Assured Guaranty (AGO) AI Stock Analysis

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Assured Guaranty

(NYSE:AGO)

63Neutral

Assured Guaranty's stock score reflects a balance of strong financial recovery and strategic initiatives against challenges like high leverage and cash flow volatility. While technical indicators show potential bearish momentum, the company's strategic expansion and record financial performance provide a basis for optimism. However, increased loss expenses and declining income highlight underlying risks.

Assured Guaranty (AGO) vs. S&P 500 (SPY)

Market Cap

$3.99B

Dividend Yield1.59%

Average Volume (3M)442.95K

Price to Earnings (P/E)11.4

Beta (1Y)0.78

Revenue Growth-4.43%

EPS Growth-45.42%

CountryUS

Employees361

SectorFinancial

Sector Strength86

IndustryInsurance - Specialty

Share Statistics

EPS (TTM)6.82

Shares Outstanding49,938,797

10 Day Avg. Volume438,341

30 Day Avg. Volume442,948

Financial Highlights & Ratios

PEG Ratio0.10

Price to Book (P/B)N/A

Price to Sales (P/S)4.93

Price to Cash Flow (P/CF)23.30

P/FCF Ratio23.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$107.50

Price Target Upside33.06% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Assured Guaranty Business Overview & Revenue Model

Company DescriptionAssured Guaranty Ltd. (AGO) is a leading financial guaranty insurance company, primarily engaged in providing credit protection products to public finance, infrastructure, and structured finance sectors. The company's core products include municipal bond insurance, which enhances the creditworthiness of bonds issued by municipalities and other governmental entities, as well as structured finance products that help manage risk and improve financial flexibility for its clients.

How the Company Makes MoneyAssured Guaranty makes money primarily by charging premiums for providing financial guaranty insurance on bonds and other financial obligations. When the company insures a bond, it guarantees the payment of principal and interest to investors in case of default, thereby enhancing the bond's credit rating and reducing borrowing costs for issuers. AGO earns revenue from the upfront and installment premiums paid by issuers of the insured bonds. Additionally, the company invests the premiums it receives, generating investment income which contributes to its overall earnings. Significant factors that contribute to AGO's revenue include the volume of new insurance policies underwritten, prevailing interest rates affecting investment income, and the credit environment influencing demand for its products.

Assured Guaranty Financial Statement Overview

Summary

Assured Guaranty showed resilience in revenue recovery and profitability in 2023, but faces challenges with high leverage and cash flow volatility. The balance sheet reflects strong equity but is offset by considerable debt levels.

Income Statement

Positive

The revenue has shown inconsistency, with a decline from 2020 to 2022, but a rebound in 2023. The gross profit margin remained strong, and there was a significant improvement in net income for 2023. However, EBIT and EBITDA margins have not been consistently reported, limiting complete profitability analysis.

Balance Sheet

Positive

Assured Guaranty maintains a strong equity base, reflected in a healthy equity ratio. However, a high debt-to-equity ratio remains a concern, although it's stable. The company shows a fluctuating ROE, with a notable increase in recent years, indicating improved profitability.

Cash Flow

Neutral

Cash flow from operations has improved in 2023, showing a positive trend after consecutive years of negative free cash flow. The operating cash flow to net income ratio indicates better cash management, but historical volatility in cash flows presents a risk.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
872.00M	950.00M	684.00M	698.00M	1.08B
	Gross Profit
872.00M	733.00M	517.00M	519.00M	887.00M
	EBIT
0.00	699.00M	203.00M	426.00M	332.00M
	EBITDA
0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
376.00M	739.00M	124.00M	389.00M	362.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.49B	132.00M	8.04B	9.55B	9.79B
	Total Assets
11.90B	12.54B	16.84B	18.21B	15.33B
	Total Debt
1.70B	1.69B	1.68B	1.67B	1.22B
	Net Debt
1.58B	1.60B	1.57B	1.55B	1.06B
	Total Liabilities
6.35B	6.77B	11.55B	1.67B	1.22B
	Stockholders Equity
5.50B	5.71B	5.06B	6.29B	6.64B
Cash Flow		Free Cash Flow
625.00M	461.00M	-2.45B	-1.94B	-853.00M
	Operating Cash Flow
625.00M	461.00M	-2.48B	-1.94B	-853.00M
	Investing Cash Flow
-26.00M	286.00M	1.74B	23.00M	788.00M
	Financing Cash Flow
-598.00M	-670.00M	612.00M	1.96B	183.00M

Assured Guaranty Technical Analysis

Technical Analysis Sentiment

Negative

Last Price80.79

Price Trends

50DMA

87.58

Negative

100DMA

88.97

Negative

200DMA

84.49

Negative

Market Momentum

MACD

-0.18

Negative

RSI

51.65

Neutral

STOCH

53.55

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGO, the sentiment is Negative. The current price of 80.79 is below the 20-day moving average (MA) of 84.83, below the 50-day MA of 87.58, and below the 200-day MA of 84.49, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 51.65 is Neutral, neither overbought nor oversold. The STOCH value of 53.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGO.

