Baldwin Insurance Group has gotten torched over the last six months - since October 2025, its stock price has dropped 24.2% to $21.95 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Is there a buying opportunity in Baldwin Insurance Group, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Baldwin Insurance Group Not Exciting?
Despite the more favorable entry price, we're cautious about Baldwin Insurance Group. Here are two reasons why BWIN doesn't excite us and a stock we'd rather own.
1. Free Cash Flow Margin Dropping
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Baldwin Insurance Group’s margin dropped by 9.4 percentage points over the last five years. Almost any movement in the wrong direction is undesirable because it is already burning cash. If the trend continues, it could signal it’s becoming a more capital-intensive business. Baldwin Insurance Group’s free cash flow margin for the trailing 12 months was negative 4.6%.
2. High Debt Levels Increase Risk
Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency.
Baldwin Insurance Group’s $3.31 billion of debt exceeds the $346.9 million of cash on its balance sheet. Furthermore, its 9× net-debt-to-EBITDA ratio (based on its EBITDA of $341.5 million over the last 12 months) shows the company is overleveraged.
At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company’s rating if profitability falls. Baldwin Insurance Group could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies.
We hope Baldwin Insurance Group can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt.
Final Judgment
Baldwin Insurance Group isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 11.1× forward P/E (or $21.95 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now. We’d recommend looking at the most dominant software business in the world.
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