Education
About Us
Working with TipRanks
Follow Us
MGIC Investment Corp (MTG)
NYSE:MTG
Top Page
MGIC Investment
(NYSE:MTG)
Select Model
Select Model
Rating:68Neutral
Price Target:
$29.00
▲(10.64% 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.
Conservative Balance Sheet and Capital Strength
Low and improving leverage with sizable equity (~$5.1B) and healthy ROE (~14%) provide a durable cushion against underwriting volatility and regulatory shocks. Strong capital positions preserve capacity to write business, absorb losses and maintain required regulatory buffers over the medium term.
Proactive Reinsurance and Capital Management
Management’s active reinsurance, ILS issuance and quota-share amendments materially lower regulatory capital needs and ongoing risk retention. These structural actions expand capacity, stabilize capital ratios, and enable persistent shareholder returns while reducing sensitivity to single‑year loss shocks.
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.
Revenue Decline and Growth Volatility
A roughly 23% revenue decline in 2025 signals structural sensitivity to mortgage origination cycles and persistency shifts. Prolonged top-line weakness reduces scalability of fixed-cost leverage, may compress future earnings power, and limits sustainable premium growth over the medium term.
Persistency and Rising Delinquency Risk
Management’s concern that lower rates and higher refi activity could reduce persistency, combined with a modest rise in account‑based delinquency, creates structural headwinds: lower persistency reduces earned premium and higher delinquencies increase expected claim emergence and reserve volatility.
MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.99B
Dividend Yield1.89%
Average Volume (3M)2.47M
Price to Earnings (P/E)8.5
Beta (1Y)0.62
Revenue Growth2.20%
EPS Growth9.90%
CountryUS
Employees555
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.75
Shares Outstanding223,740,980
10 Day Avg. Volume2,061,059
30 Day Avg. Volume2,469,001
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)1.28
Price to Sales (P/S)5.43
P/FCF Ratio0.00
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue4.98
Enterprise Value/Gross Profit5.24
Enterprise Value/Ebitda6.28
Forecast
1Y Price Target
$28.67Price Target Upside9.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)3.13
Revenue Forecast (FY)$1.27B
MGIC Investment Business Overview & Revenue Model
Company DescriptionMGIC 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 Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.
How the Company Makes MoneyMGIC 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. Additionally, MGIC earns money through investment income generated from its portfolio of invested premiums and reserves. The company also benefits from reinsurance arrangements, which allow it to manage risk effectively while enhancing its revenue potential. Key partnerships with mortgage lenders and brokers play a crucial role in expanding MGIC's market reach, further driving revenue growth. Overall, the company's earnings are influenced by housing market conditions, default rates, and broader economic factors.
MGIC Investment Earnings Call Summary
Earnings Call Date:Feb 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 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.Q4-2025 Updates
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%).
Healthy Return on Equity
Annualized return on equity for the quarter was 13%, with full-year ROE at 14.3%, indicating solid profitability and capital efficiency.
Book Value Growth
Book value per share increased to $23.47, up 13% year over year, reflecting strong underlying equity growth.
Insurance In Force and New Insurance Written
Surpassed $300 billion milestone and ended the year with >$303 billion of insurance in force (+3% year over year). Wrote $17 billion of high-quality NIW in Q4 and $60 billion for the full year (≈+8% YoY).
Robust Capital and Reinsurance Actions
Bolstered reinsurance program with a $250 million excess-of-loss transaction, a 40% quota share covering most of 2027 NIW, amended treaties reducing ongoing cost by ≈40% beginning in 2026, and an insurance-linked note providing $324 million of loss protection. Reinsurance reduced PMIERs required by $2.8 billion (≈47%).
Shareholder Returns and Capital Management
Returned $915 million to shareholders via repurchases and dividends in 2025 (repurchased 6.8M shares for $189M in Q4; additional 2.7M shares for $73M in January). Reduced shares outstanding by 12% and paid $800 million in dividends from MGIC to the holding company; holding company liquidity at $1.0 billion and operating-company excess to PMIERs of $2.5 billion.
Credit Quality and Reserve Development
Average credit score at origination remained strong at 748. Favorable loss reserve development of $31 million in the quarter driven by higher-than-expected cure rates on recent delinquency notices; early payment defaults remain low.
Expense Discipline and Investment Income
Underwriting and other expenses were $46 million in Q4 and $201 million for the full year (down $17 million YoY); management expects 2026 operating expenses of $190–$200 million. Investment income was $62 million in Q4 with a book yield of 4%; unrealized loss position narrowed by $16 million this quarter.
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.