Assured Guaranty Risk Analysis

Assured Guaranty disclosed 54 risk factors in its most recent earnings report. Assured Guaranty reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Assured Guaranty Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTG	77 Outperform	$5.79B	8.27	14.90%	2.17%	4.56%	15.94%
RDN	77 Outperform	$4.56B	8.24	13.40%	3.06%	3.79%	3.86%
WTM	68 Neutral	$4.47B	19.32	5.22%	0.06%	2.48%	-54.02%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
AGO	63 Neutral	$3.99B	11.43	6.71%	1.59%	-4.43%	-45.42%
AMBC	48 Neutral	$320.92M	4.52	2.04%	―	46.32%	640.18%
MBI	29 Underperform	$219.11M	―	26.69%	―	583.33%	6.59%

* Financial Sector Average

Performance Comparison

AGO

Assured Guaranty

80.79

2.56

3.27%

MBI

MBIA

3.92

-2.32

-37.18%

MTG

MGIC Investment

23.94

4.62

23.91%

RDN

Radian Group

32.40

3.03

10.32%

WTM

White Mountains Insurance Group

1,736.13

48.23

2.86%

AMBC

Ambac Financial

6.55

-8.40

-56.19%

Assured Guaranty Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -12.03% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements such as record highs in key financial metrics, strong stock performance, new business production, geographic expansion, and successful litigation outcomes. However, these were countered by increased loss expenses, a decline in adjusted operating income, and ongoing uncertainty in Puerto Rico exposure. While the highlights present a positive outlook with strategic growth and successful initiatives, the lowlights indicate challenges that need to be addressed.

Highlights

Record Highs in Key Financial Metrics

Assured Guaranty reached record year-end highs for adjusted book value per share at $170.12, adjusted operating shareholders equity per share at $114.75, and shareholders' equity per share at $108.80.

Strong Stock Performance and Share Repurchase

AGO's common stock share price rose 20% for the year to $90.01, and they repurchased 11% of the common shares outstanding at December 31, 2023, meeting their 2024 target of repurchasing $500 million of shares.

Successful New Business Production

PVP across their three financial guaranty businesses topped $400 million for the second year in a row. US public finance originated $270 million in PVP, its highest annual total in four years.

Geographic Expansion

Opened offices in Australia and Singapore and made further inroads in Continental Europe, expanding their geographic reach and pursuing opportunities in Australia, New Zealand, and Asia.

Successful Litigation Outcome

In early February 2025, they concluded litigation with Lehman Brothers International Europe, recognizing a pre-tax gain of approximately $103 million in the first quarter of 2025.

Dividend Increase

The Board of Directors approved a 10% increase to their quarterly dividend per share from $0.31 to $0.34.

Lowlights

Increased Loss Expenses

Loss expense increased from $7 million in Q4 2023 to $31 million in Q4 2024, mainly due to lower expected recoveries on certain long-dated US public finance transactions and increased losses on certain insured healthcare transactions.

Decline in Adjusted Operating Income

Fourth quarter 2024 adjusted operating income was $66 million, a significant decrease from $338 million in the same period of 2023, due in part to non-recurring benefits in 2023.

Continued Puerto Rico Exposure Uncertainty

The Title III Court extended the time for parties to resolve differences regarding PREPA exposures, indicating ongoing uncertainty and unresolved issues.

Company Guidance

During the Assured Guaranty Limited Fourth Quarter and Full Year 2024 Earnings Conference Call, significant metrics were highlighted related to the company's performance and strategic initiatives in 2024. The company reported an adjusted operating income per share of $7.10. Notably, they achieved record year-end highs for adjusted book value per share at $170.12, adjusted operating shareholders' equity per share at $114.75, and shareholders' equity per share at $108.80. Assured Guaranty repurchased 11% of its common shares, amounting to $500 million, and reported a 20% rise in their common stock share price to $90.01. The company also noted strong new business production with PVP exceeding $400 million across its three financial guaranty businesses for the second consecutive year. Additionally, they opened new offices in Australia and Singapore, further expanding their geographic reach. These achievements underscore Assured Guaranty's strategic moves to enhance growth, profitability, and corporate efficiency, positioning them well for success in 2025.

Assured Guaranty Corporate Events

Financial Disclosures

Assured Guaranty Releases 2024 Financial Supplement

Neutral

Mar 14, 2025

On March 14, 2025, Assured Guaranty Ltd. released its financial supplement and fixed income investor presentation for the period ending December 31, 2024. The audited financial statements indicate a stable financial position with a fair presentation of the company’s operations and cash flows, as confirmed by PricewaterhouseCoopers LLP, reflecting the company’s adherence to US GAAP standards.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.