7 |
| volatility | 5.0 |
| put call | 6.0 |
| implied vol | 6.4 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 7.6 |
- ▸Above max pain $125
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.50
- EARNINGS_PROXIMITY:86d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.20
Upside
-3.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.4>=5.5. Top dim: Growth at 8.8; weakest: Technical at 3.8. No conviction either direction.
The strongest dimensions are Growth at 8.8, Momentum at 7.4, and Sentiment at 6.5; the weakest are Technical at 3.8, Peer rank at 4.4, and Insider at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.20 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Growth Profile
Trip ifRevenue growth falls below 10% YoY for 2 consecutive quarters.
- P2Price Above Analyst Target
Trip ifShare price rises above $300 while the analyst target stays below $265, a gap of more than 12%.
- P3Rich Valuation
Trip ifForward P/E rises above 22x from current 18.7x.
- P4Overbought Strong Momentum
Trip ifShare price falls below the $260.43 stop level, a drop of more than 5.7%.
- P5Insider Selling And Options Risk
Trip ifInsider selling exceeds $20M over 90 days.