TWFG, Inc. Class A (TWFG) AI Stock Analysis

• Market Cap: $1.26B
• Dividend Yield: N/A
• Average Volume (3M): 118.14K
• Price to Earnings (P/E): 29.8
• Beta (1Y): 0.27
• Revenue Growth: 19.19%
• EPS Growth: -37.56%
• Country: US
• Employees: 293
• Sector: Financial
• Sector Strength: 86
• Industry: Insurance - Brokers
• EPS (TTM): 0.19
• Shares Outstanding: 14,904,083
• 10 Day Avg. Volume: 119,605
• 30 Day Avg. Volume: 118,144
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.37
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.65
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $33.60
• Price Target Upside: 4.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

TWFG's strong financial performance and strategic corporate events highlight its growth potential and operational efficiency. However, a high P/E ratio and neutral technical indicators suggest caution in valuation and price momentum, moderating the overall score.

Positive Factors

Mergers and Acquisitions

TWFG announced two corporate location acquisitions and that its M&A financials are in line with prior expectations.

Revenue Growth

TWFG remains on track to grow revenues and earnings at roughly 20% for 2025 and beyond.

Tax Structure Benefits

TWFG's Up-C tax structure should allow it to better attract M&A, materially benefiting EBITDA growth for the foreseeable future.

Negative Factors

Guidance Shortfall

Woodlands' 2025 guidance came in well below on adj EBITDA margins and more modestly below on organic growth and total revenue growth.

Other Income Decline

Other income of $0.3 million decreased ~62% YoY, and came in below consensus of $1.5 million.

Product Availability Concerns

Investors will be looking for clues on how growth in California, TWFG's second largest state, could play out given a likely lack of product availability post-recent fires.

TWFG, Inc. Class A Business Overview & Revenue Model

Company Description

TWFG, Inc. operates an independent distribution platform for personal and commercial insurance products in the United States. Its personal and commercial insurance products include auto, home, renters, life, health, motorcycle, umbrella, boat, recreational vehicle, flood, wind, event, luxury item, general liability, property, business auto, workers' compensation, business owner policy, and professional liability insurance products, as well as commercial bonds and group benefits. The company was founded in 2001 and is based in The Woodlands, Texas. TWFG, Inc. operates as a subsidiary of Bunch Family Holdings, LLC.

How the Company Makes Money

TWFG, Inc. generates revenue primarily through the sale of insurance policies. The company earns premiums from policyholders, which form the core of its revenue stream. Additionally, TWFG may also gain income from investment activities, as insurance companies often invest the premiums they collect to generate returns. The company might have partnerships with various underwriters and reinsurers to manage risk and enhance its service offerings, though specific details on these partnerships are unavailable.

TWFG, Inc. Class A Financial Statement Overview

Summary

TWFG exhibits strong financial health with improvements in revenue growth, profitability, and cash flow metrics. Key strengths include significant revenue and margin growth, improved equity ratios, and strong cash generation. However, the impressive growth rates may partially reflect past underperformance and reduced leverage might limit benefits in growth scenarios.

Income Statement

TWFG demonstrated strong revenue growth of 22% year-over-year, moving from $166.99M to $203.76M. The gross profit margin improved significantly, indicating enhanced efficiency in managing costs, moving from 18.87% to 85.74%. Net profit margin also increased markedly from 2.47% to 14.03%, reflecting improved profitability. Both EBIT and EBITDA margins showed healthy improvements, underscoring operational efficiency. However, the prior year had a lower base, which might have contributed to the impressive growth percentage.

Balance Sheet

TWFG's balance sheet shows a solid equity ratio of 22.84%, suggesting a stable financial position with a manageable level of liabilities. The debt-to-equity ratio decreased significantly from 1.67 to 0.09, indicating reduced leverage. Return on equity improved from 13.31% to 38.71%, demonstrating an enhanced ability to generate returns from shareholder investments. However, the reduced debt levels might limit leverage benefits in certain growth scenarios.

Cash Flow

TWFG's free cash flow increased from $14.51M to $37.28M, indicating robust cash generation capabilities. The operating cash flow to net income ratio was strong at 1.42, reflecting efficient cash conversion. The free cash flow to net income ratio was 1.30, highlighting effective free cash flow generation relative to net income. The significant improvement in free cash flow growth and cash flow ratios suggests a strong operational cash generation capacity, though capital expenditures did see a decline.

