Ambac Financial (AMBC) AI Stock Analysis

• Market Cap: $395.10M
• Dividend Yield: N/A
• Average Volume (3M): 964.27K
• Price to Earnings (P/E): 78.9
• Beta (1Y): 0.96
• Revenue Growth: 10.50%
• EPS Growth: -92.02%
• Country: US
• Employees: 380
• Sector: Financial
• Sector Strength: 67
• Industry: Insurance - Specialty
• EPS (TTM): -0.22
• Shares Outstanding: 46,427,420
• 10 Day Avg. Volume: 702,216
• 30 Day Avg. Volume: 964,269
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.34
• Enterprise Value/Revenue: 4.70
• Enterprise Value/Gross Profit: 5.37
• Enterprise Value/Ebitda: -21.82
• 1Y Price Target: $12.50
• Price Target Upside: 50.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 55 Neutral
• Price Target: $9.00 ▲(8.56% Upside)

The overall score reflects significant financial struggles, with net losses and cash flow issues being major concerns. Technical analysis presents a short-term positive outlook but is counterbalanced by overvaluation risks. The earnings call provides some optimism with growth in specific segments, but it is tempered by operational losses. The corporate event marks a strategic shift which could benefit the company's long-term positioning.

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 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 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.

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

Ambac Financial Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBC, the sentiment is Neutral. The current price of 8.29 is above the 20-day moving average (MA) of 8.29, above the 50-day MA of 7.64, and below the 200-day MA of 9.67, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 39.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AMBC.

Ambac Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDN	78 Outperform	$4.53B	8.43	13.07%	3.00%	2.95%	4.08%
MTG	75 Outperform	$6.21B	8.83	14.85%	2.04%	3.26%	12.70%
ESNT	75 Outperform	$5.84B	8.43	13.29%	2.07%	9.87%	3.41%
Sector *	67 Neutral	$17.02B	11.60	9.79%	3.95%	10.61%	2.06%
AGO	66 Neutral	$4.23B	10.11	7.90%	1.54%	-4.43%	-45.42%
AMBC	55 Neutral	$395.10M	78.86	-2.23%	―	10.50%	-92.02%
MBI	28 Underperform	$332.45M	―	26.69%	―	583.33%	6.59%

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.

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 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.