Ambac Financial (AMBC) AI Stock Analysis

• Market Cap: $325.46M
• Dividend Yield: N/A
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): 65.4
• Beta (1Y): 0.91
• Revenue Growth: 10.50%
• EPS Growth: -92.02%
• Country: US
• Employees: 380
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Specialty
• EPS (TTM): -0.13
• Shares Outstanding: 46,427,420
• 10 Day Avg. Volume: 811,148
• 30 Day Avg. Volume: 1,053,329
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.60
• Enterprise Value/Market Cap: 13.87
• Enterprise Value/Revenue: 3.80
• Enterprise Value/Gross Profit: 26.26
• Enterprise Value/Ebitda: 18.90
• 1Y Price Target: $15.00
• Price Target Upside: 111.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 47 Neutral
• Price Target: $6.50 ▼(-8.19%Downside)

Ambac Financial's overall stock score is primarily impacted by substantial financial challenges, weak technical indicators, and a high valuation. Despite some positive aspects from the earnings call, such as growth in specific segments, the overall sentiment remains cautious due to significant net losses and operational difficulties.

Ambac Financial Business Overview & Revenue Model

Company Description

Ambac Financial Group, Inc. (AMBC) is a financial services holding company headquartered in New York City. It primarily operates through its subsidiaries, offering financial guarantees and related services. The company's core products include bond insurance, which involves guaranteeing the payment of principal and interest on municipal and structured finance obligations. Ambac is a key player in the financial guarantee industry, serving clients across various sectors including public finance, infrastructure, and asset-backed securities.

How the Company Makes Money

Ambac Financial Group generates revenue primarily through the premiums it charges for providing financial guarantees on bonds and structured financial products. The company earns these premiums by underwriting insurance policies that protect bondholders against defaults on the underlying obligations. In addition to premium income, Ambac also earns investment income from its investment portfolio, which includes fixed-income securities. The company's earnings are influenced by factors such as interest rates, credit risk, and the overall economic environment. Significant partnerships or collaborations with financial institutions and government entities can also impact Ambac's revenue streams by expanding its market reach and diversifying its risk exposure.

Ambac Financial Financial Statement Overview

Summary

Ambac Financial is experiencing substantial financial challenges, including significant net losses, declining revenues, and weakened cash flow. While the elimination of debt is positive, the low equity ratio and poor cash flow metrics highlight vulnerabilities.

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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	196.57M	235.81M	269.00M	424.00M	250.00M	156.00M
Gross Profit	171.87M	235.81M	269.00M	424.00M	250.00M	156.00M
EBITDA	-42.31M	-30.52M	107.00M	742.00M	246.00M	-160.00M
Net Income	-622.84M	-556.45M	4.00M	521.00M	-16.00M	-437.00M
Balance Sheet
Total Assets	8.25B	8.06B	8.43B	7.97B	12.30B	13.22B
Cash, Cash Equivalents and Short-Term Investments	213.23M	8.32M	28.00M	1.93B	1.85B	2.83B
Total Debt	150.00M	150.00M	3.48B	3.75B	6.45B	7.23B
Total Liabilities	7.04B	6.86B	7.00B	6.65B	11.19B	12.07B
Stockholders Equity	852.22M	856.91M	1.36B	1.25B	1.04B	1.08B
Cash Flow
Free Cash Flow	-27.85M	762.00K	200.00M	1.33B	-131.00M	-353.00M
Operating Cash Flow	-27.85M	762.00K	200.00M	1.33B	-131.00M	-175.00M
Investing Cash Flow	-217.37M	-166.37M	435.00M	866.00M	776.00M	432.00M
Financing Cash Flow	241.22M	194.22M	-423.00M	-2.16B	-657.00M	-303.00M

Ambac Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 7.08 is below the 20-day moving average (MA) of 7.17, below the 50-day MA of 7.53, and below the 200-day MA of 10.14, indicating a bearish trend. The MACD of -0.20 indicates Negative momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 77.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMBC.

Ambac Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTG	79 Outperform	$6.52B	9.13	15.12%	1.89%	4.64%	15.36%
ESNT	79 Outperform	$6.11B	8.82	13.29%	2.06%	9.87%	3.41%
RDN	78 Outperform	$4.79B	9.08	13.22%	2.86%	2.95%	4.08%
Sector *	67 Neutral	$16.51B	11.23	9.71%	3.96%	11.61%	-10.70%
AGO	66 Neutral	$4.21B	10.07	7.90%	1.58%	-4.43%	-45.42%
AMBC	47 Neutral	$325.46M	65.37	-2.23%	―	10.50%	-92.02%
MBI	28 Underperform	$215.09M	―	26.69%	―	583.33%	6.59%

Ambac Financial Corporate Events

Ambac Financial Amends Credit Agreement for 2025

On June 10, 2025, Ambac Financial Group, Inc. amended its credit agreement originally dated August 1, 2024. The amendment extends the loan maturity date to December 31, 2025, or three months after the termination of a stock purchase agreement with American Acorn Corporation. It also requires a $10 million repayment by October 31, 2025, and a 1% duration fee on November 3, 2025. Additionally, Ambac and Cirrata Group must maintain a minimum cash balance of $30 million. This amendment impacts the company’s financial obligations and liquidity management.

The most recent analyst rating on (AMBC) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Ambac Financial stock, see the AMBC Stock Forecast page.

Ambac Financial Holds Annual Stockholders Meeting

Ambac Financial Group, Inc. held its Annual Meeting of Stockholders on May 28, 2025, where approximately 78% of the company’s shares were represented. During the meeting, stockholders elected seven directors to serve until the 2026 annual meeting, approved executive compensation, ratified KPMG LLP as the independent accounting firm for 2025, and decided to hold annual advisory votes on executive compensation.

The most recent analyst rating on (AMBC) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Ambac Financial stock, see the AMBC Stock Forecast page.