Shareholders of Ryan Specialty would probably like to forget the past six months even happened. The stock dropped 33.2% and now trades at $35.44. This might have investors contemplating their next move.
Following the pullback, is now an opportune time to buy RYAN? Find out in our full research report, it’s free.
Why Are We Positive on Ryan Specialty?
Founded in 2010 by insurance industry veteran Patrick Ryan, Ryan Specialty (NYSE: RYAN) is a wholesale insurance broker and underwriting manager that helps retail brokers place complex or hard-to-place risks with insurance carriers.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Ryan Specialty’s 23% annualized revenue growth over the last five years was incredible. Its growth surpassed the average business services company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Ryan Specialty’s full-year EPS grew at an astounding 16.2% compounded annual growth rate over the last four years, better than the broader business services sector.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Ryan Specialty has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the business services sector, averaging 17.5% over the last five years.
Final Judgment
These are just a few reasons why we’re bullish on Ryan Specialty. With the recent decline, the stock trades at 16.7× forward P/E (or $35.44 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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