Arthur J. Gallagher & Co. (AJG) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+19.7%

$334.02

vs $278.95 price

Levered DCF

$285.36

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

1.25

Distress zone

Rating

B-

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	44.39×	42.81×	49.86×	35.57×	37.96×	28.84×	26.45×	21.24×
P/B	2.89×	3.11×	4.48×	4.34×	4.04×	3.82×	3.44×	2.99×
P/S	4.83×	5.42×	4.8×	4.64×	4.19×	3.37×	2.49×	1.95×
EV / EBITDA	21.85×	19.72×	25.56×	20.76×	22.96×	17.08×	17.23×	15.89×
Gross margin	54.8%	42.2%	42.1%	42.1%	36.2%	35.8%	32.1%	28.0%
Operating margin	18.3%	19.8%	18.5%	19.5%	16.3%	14.8%	10.5%	8.9%
Net margin	10.7%	12.7%	9.6%	13.0%	11.0%	11.7%	9.4%	9.1%
Current ratio	1.06×	1.51×	1.03×	1.04×	1.06×	1.1×	1.02×	1.06×
Debt / equity	0.6×	0.67×	0.77×	0.7×	0.77×	0.79×	0.96×	0.8×
Interest coverage	3.99×	5.99×	6.27×	6.49×	5.91×	5.3×	4.15×	4.46×
Dividend yield	1.0%	0.8%	1.0%	1.1%	1.1%	1.5%	1.8%	2.2%
Payout ratio	44.6%	35.9%	48.8%	38.5%	43.2%	42.4%	48.0%	47.6%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	6.4%	7.3%	9.0%	12.2%	10.7%	13.2%	13.0%	14.1%
Return on invested capital	5.2%	5.1%	7.0%	8.0%	7.7%	8.2%	6.5%	6.7%
Return on assets	2.1%	2.3%	1.9%	2.9%	2.7%	3.7%	3.4%	3.9%
Free cash flow yield	2.6%	3.9%	3.8%	3.0%	4.6%	7.0%	5.5%	4.8%
Earnings yield	2.2%	2.3%	2.0%	2.8%	2.6%	3.5%	3.8%	4.7%
Enterprise value	$80B	$61.1B	$55.7B	$45.3B	$40.6B	$27.8B	$22.1B	$16.5B
Net debt / EBITDA	3.44×	-0.48×	3.37×	2.6×	3.5×	2.58×	3.39×	2.9×
Cash conversion cycle (days)	135	123	137	-1,254	-415	-272	-178	-138