MGIC Investment (MTG)
NYSE:MTG
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MGIC Investment
(NYSE:MTG)
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Rating:68Neutral
Price Target:
$29.00
▲(5.72% Upside)
Action:DowngradedDate:02/05/26
The score is driven primarily by strong profitability/capital strength and a supportive earnings-call outlook (stability, reinsurance/capital actions, and ongoing capital returns). Offsetting these positives are the major 2025 cash-flow deterioration (operating/free cash flow reported as zero) and the sharp revenue decline, plus currently weak technical momentum. Valuation is a meaningful tailwind due to the low P/E and dividend yield.
Positive Factors
High Profitability and Margins
MGIC’s very high operating and net margins (net margin ~61% in 2025) indicate durable underwriting economics and pricing power in private mortgage insurance. Sustained margins support internal capital build, reserve adequacy and the ability to fund dividends/repurchases even if top-line growth moderates.
Negative Factors
Sharp Cash-Flow Deterioration
A reported drop to zero operating and free cash flow in 2025 is a durable concern: it weakens internal funding for dividends, buybacks and reserve accretion, and raises questions about earnings quality or timing. Absent sustained cash conversion, capital actions may become constrained.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability and Margins
MGIC’s very high operating and net margins (net margin ~61% in 2025) indicate durable underwriting economics and pricing power in private mortgage insurance. Sustained margins support internal capital build, reserve adequacy and the ability to fund dividends/repurchases even if top-line growth moderates.
Read all positive factors
MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.90B
Dividend Yield1.89%
Average Volume (3M)1.87M
Price to Earnings (P/E)8.9
Beta (1Y)0.59
Revenue Growth2.20%
EPS Growth9.90%
CountryUS
Employees555
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.75
Shares Outstanding214,953,350
10 Day Avg. Volume1,565,906
30 Day Avg. Volume1,868,071
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)1.28
Price to Sales (P/S)5.43
P/FCF Ratio7.74
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue5.12
Enterprise Value/Gross Profit5.36
Enterprise Value/Ebitda6.40
Forecast
1Y Price Target
$28.75Price Target Upside4.81% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)3.08
Revenue Forecast (FY)$1.23B
MGIC Investment Business Overview & Revenue Model
Company Description
MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, Puerto Rico, and...
How the Company Makes Money
MGIC generates revenue primarily through the sale of mortgage insurance premiums. When lenders require mortgage insurance for loans with low down payments, they pay premiums to MGIC. This creates a steady stream of income for the company. Addition...
MGIC Investment Earnings Call Summary
Earnings Call Date:Feb 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized strong financial performance, disciplined capital and risk management, and proactive reinsurance actions that materially strengthened the company’s capital position and reduced regulatory capital requirements. Key operating metrics—net income, EPS, ROE, book value per share, NIW, favorable reserve development, and expense reductions—were positive. The company did flag manageable headwinds including modest increases in delinquency metrics, potential persistency decline if interest rates fall and refi activity accelerates, a flat insurance-in-force outlook for 2026, and some volatility in ceded premium/profit commission mechanics. Overall, positives (robust earnings, capital returns, reinsurance outcomes, and expense discipline) outweigh the measured risks and uncertainties described by management.Positive Updates
Strong Net Income and Earnings Per Share
Reported net income of $169 million in Q4 2025 and $738 million for the full year; Q4 diluted EPS of $0.75 vs $0.72 year-ago (≈+4%) and full-year EPS of $3.14 vs $2.89 year-ago (≈+9%).
Negative Updates
Moderate Insurance-in-Force Growth Outlook
Management expects insurance in force to remain relatively flat in 2026 even if the MI market is similar in size to 2025, because increased refinance-driven NIW would likely put downward pressure on persistency.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Net Income and Earnings Per Share
Reported net income of $169 million in Q4 2025 and $738 million for the full year; Q4 diluted EPS of $0.75 vs $0.72 year-ago (≈+4%) and full-year EPS of $3.14 vs $2.89 year-ago (≈+9%).
