Ambac Financial (AMBC) AI Stock Analysis

• Market Cap: $404.16M
• Dividend Yield: N/A
• Average Volume (3M): 924.99K
• Price to Earnings (P/E): 64.1
• Beta (1Y): 0.92
• Revenue Growth: -17.06%
• EPS Growth: -118.90%
• Country: US
• Employees: 380
• Sector: Financial
• Sector Strength: 73
• Industry: Insurance - Specialty
• EPS (TTM): -0.22
• Shares Outstanding: 46,401,737
• 10 Day Avg. Volume: 655,877
• 30 Day Avg. Volume: 924,994
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.10
• Enterprise Value/Revenue: 2.86
• Enterprise Value/Gross Profit: 35.63
• Enterprise Value/Ebitda: -10.18
• 1Y Price Target: $11.33
• Price Target Upside: 28.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 51 Neutral
• Price Target: $9.00 ▲(1.69% Upside)

Ambac Financial's overall stock score reflects significant financial challenges, including net losses and declining revenues. While technical indicators and strategic initiatives provide some optimism, the company's valuation and financial health remain concerning. The strategic transformation and corporate events offer potential for future improvement, but current risks are substantial.

Ambac Financial Business Overview & Revenue Model

Company Description

Ambac Financial Group, Inc., a financial services holding company, provides financial guarantees in the United States, the United Kingdom, Italy, Austria, Australia, France, and Internationally. It offers financial guarantee insurance policies; specialty property & casualty program insurance; credit derivative contracts; and interest rate derivative transactions, as well as managing general agency / underwriting services. The company was incorporated in 1991 and is headquartered in New York, New York.

How the Company Makes Money

Ambac Financial generates revenue primarily through the issuance of financial guarantee insurance policies, which protect investors in the event of a default on municipal bonds. The company earns premiums from these policies, which are typically paid upfront or over time. Additionally, Ambac generates income from its investment portfolio, which includes fixed-income securities and other assets. The company also engages in credit derivative transactions, where it may earn fees or premiums related to the management of credit risk. Partnerships with municipalities, underwriters, and financial institutions enhance its market reach and support its revenue generation strategies.

Ambac Financial Financial Statement Overview

Summary

Ambac Financial faces substantial financial challenges, characterized by significant net losses, declining revenues, and weakened cash flow. The elimination of debt is a positive step, but 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.

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	296.93M	235.81M	269.00M	53.61M	282.00M	156.00M
Gross Profit	23.87M	139.52M	269.00M	42.01M	334.00M	156.00M
EBITDA	-83.55M	-30.52M	107.00M	742.00M	246.00M	-160.00M
Net Income	-642.82M	-556.45M	4.00M	521.00M	-28.00M	-437.00M
Balance Sheet
Total Assets	8.52B	8.06B	8.43B	7.97B	12.30B	13.22B
Cash, Cash Equivalents and Short-Term Investments	207.72M	331.90M	2.24B	1.93B	1.85B	2.83B
Total Debt	150.00M	150.00M	3.48B	3.75B	6.45B	7.23B
Total Liabilities	7.30B	6.86B	7.00B	6.65B	11.19B	12.07B
Stockholders Equity	859.84M	856.91M	1.36B	1.25B	1.04B	1.08B
Cash Flow
Free Cash Flow	-41.70M	762.00K	200.00M	1.33B	-131.00M	-353.00M
Operating Cash Flow	-41.70M	762.00K	200.00M	1.33B	-131.00M	-175.00M
Investing Cash Flow	-219.66M	-166.37M	435.00M	-41.16M	776.00M	432.00M
Financing Cash Flow	273.47M	194.22M	-423.00M	-19.23M	-657.00M	-303.00M

Ambac Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBC, the sentiment is Positive. The current price of 8.85 is above the 20-day moving average (MA) of 8.28, above the 50-day MA of 7.89, and below the 200-day MA of 9.44, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 61.72 is Neutral, neither overbought nor oversold. The STOCH value of 83.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMBC.

Ambac Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESNT	81 Outperform	$6.21B	9.19	12.94%	1.86%	4.79%	-0.76%
RDN	78 Outperform	$4.70B	8.74	13.07%	2.91%	0.24%	3.14%
MTG	75 Outperform	$6.42B	9.15	14.85%	1.93%	3.26%	12.70%
AGO	69 Neutral	$3.88B	8.86	8.38%	1.62%	5.89%	-27.45%
Sector *	68 Neutral	$17.89B	12.03	10.28%	3.73%	9.80%	1.66%
MBI	56 Neutral	$398.86M	―	26.69%	―	―	66.83%
AMBC	51 Neutral	$404.16M	64.08	-4.09%	―	-17.06%	-118.90%

Ambac Financial Corporate Events

Ambac Financial Extends Stock Purchase Agreement

Ambac Financial Group announced an extension of its stock purchase agreement with Oaktree Capital Management for the sale of its financial guarantee businesses, Ambac Assurance Corporation and Ambac UK, until December 31, 2025. This transaction, valued at $420 million, is a strategic move towards transforming Ambac into a pure-play specialty P&C insurance platform. Both parties are committed to the transaction, pending final regulatory approval, and have agreed on new terms regarding warrants and lease obligations.

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.

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.