Initiated 2026-09-28 (re-initiation of the same-day aggregator-built report) · Price $38.12 (as of 2026-09-28 close, stockanalysis.com) · Mkt cap $9.75bn · Financials / insurance intermediaries (wholesale and delegated authority) · Model: verified

Rating: Hold — Conviction: Low

Ryan Specialty is a good franchise. It still grows organically at 6.7% while the largest listed wholesale competitor's specialty unit shrinks. But on filed numbers the stock is not cheap: 18.2x GAAP EBITDA, with net debt 4.5x that EBITDA. The model's base case lands on today's price, so the market is already paying for mid-single-digit growth and a margin recovery. The earlier same-day Buy rested on an aggregator EBITDA about 14% above what the 10-K reports.

Conviction tests (3a-v-c): T1 fail — Hold → Buy at −1pp (base +17.8%); −16.5% at +1pp stays Hold · T2 pass · T3 pass · T4 pass

Model value range vs price
Bear $16.53Base $37.27Bull $60.27Price $38.12

Business overview

Ryan Specialty places hard-to-place commercial risks for retail brokers. Wholesale brokerage was about 55% of Q2 2026 revenue. It also underwrites for insurers through MGUs and programs (underwriting management, ~34%) and binds small risks under delegated authority (binding authority, ~11%). Filed revenue grew about 20% a year from FY2021 to FY2025, to $3.05bn, helped by $1.71bn of acquisitions in 2024 and $746mm in 2025. H1 2026 revenue rose 10.8%. Q2 organic growth was 6.7%, and FY2026 organic growth is guided to mid-single digits with the adjusted EBITDAC margin down 50–100bp. Earnings turn on E&S premium flow and rates (property falling, casualty firmer), producer compensation, and interest on $3.63bn of debt.

Competition

The competitors that matter are Amwins and CRC (both private) and Brown & Brown's Specialty Distribution segment. Brown & Brown's specialty unit reported organic revenue down 3.5% in Q2 2026 (10-Q, quarter to 2026-06-30), as catastrophe property rates fell 15–35%. Its segment margin fell 400bp. Ryan grew 6.7% in the same quarter, which points to share gains in casualty and underwriting management. Pressure shows up first in property commissions, then in casualty and binding authority. On stockanalysis TTM EV/EBITDA (2026-09-28), Brown & Brown trades at 9.5x, WTW at 11.6x and Gallagher at 16.7x; Ryan is 14.8x on the same page. Brown & Brown's 9.5x reflects its own organic stall, so it is a floor, not a fair comparable.

Bull case

  1. E&S flow proves structural. Casualty business keeps moving into the E&S channel and underwriting management keeps compounding. Organic growth stays near high single digits and today's multiple holds. Plays out if casualty rate increases persist and property declines bottom in 2027. Model: rev_growth, exit_ev_ebitda
  2. Margin recovers past 2025. The Empower restructuring ($33.4mm in Q2 alone) and the integration of the 2024–25 MGU acquisitions lift GAAP EBITDA margin from ~24% in 2026 toward 28%. Plays out if the adjusted margin stabilizes after 2026 and restructuring charges stop. Model: ebitda_margin
  3. Deleveraging. Cash flow cuts net leverage from 4.5x toward ~2.2x by FY2030 in the base path. Model: not in the value range — in this module debt paydown moves EPS and the net-cash path only; value uses FY0 net debt.

Bear case

  1. The soft market spreads. Cat property rates keep falling and standard carriers pull casualty back from E&S, so revenue stalls in 2027. Plays out if Ryan's organic growth falls below 3% in Q3–Q4 2026. Model: rev_growth, wacc
  2. Operating deleverage. Producer compensation is sticky, so flat revenue takes the GAAP margin back to ~22%, the FY2022–FY2024 level. Plays out if the FY2026 adjusted margin cut exceeds 100bp. Model: ebitda_margin
  3. A diversified-broker multiple. A levered wholesaler without growth trades like Brown & Brown or WTW. Model: exit_ev_ebitda

Valuation & balance sheet

Metric (definition) Current Own history (range or 5y avg) Peers Source, as-of
EV/EBITDA, aggregator (TTM, adjusted-style EBITDA $909mm) 14.8x n/a (unverified) BRO 9.5x · WTW 11.6x · AJG 16.7x stockanalysis.com, 2026-09-28
EV/EBITDA, model basis (EV $14.19bn incl. $464mm TRA; filed GAAP EBITDA; leases excluded) 18.2x FY2025 · 18.6x TTM n/a n/a (peers not restated) model-inputs.json, 10-K, Q2 release
Forward P/E (stockanalysis consensus, adjusted EPS) 16.6x n/a (unverified) BRO 13.1x · WTW 14.0x · AJG 16.5x stockanalysis.com, 2026-09-28
FCF yield (OCF − capex, FY2025) 5.6% ($576mm); 4.8% after tax distributions and TRA payments $264mm–$576mm FY2021–FY2025 n/a FY2025 and FY2023 10-K cash flows