Read all positive updates
Company Guidance
MGIC guided that it expects 2026 to be a year of stability and disciplined capital management: insurance‑in‑force is expected to remain relatively flat (they finished 2025 with >$303B, +3% YoY), in‑force premium yield is expected to stay near 38 basis points, and operating (underwriting and other) expenses are forecast to decline to $190–$200 million (FY‑2025 expense was $201M, within prior $195–$205M guidance; Q4 expense was $46M). Management reiterated conservative credit assumptions (initial claim rate on new delinquency notices = 7.5%; account‑based delinquency +3 bps YoY / +11 bps sequential; average credit score at origination 748; persistency 85%) and modest investment expectations (Q4 investment income $62M, book yield ~4%, unrealized loss narrowed $16M). Capital actions and reinsurance remain central to guidance: reinsurance reduced PMIERs required by ~$2.8B (~47%), operating company excess to PMIERs ~$2.5B, holding‑company liquidity $1.0B, completed a $324M ILS, a $250M excess‑of‑loss covering 2021 NIW and a 40% quota share covering most of 2027 NIW, amended 2022 quota shares to cut ongoing cost ~40% beginning 2026; and capital return activity will continue (FY‑2025 returns to shareholders $915M, 124% payout ratio; Q4 repurchases 6.8M shares for $189M, additional Jan repurchases 2.7M for $73M; dividend approved $0.15/share payable March 6).MGIC Investment Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
83
Very Positive
Cash Flow
38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.21B | 1.21B | 1.16B | 1.17B | 1.19B |
| Gross Profit | 1.15B | 1.21B | 1.17B | 1.41B | 1.11B |
| EBITDA | 971.09M | 1.02B | 974.36M | 1.19B | 939.15M |
| Net Income | 738.35M | 762.99M | 712.95M | 865.35M | 634.98M |
Balance Sheet | |||||
| Total Assets | 6.64B | 6.55B | 6.54B | 6.21B | 7.33B |
| Cash, Cash Equivalents and Short-Term Investments | 375.51M | 6.08B | 6.09B | 5.74B | 6.87B |
| Total Debt | 646.14M | 644.67M | 643.20M | 662.81M | 1.15B |
| Total Liabilities | 1.49B | 1.37B | 1.47B | 1.57B | 2.46B |
| Stockholders Equity | 5.15B | 5.17B | 5.07B | 4.64B | 4.86B |
Cash Flow | |||||
| Free Cash Flow | 851.77M | 723.86M | 710.96M | 646.76M | 692.20M |
| Operating Cash Flow | 852.80M | 725.03M | 712.96M | 650.01M | 696.32M |
| Investing Cash Flow | 228.37M | -142.00M | -179.19M | 410.49M | -160.75M |
| Financing Cash Flow | -940.28M | -719.04M | -496.04M | -1.03B | -527.29M |
MGIC Investment Technical Analysis
Positive
27.43
Price Trends
26.46
Positive
27.31
Positive
27.14
Positive
Market Momentum
0.13
Negative
65.57
Neutral
91.19
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTG, the sentiment is Positive. The current price of 27.43 is above the 20-day moving average (MA) of 26.20, above the 50-day MA of 26.46, and above the 200-day MA of 27.14, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 65.57 is Neutral, neither overbought nor oversold. The STOCH value of 91.19 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTG.
MGIC Investment Risk Analysis
MGIC Investment disclosed 14 risk factors in its most recent earnings report. MGIC Investment 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
MGIC Investment Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.96B | 8.30 | 15.80% | ― | 8.86% | 9.51% | |
82 Outperform | $5.98B | 8.72 | 12.83% | 2.02% | 2.40% | 1.18% | |
76 Outperform | $5.78B | 9.33 | 12.35% | 1.88% | 2.78% | -0.50% | |
70 Outperform | $4.71B | 8.52 | 12.59% | 2.78% | -3.68% | 3.65% | |
68 Neutral | $5.90B | 8.93 | 14.33% | 1.89% | 2.20% | 9.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $6.46B | 10.21 | 11.87% | 3.58% | 25.99% | 426.44% |
* Financial Sector Average
MTG
MGIC Investment
27.43
4.05
17.32%
FAF
First American Financial
63.39
4.20
7.09%
RDN
Radian Group
34.57
3.22
10.28%
ESNT
Essent Group
61.15
6.88
12.68%
NMIH
NMI Holdings
38.91
4.28
12.36%
ACT
Enact Holdings
42.29
9.64
29.53%
MGIC Investment Corporate Events
Executive/Board Changes
MGIC Investment Board Member Announces Resignation
Neutral
Dec 15, 2025
On December 11, 2025, Analisa M. Allen, a member of the Board of Directors of MGIC Investment Corporation, announced her intention to resign effective January 31, 2026. Her decision to step down was not due to any disagreements regarding the compa...
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.