Ryan Specialty Gains 2.2% on Solid Q3 Results, Raises Outlook


Shares of Chicago-based Ryan Specialty Group Holdings, Inc. (RYAN) jumped 2.2% in the extended trading hours on Thursday after the company reported strong financial results for the third quarter of 2021.

Ryan Specialty acts as a wholesale broker and managing underwriter to provide specialty products and solutions like distribution, underwriting, product development, administration and risk management services for insurance brokers, agents and carriers.

Earnings and Revenue

The company reported adjusted earnings of $0.24 per share, beating the Street’s estimate of $0.18 per share. (See Insiders’ Hot Stocks on TipRanks)

Total revenue grew 49% year-over-year to $352.8 million, exceeding analysts’ expectations of $321.85 million. The increase was driven by new client wins, expanded relationships with existing clients, overall expansion of the E&S (Excess & Surplus) market, and premium rate increases.

Segment Revenues

Wholesale Brokerage net commissions and fees rose 48.3% year-over-year to $229.1 million; net commissions and fees of the Binding Authority segment jumped 46.1% to $52.8 million; and Underwriting Management net commissions and fees surged 53.4% to $70.7 million.

The rise in all the segments was primarily due to revenue from the All Risks acquisition and strong organic growth.

CEO Comments

The Chairman and CEO of Ryan Specialty, Patrick G. Ryan, said, “We delivered a very strong financial performance across the board, with organic revenue growth for the quarter eclipsing 28% driven by our extraordinary talent, differentiated platform, ongoing broker consolidation, and a robust E&S market. In addition, our platform’s scalability facilitated another quarter of improved margins on a year-over-year basis.”

Outlook

Following excellent third-quarter results, the company raised its guidance for full-year 2021. It now expects organic revenue growth in the range of 21.5% to 22.5%, compared to the earlier projection of 18% to 20%.

Analyst Recommendation

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 4 Holds. The average Ryan Specialty Group Holdings price target of $34.75 implies 8.7% downside potential. Shares have gained 38.4% over the past year.

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