Model-implied value range (from model-summary.json; generic module, Gordon-growth DCF and exit-EV/EBITDA DCF, midpoints): Bear $16.53 · Base $37.27 · Bull $60.27 per share, i.e. implied returns of −56.6% / −2.2% / +58.1% vs $38.12. These ranges show how the bull and bear drivers translate into value; they are not price targets. The price sits on the base case, halfway between bear and bull, so the market prices neither the spreading soft market nor a return to high-single-digit organic growth. The base exit of 15x is a 17.5% de-rating from 18.2x FY2025 (19% from 18.6x TTM). The two methods agree within 4% (Gordon $37.96, exit $36.58), so neither embeds a re-rating.

Tail. Wholesale brokerage is ~55% of revenue, so a harsher bear was run on a scratch copy: revenue +5% / −4% / −2% / +2% / +3%, GAAP EBITDA margin 22.5% falling to 19–20%, NWC −3% of revenue, a 10x exit and a 10% WACC. It gives $6.23 (−83.7%). Leverage makes the tail steep.

Balance sheet: net leverage 4.5x FY2025 GAAP EBITDA (model Credit), coverage 3.6x. Liquidity: $140mm cash (excluding fiduciary funds) plus $1,043mm undrawn on the $1.4bn revolver. Debt at principal is $3,632mm: the term loan B ($1,675mm), revolver draw ($357mm), 4.375% secured notes due February 2030 ($400mm) and 5.875% secured notes due 2032 ($1.2bn). The nearest material maturity is the 2030 notes; the revolver and term loan maturities weren't retrieved (2029 and 2031 assumed). TRA liabilities are $464mm. Ratings: n/a (unverified).

Model note:

Scenario stress test

Reasoned from the bull/bear drivers above. The model column comes from the scenario overlays (Base case + shock).

Scenario Effect Mechanism Magnitude Model Δ value vs Base ($/sh)
S1 Fast equity crash − Market de-rating of a levered roll-up; no operating channel Med −$3.31
S2 Slow bear / recession − Exposure units (payroll, construction, transport) shrink while rates hold. About 30% of Base − Bear ($20.74), because a recession is a transitory exposure hit and the bear case is a permanent soft market High −$6.24
S3 Rapid rate shock − Higher discount rate; floating term loan and revolver cost more; fiduciary income rises slightly (not modeled) High −$6.48
S4 Slow rate grind − Same channel, grinding Med −$4.09
S5 Soft-landing cuts + Lower rates on a levered balance sheet; exposure growth intact High +$8.25
S6 Recession-driven cuts − Exposures shrink and fiduciary income falls, only partly offset by lower rates Low −$0.39
S7a Credit liquidity shock − Leveraged-loan spreads gap wider on a ~4.5x-levered secured structure; forced selling Med −$3.31
S7b Slow default cycle − Refinancing cost rises; insured small-business exposures shrink Med −$3.40
S8 Stagflation + Loss-cost inflation pushes premium rates and commissions up; a higher discount rate partly offsets Low +$2.01
S9a Dollar spike − Small UK and European operations translate lower Low −$0.24
S9b Dollar slide + Mirror of S9a Low +$0.24
S10 Melt-up + Beaten-down growth financials re-rate Low +$2.49
S11 Energy supply shock ± Energy and marine premium rates rise; costs offset Low +$0.22
S12 Mega-cap/AI derating 0 No material effect, not modeled; not AI-linked — $0.00

Currently active/on watch per the playbook: state.md lists S3 as partially active; the macro log records all three legs crossed from 2026-09-24 (10Y 5.17% on 2026-09-25). S8, S10 and S11 are on watch. S3 is High here; S8, S10 and S11 are Low.

Model value change vs Base, by scenario
S3 Rapid rate shock−$6.48S2 Slow bear / recession−$6.24S4 Slow rate grind−$4.09S7b Slow default cycle−$3.40S1 Fast equity crash−$3.31S7a Credit liquidity shock−$3.31S6 Recession-driven cuts−$0.39S9a Dollar spike−$0.24S12 Mega-cap/AI derating$0.00S11 Energy supply shock+$0.22S9b Dollar slide+$0.24S8 Stagflation+$2.01S10 Melt-up+$2.49S5 Soft-landing cuts+$8.25

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