Persistency and Refinance Risk
Persistency remained elevated at 85% in Q4 but management flagged that lower interest rates and higher refinance activity would likely reduce persistency, which could offset NIW-driven growth in insurance in force.
Rising Delinquency Metrics
Account-based delinquency rate increased 3 basis points year over year and 11 basis points sequentially in the quarter; management continues to apply a 7.5% initial claim-rate assumption for new delinquency notices, indicating continued vigilance around loss emergence.
Ceded Premium / Profit Commission Volatility
Profit commission on quota-share deals declined by ~$4 million sequentially because additional losses were seeded to quota-share agreements; this reduced reported ceded premium and introduces modeling uncertainty tied to future loss expectations.
In-Force Premium Yield Stability but Slight Dip
In-force premium yield remained near 38 basis points but declined a couple of tenths of a basis point this quarter; management expects the yield to remain near 38 bps in 2026, implying limited near-term premium-rate tailwind.
Affordability and Policy Uncertainty
Housing affordability remains a broader market challenge; potential public-policy moves (e.g., discussions about FHA premium changes) create external uncertainty that could influence market dynamics and product demand.
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
Strong profitability and a conservative balance sheet support the score (very high margins, low leverage, healthy ROE). However, the sharp 2025 revenue decline and the reported drop of operating/free cash flow to zero in 2025 are significant near-term red flags that materially reduce confidence in the latest fundamentals.Income Statement
Profitability is a major strength, with consistently very high operating and net margins across 2020–2025 and solid earnings power (2025 net margin ~61%, down modestly from 2024 ~63%). However, growth has turned volatile: revenue fell sharply in 2025 (about -23% YoY) after modest growth in 2024, which tempers the otherwise strong profitability profile.86
Very Positive
Balance Sheet
Leverage appears conservative, with debt-to-equity staying low and stable (roughly 0.12–0.26 over the period, improving meaningfully since 2020–2021). Equity has remained sizable (~$5.1B in 2025), supporting balance sheet resilience. Return on equity is healthy (mid-teens recently, ~14% in 2025), though below the 2022 peak, suggesting profitability normalization.83
Very Positive
Cash Flow
Cash generation was strong and well-aligned with earnings from 2020–2024, with free cash flow closely tracking net income (near 100% conversion each year) and generally positive free-cash-flow growth. The key weakness is 2025, where operating cash flow and free cash flow are reported as zero (with free cash flow growth at -100%), creating a sharp deterioration and raising data-quality and/or sustainability concerns versus prior years.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 | 955.24M | 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 | 0.00 | 723.86M | 710.96M | 646.76M | 692.20M |
| Operating Cash Flow | 0.00 | 725.03M | 712.96M | 650.01M | 696.32M |
| Investing Cash Flow | 0.00 | -142.00M | -179.19M | 410.49M | -160.75M |
| Financing Cash Flow | -234.63M | -719.04M | -496.04M | -1.03B | -527.29M |
MGIC Investment Technical Analysis
Negative
26.21
Price Trends
27.68
Negative
27.57
Negative
27.09
Negative
Market Momentum
-0.25
Negative
43.28
Neutral
18.08
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTG, the sentiment is Negative. The current price of 26.21 is below the 20-day moving average (MA) of 26.64, below the 50-day MA of 27.68, and below the 200-day MA of 27.09, indicating a bearish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 43.28 is Neutral, neither overbought nor oversold. The STOCH value of 18.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MTG.
MGIC Investment Risk Analysis
MGIC Investment disclosed 15 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 | $3.02B | 7.88 | 16.17% | ― | 8.86% | 9.51% | |
82 Outperform | $6.11B | 9.37 | 12.75% | 2.02% | 2.40% | 1.18% | |
76 Outperform | $5.92B | 8.88 | 12.35% | 1.88% | 2.78% | -0.50% | |
70 Outperform | $4.38B | 7.81 | 12.72% | 2.78% | -3.68% | 3.65% | |
68 Neutral | $5.99B | 8.53 | ― | 1.89% | 2.20% | 9.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $6.74B | 11.03 | 11.95% | 3.58% | 25.99% | 426.44% |
* Financial Sector Average
MTG
MGIC Investment
25.79
2.21
9.39%
FAF
First American Financial
66.34
3.38
5.37%
RDN
Radian Group
34.27
2.77
8.79%
ESNT
Essent Group
59.14
3.51
6.31%
NMIH
NMI Holdings
38.76
2.80
7.79%
ACT
Enact Holdings
41.15
7.89
23.72%
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 company’s operations, policies, or practices.
The most recent analyst rating on (MTG) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on MGIC Investment stock, see the MTG Stock Forecast page.
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.