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Ambac Financial (AMBC)
NYSE:AMBC
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Ambac Financial
(NYSE:AMBC)
48Neutral
Ambac Financial (AMBC) vs. S&P 500 (SPY)
Market Cap
$381.50M
Dividend YieldN/A
Average Volume (3M)822.69K
Price to Earnings (P/E)5.7
Beta (1Y)0.93
Revenue Growth46.32%
EPS Growth640.18%
CountryUS
Employees178
SectorFinancial
Sector Strength77
IndustryInsurance
Share Statistics
EPS (TTM)1.45
Shares Outstanding46,242,184
10 Day Avg. Volume1,659,206
30 Day Avg. Volume822,687
Financial Highlights & Ratios
PEG Ratio0.00888
Price to Book (P/B)N/A
Price to Sales (P/S)1.70
Price to Cash Flow (P/CF)-3.70
P/FCF Ratio0.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.00Price Target Upside81.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Ambac Financial Business Overview & Revenue Model
Company DescriptionAmbac Financial Group, Inc. (AMBC) is a financial services holding company headquartered in New York City. The company primarily operates in the financial guarantee insurance sector, providing insurance products through its principal operating subsidiary, Ambac Assurance Corporation. Ambac's core services include the issuance of financial guarantees for public finance and structured finance obligations, with the goal of enhancing creditworthiness and reducing borrowing costs for issuers.
How the Company Makes MoneyAmbac Financial Group makes money by providing financial guarantee insurance, where it guarantees the timely payment of principal and interest on insured obligations when the issuer defaults. This service allows issuers to achieve better credit ratings and lower borrowing costs, for which Ambac charges premiums. These premiums constitute the primary revenue stream for the company. Additionally, Ambac may earn investment income from its investment portfolio, which includes the premiums received and other capital. The company's revenue can be influenced by factors such as the volume of new business underwritten, the performance of insured obligations, and interest rate movements. Ambac's financial performance can also be impacted by its ability to manage risk and maintain strong credit ratings.
Ambac Financial Financial Statement Overview
Summary
Ambac Financial faces substantial financial challenges, characterized by significant net losses, declining revenues, and weakened cash flow. While the elimination of debt is a positive step, the low equity ratio and poor cash flow metrics highlight vulnerabilities. The company must focus on stabilizing revenue and improving profitability to enhance its financial health.Income Statement
Ambac Financial's income statement reveals significant challenges. The company experienced a dramatic net loss in 2024, with a negative net profit margin of -235.9%, down from a modest profit in 2023. Revenue growth has been erratic, with a decrease of 12.3% in 2024 following a decline from 2022 to 2023. The absence of EBIT and EBITDA in 2024 further highlights operational difficulties.30
Negative
Balance Sheet
The balance sheet shows a decrease in stockholders' equity, reducing from $1.36 billion in 2023 to $379 million in 2024, indicating a weakened equity position. However, the company has removed its debt obligations, improving its debt-to-equity ratio from high levels in previous years. Despite this, the equity ratio is relatively low at 6.1%, suggesting potential financial instability.45
Neutral
Cash Flow
Cash flow analysis shows a sharp decline in operating cash flow from $200 million in 2023 to $762,000 in 2024, illustrating cash generation issues. The free cash flow has also deteriorated, reflected in a negligible free cash flow growth rate. The operating cash flow to net income ratio is unfavorable, reflecting poor cash conversion efficiency.35
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 398.00M | 235.81M | 269.00M | 424.00M | 250.00M | 156.00M | Gross Profit |
| 398.00M | 235.81M | 269.00M | 424.00M | 250.00M | 156.00M | EBIT |
| 67.00M | 0.00 | 113.00M | 695.00M | -31.00M | -448.00M | EBITDA |
| 91.00M | 0.00 | 107.00M | 742.00M | 246.00M | -160.00M | Net Income Common Stockholders |
| -19.00M | -556.45M | 4.00M | 521.00M | -16.00M | -437.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.61B | 8.32M | 28.00M | 1.93B | 1.85B | 2.83B | Total Assets |
| 14.59B | 6.27B | 8.43B | 7.97B | 12.30B | 13.22B | Total Debt |
| 8.20B | 0.00 | 3.48B | 3.75B | 6.45B | 7.23B | Net Debt |
| 8.13B | -8.32M | 3.46B | 3.72B | 6.43B | 7.21B | Total Liabilities |
| 12.96B | 5.89B | 7.00B | 6.65B | 11.19B | 12.07B | Stockholders Equity |
| 1.59B | 379.51M | 1.36B | 1.25B | 1.04B | 1.08B |
| Cash Flow | Free Cash Flow | ||||
| 118.00M | 762.00K | 200.00M | 1.33B | -131.00M | -353.00M | Operating Cash Flow |
| 118.00M | 762.00K | 200.00M | 1.33B | -131.00M | -175.00M | Investing Cash Flow |
| -286.00M | -246.30M | 435.00M | 866.00M | 776.00M | 432.00M | Financing Cash Flow |
| -17.00M | 0.00 | -423.00M | -2.16B | -657.00M | -303.00M |
Ambac Financial Technical Analysis
Negative
8.25
Price Trends
11.30
Negative
11.74
Negative
12.07
Negative
Market Momentum
-0.71
Positive
22.87
Positive
11.73
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBC, the sentiment is Negative. The current price of 8.25 is below the 20-day moving average (MA) of 10.72, below the 50-day MA of 11.30, and below the 200-day MA of 12.07, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 22.87 is Positive, neither overbought nor oversold. The STOCH value of 11.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMBC.
