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Assured Guaranty (AGO)
:AGO
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Assured Guaranty
(NYSE:AGO)
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Rating:70Outperform
Price Target:
$90.00
▲(10.04% Upside)
Assured Guaranty's strong financial performance and attractive valuation are key strengths, supported by robust earnings call insights. However, technical indicators suggest bearish momentum, and cash flow management requires attention. The stock is well-positioned for growth, but investors should be mindful of operational challenges.
Assured Guaranty (AGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.89B
Dividend Yield1.63%
Average Volume (3M)343.38K
Price to Earnings (P/E)8.8
Beta (1Y)0.68
Revenue Growth5.89%
EPS Growth-27.45%
CountryUS
Employees361
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)1.01
Shares Outstanding47,615,220
10 Day Avg. Volume296,368
30 Day Avg. Volume343,376
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue6.18
Enterprise Value/Gross Profit6.82
Enterprise Value/Ebitda9.33
Forecast
1Y Price Target
$99.25Price Target Upside21.35% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Assured Guaranty Business Overview & Revenue Model
Company DescriptionAssured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company operates in two segments, Insurance and Asset Management. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, it is involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, pooled corporate obligations, financial products, and other structured finance securities. Additionally, the company offers specialty insurance and reinsurance that include life and aircraft residual value insurance transactions; and asset management services comprising investment advisory services, including management of collateralized loan obligations, and opportunity and liquid strategy funds. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyAssured Guaranty generates revenue primarily through the sale of financial guaranty insurance, which involves charging premiums for the credit enhancement services it provides. The company's key revenue streams include upfront premiums paid by issuers of debt at the time of the issuance, as well as ongoing renewal premiums over the life of the insured bond. Additionally, AGO earns investment income from the portfolio of investments it maintains with the premiums collected, as well as from any claim recoveries when it pays out on guaranteed bonds. The company's solid financial standing and strong credit ratings enable it to maintain a competitive edge in the market. Strategic partnerships with municipalities and other issuers also play a significant role in driving revenue by increasing the volume of insured transactions.
Assured Guaranty Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong financial position with record-high book values and significant market share in the U.S. municipal bond insurance sector. However, a decrease in operating income and increased loss expenses in the insurance segment presented challenges.Q2-2025 Updates
Positive Updates
Record-High Adjusted Book Value and Operating Shareholders' Equity
Adjusted book value per share reached $176.95 and adjusted operating shareholders' equity per share hit $120.11, both record highs at the end of the second quarter of 2025.
Strong U.S. Municipal Issuance and Market Capture
The par amount of U.S. municipal issuance was 17% ahead of last year’s record pace, and Assured Guaranty insured 64% of the insured par sold in the primary market during the first half of 2025.
Significant Growth in Secondary Market Policies
Assured Guaranty wrote nearly $900 million of secondary market policies in the first half of 2025, including over $500 million in the second quarter, achieving 150% of the total secondary par insured in all of 2024.
Capital Management and Share Repurchases
The company has repurchased $296 million of common shares, representing 6.8% of the outstanding shares as of December 31, 2024, and the Board authorized an additional $300 million in share repurchases.
Strong Financial Ratings Affirmed
S&P Global Ratings affirmed Assured Guaranty’s AA financial strength rating with a stable outlook, and KBRA affirmed the AA+ financial strength rating with a stable outlook.
Negative Updates
Decrease in Adjusted Operating Income
Second quarter 2025 adjusted operating income was $50 million, or $1.01 per share, a decrease from the $80 million, or $1.44 per share, in the second quarter of 2024.
Increase in Insurance Segment Loss Expense
Insurance segment loss expense increased by $27 million in the second quarter of 2025, primarily attributable to additional reserves on certain U.K. regulated utility and U.S. municipal revenue exposures.
Challenges in Health Care Sector
Westchester Medical Center was downgraded to below investment grade due to liquidity concerns and potential headwinds from Medicaid and Medicare patients.