Breakdown
Dec 2024	Dec 2023	Dec 2022
Income Statement		Total Revenue
203.76M	166.99M	147.78M
	Gross Profit
174.70M	31.51M	30.23M
	EBIT
27.93M	21.61M	23.76M
	EBITDA
44.33M	26.46M	27.05M
	Net Income Common Stockholders
28.59M	4.13M	20.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
195.77M	39.30M	22.33M
	Total Assets
323.43M	115.44M	114.15M
	Total Debt
6.30M	51.76M	13.31M
	Net Debt
-189.47M	12.46M	-9.02M
	Total Liabilities
48.14M	84.39M	56.37M
	Stockholders Equity
73.88M	31.05M	57.79M
Cash Flow		Free Cash Flow
37.28M	14.51M	13.48M
	Operating Cash Flow
40.48M	30.15M	25.75M
	Investing Cash Flow
-25.05M	-14.65M	-14.50M
	Financing Cash Flow
143.43M	-9.70M	-15.26M

TWFG, Inc. Class A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TWFG, the sentiment is Positive. The current price of 32.05 is below the 20-day moving average (MA) of 32.23, above the 50-day MA of 31.04, and above the 200-day MA of 29.62, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 51.86 is Neutral, neither overbought nor oversold. The STOCH value of 56.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TWFG.

TWFG, Inc. Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TWFG	77 Outperform	$1.26B	29.83	31.05%	―	19.19%	-37.56%
Sector *	64 Neutral	$12.54B	9.79	7.92%	16985.69%	12.58%	-6.07%
EHTH	54 Neutral	$141.93M	―	3.19%	―	17.04%	74.07%
ZBAO	52 Neutral	$35.31M	12.04	48.31%	―	80.80%	―
TIRX	51 Neutral	$14.62M	―	-12.03%	―	158.74%	14.86%
HUIZ	48 Neutral	$21.79M	11.44	-0.10%	―	2.63%	-101.10%
RELI	42 Neutral	$3.45M	―	-178.85%	―	2.35%	80.94%

TWFG, Inc. Class A Corporate Events

TWFG, Inc. Expands with New Acquisitions and VP Appointment

On May 1, 2025, TWFG, Inc. announced the acquisition of two agencies, one in Texas and one in North Carolina, and the appointment of Denise Davis as Vice President of Retail Operations. This strategic move is expected to enhance TWFG’s operational scale and efficiency across its 500 locations in 33 states, with Denise Davis bringing her industry expertise to the role. The acquisition of Paul Mears Insurance Group, Inc. expands TWFG’s presence in North Carolina, increasing its locations in the state to nine, while the leadership team at Paul Mears will continue to focus on growth.

Spark’s Take on TWFG Stock

According to Spark, TipRanks’ AI Analyst, TWFG is a Outperform.

TWFG’s strong financial performance, characterized by robust revenue and profitability growth, underpins a positive outlook. Technical analysis supports a bullish trend, although potential overbought conditions warrant caution. The high P/E ratio suggests the stock may be overvalued, impacting the overall score. Continuous financial monitoring and market condition assessment are essential for sustained performance.

To see Spark’s full report on TWFG stock, click here.

TWFG, Inc. Approves New Incentive Plan Awards

On March 31, 2025, TWFG, Inc. announced the approval of new forms of restricted stock unit (RSU) and performance stock unit (PSU) award agreements under its 2024 Omnibus Incentive Plan. These awards are designed to incentivize key executives, including the CEO, CFO, and COO, by tying their compensation to the company’s financial performance and long-term service. The RSUs vest over three years, while the PSUs are contingent on achieving specific EBITDA and revenue goals over a two-year period, with provisions for early vesting in the event of a change in control or qualifying termination.

Spark’s Take on TWFG Stock

According to Spark, TipRanks’ AI Analyst, TWFG is a Outperform.

TWFG’s strong financial performance and strategic resilience, particularly in revenue and geographical expansion, are key strengths. The technical analysis shows stability with slight upward momentum. Valuation suggests the stock is fairly priced, albeit without a dividend yield. Earnings call insights underscore strategic growth initiatives and resilience despite operational challenges, leading to a solid overall score.

To see Spark’s full report on TWFG stock, click here.