Ambac Financial Risk Analysis
Ambac Financial disclosed 53 risk factors in its most recent earnings report. Ambac Financial 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
Ambac Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $4.64B | 8.18 | 13.40% | 3.10% | 3.79% | 3.86% | |
75 Outperform | $5.77B | 8.23 | 13.63% | 1.99% | 11.88% | 5.54% | |
70 Outperform | $5.64B | 8.23 | 14.75% | 2.12% | 4.52% | 15.94% | |
67 Neutral | $4.15B | 12.18 | 6.71% | 1.45% | -4.43% | -45.42% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% | |
48 Neutral | $381.50M | 5.69 | 2.04% | ― | 46.32% | 640.18% | |
27 Underperform | $261.48M | ― | 26.69% | ― | 583.33% | 6.59% |
* Financial Sector Average
Performance Comparison
AMBC
Ambac Financial
8.25
-6.87
-45.44%
AGO
Assured Guaranty
83.01
-6.51
-7.27%
MBI
MBIA
5.00
-1.68
-25.15%
MTG
MGIC Investment
22.81
2.33
11.38%
RDN
Radian Group
31.07
0.38
1.24%
ESNT
Essent Group
54.56
-0.31
-0.56%
Ambac Financial Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -29.25% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
Ambac experienced significant growth in its P&C business and completed a transformative acquisition, but faced challenges with a substantial loss from the sale of its legacy business and softness in the A&H market. Overall, the positive growth metrics are balanced by significant financial challenges.Highlights
Significant Growth in P&C Business
Ambac's P&C business generated nearly $900 million of premiums, up 74% from 2023, and produced $236 million of revenue, which was up 89% from the prior year.
Acquisition of Beat
The acquisition of Beat was a transformative deal that brought immediate scale to Ambac's distribution platform, expected to deliver strong organic growth.
Successful Sale of Legacy Financial Guarantee Business
Ambac successfully sold its legacy financial guarantee business to Oaktree for $420 million, allowing for accelerated scaling of the Specialty P&C business.
Cirrata Revenue Growth
Cirrata generated nearly $100 million in revenue for 2024, up 93%, with a 20% adjusted EBITDA margin.
Everspan's Improved Performance
Everspan's gross premium written grew by 40% to over $380 million, with a combined ratio improvement of 500 basis points over 2023.
Lowlights
Net Loss from Discontinued Operations
Ambac recorded a $570 million loss on the sale of the legacy financial guarantee business, resulting in a net loss of $548 million for the fourth quarter.
Softness in A&H Market
The A&H segment, particularly Employer Stop Loss and short-term medical, experienced softness due to macroeconomic trends.
Negative Net Premiums Written
Everspan's net premiums written were negative $3 million in the quarter due to non-renewal of a personal alliance NSA reinsurance program.
Company Guidance
In the Ambac Financial Group's fourth quarter 2024 earnings call, the company reported significant growth and strategic advancements. The P&C business generated nearly $900 million in premiums, marking a 74% increase from 2023, and $236 million in revenue, up 89% from the previous year. Cirrata's revenue surged by 93% to $100 million, with an adjusted EBITDA of $20 million and a margin of 20%. Everspan's gross premium written rose to over $380 million, a 40% increase, with a combined ratio improvement to 101.6%. The company highlighted the transformative acquisition of Beat, the sale of its legacy financial guarantee business for $420 million, and robust market conditions supporting its growth strategies. Managed capacity for 2025 was reported at over $1.5 billion, bolstered by a diversified panel of insurers. Despite a net loss of $548 million due to the legacy business sale, Ambac remains focused on achieving its long-term goals of strong organic growth and significant adjusted EBITDA by 2028.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.