Company Guidance
During the Assured Guaranty Limited Second Quarter 2025 Earnings Conference Call, several key metrics were highlighted, reflecting the company's strong performance and strategic initiatives. The adjusted book value per share reached a record high of $176.95, and adjusted operating shareholders' equity per share was $120.11 by the end of the second quarter. Adjusted operating income per share was reported at $4.21 for the first half of 2025 and $1.01 for the second quarter alone. The company insured 64% of the insured par sold in the U.S. municipal market during the first half of 2025, with a total insured par amount of $15 billion, marking a 30% increase from the previous year. The company also highlighted its strong capital management efforts, with $296 million in common shares repurchased so far in 2025, representing 6.8% of shares outstanding at the end of 2024, and an additional $300 million repurchase authorized by the Board in August. Furthermore, the company's six-month present value of premiums (PVP) totaled $103 million, with $74 million originating from U.S. public finance. The company's robust financial position was affirmed by S&P Global Ratings and KBRA, both of which highlighted Assured Guaranty's strong competitive position, excellent capital and earnings, and high-quality insured portfolio.Assured Guaranty Financial Statement Overview
Summary
Assured Guaranty demonstrates strong profitability with high margins and significant revenue growth. However, there are concerns with operating efficiency and cash flow management, which need attention for sustained growth.Income Statement
Assured Guaranty shows strong profitability with a high gross profit margin of 90.66% and a net profit margin of 46.02% in TTM. The revenue growth rate of 89.3% in TTM indicates a significant recovery from previous declines. However, the EBIT margin has slightly decreased from 71.13% in 2024 to 65.78% in TTM, suggesting some pressure on operating efficiency.75
Positive
Balance Sheet
The company maintains a healthy debt-to-equity ratio of 0.30 in TTM, indicating moderate leverage. Return on equity has improved to 8.34% in TTM, reflecting better profitability. However, the equity ratio has decreased slightly, suggesting a need for careful management of assets and liabilities.70
Positive
Cash Flow
Free cash flow has grown by 9.62% in TTM, showing improvement in cash generation. The free cash flow to net income ratio remains stable at 1.0, indicating efficient cash conversion. However, the operating cash flow to net income ratio is zero, highlighting potential concerns in cash flow management.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.02B | 814.00M | 950.00M | 806.00M | 809.00M | 982.00M |
| Gross Profit | 922.00M | 830.00M | 733.00M | 818.00M | 904.00M | 887.00M |
| EBITDA | 674.00M | 517.00M | 730.00M | 268.00M | 470.00M | 471.00M |
| Net Income | 468.00M | 376.00M | 739.00M | 124.00M | 389.00M | 362.00M |
Balance Sheet | ||||||
| Total Assets | 12.10B | 11.90B | 12.54B | 16.84B | 18.21B | 15.33B |
| Cash, Cash Equivalents and Short-Term Investments | 2.15B | 2.46B | 8.06B | 8.04B | 9.55B | 9.79B |
| Total Debt | 1.70B | 1.70B | 1.69B | 1.68B | 1.67B | 1.22B |
| Total Liabilities | 6.37B | 6.35B | 6.77B | 11.55B | 11.71B | 8.63B |
| Stockholders Equity | 5.63B | 5.50B | 5.71B | 5.06B | 6.29B | 6.64B |
Cash Flow | ||||||
| Free Cash Flow | 228.00M | 47.00M | 461.00M | -2.45B | -1.94B | -853.00M |
| Operating Cash Flow | 228.00M | 47.00M | 461.00M | -2.48B | -1.94B | -853.00M |
| Investing Cash Flow | 791.00M | 780.00M | 286.00M | 1.74B | 23.00M | 788.00M |
| Financing Cash Flow | -810.00M | -983.00M | -670.00M | 612.00M | 1.96B | 183.00M |
Assured Guaranty Technical Analysis
Negative
81.79
Price Trends
82.50
Negative
84.06
Negative
85.83
Negative
Market Momentum
-0.22
Negative
48.50
Neutral
31.05
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 81.79 is below the 20-day moving average (MA) of 81.82, below the 50-day MA of 82.50, and below the 200-day MA of 85.83, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 48.50 is Neutral, neither overbought nor oversold. The STOCH value of 31.05 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | 6.26B | 9.11 | 12.60% | 1.90% | 4.79% | -0.76% | |
78 Outperform | 4.70B | 8.69 | 0.00% | 2.91% | 0.24% | 3.14% | |
77 Outperform | 6.45B | 9.14 | 14.75% | 1.93% | 3.26% | 12.70% | |
70 Outperform | $3.89B | 8.78 | 8.38% | 1.63% | 5.89% | -27.45% | |
56 Neutral | 350.39M | -1.51 | 10.33% | ― | 0.00% | 66.83% | |
51 Neutral | 414.83M | -29.21 | -64.94% | ― | -17.06% | -118.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
AGO
Assured Guaranty
81.79
1.78
2.22%
MBI
MBIA
6.94
3.31
91.18%
MTG
MGIC Investment
28.00
3.11
12.49%
RDN
Radian Group
34.73
0.35
1.02%
AMBC
Ambac Financial
8.94
-2.74
-23.46%
ESNT
Essent Group
63.55
0.60
0.95%
Assured Guaranty Corporate Events
Business Operations and StrategyFinancial Disclosures
Assured Guaranty Releases June 2025 Financial Supplement
Neutral
Aug 8, 2025
On August 8, 2025, Assured Guaranty Ltd. released its June 30, 2025 Financial Supplement and Fixed Income Investor Presentation on its website. These materials provide insights into the company’s financial performance and strategic positioning, potentially impacting investor perceptions and stakeholder decisions.
The most recent analyst rating on (AGO) stock is a Buy with a $110.00 price target. To see the full list of analyst forecasts on Assured Guaranty stock, see the AGO Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.