Investment Thesis
Aon exhibits strong fundamentals with exceptional 34.1% operating margins and 9.4% revenue growth, supported by 36.3% EPS expansion and excellent 11.9x interest coverage. However, tight liquidity (1.07x current ratio) and modest free cash flow conversion (7.2%) require monitoring.
Strengths
- Exceptional operating margin of 34.1% demonstrates superior pricing power and operational efficiency in insurance brokerage
- Strong EPS growth of 36.3% YoY significantly outpacing 9.4% revenue growth indicates operational leverage
- Excellent interest coverage ratio of 11.9x with manageable debt-to-equity of 1.38x provides financial stability
- Consistent free cash flow generation of $363M supports reinvestment and shareholder distributions
Risks
- Tight current ratio of 1.07x provides limited liquidity cushion for operational disruptions
- Moderate leverage with $13.5B long-term debt and $1.2B cash position limits financial flexibility
- Low free cash flow margin of 7.2% indicates capital-intensive operations relative to profitability
Key Metrics to Watch
- Operating cash flow sustainability and free cash flow margin expansion
- Current ratio and working capital trends indicating liquidity health
- Debt service coverage and leverage trajectory under various economic scenarios
Financial Metrics
Revenue
5.0B
Net Income
1.2B
EPS (Diluted)
$5.63
Free Cash Flow
363.0M
Total Assets
51.4B
Cash
1.2B
Profitability Ratios
Gross Margin
N/A
Operating Margin
34.1%
Net Margin
24.1%
ROE
12.3%
ROA
2.4%
FCF Margin
7.2%
Balance Sheet & Liquidity
Current Ratio
1.07x
Quick Ratio
1.07x
Debt/Equity
1.38x
Debt/Assets
80.6%
Interest Coverage
11.91x
Long-term Debt
13.5B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T19:22:57.088008 |
Data as of: 2026-03-31 |
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