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Radian Group Inc. (RDN)
NYSE:RDN
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Radian Group
(NYSE:RDN)
78Outperform
Positive Factors
Leadership Transition
Ms. Sumita Pandit, currently CFO of RDN, will assume the role of Radian President and oversee the mortgage insurance business.
Negative Factors
Leadership Departure
The head of the Mortgage Insurance business is retiring, which is seen as an incremental negative for the company.
Market Performance
Analysts maintain an Underperform rating on RDN, suggesting more favorable upside is available elsewhere in the sector.
Radian Group (RDN) vs. S&P 500 (SPY)
Market Cap
$4.78B
Dividend Yield2.93%
Average Volume (3M)2.37M
Price to Earnings (P/E)8.6
Beta (1Y)0.71
Revenue Growth2.95%
EPS Growth4.08%
CountryUS
Employees1,000
SectorFinancial
Sector Strength85
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)0.99
Shares Outstanding141,220,430
10 Day Avg. Volume1,344,867
30 Day Avg. Volume2,369,433
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.31
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit5.00
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$36.75Price Target Upside8.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Radian Group Business Overview & Revenue Model
Company DescriptionRadian Group Inc., together with its subsidiaries, engages in the mortgage and real estate services business in the United States. Its Mortgage segment offers credit-related insurance coverage primarily through private mortgage insurance on residential first-lien mortgage loans, as well as other credit risk management, contract underwriting, and fulfillment solutions. This segment primarily serves mortgage originators, such as mortgage banks, commercial banks, savings institutions, credit unions, and community banks. The company's Homegenius segment offers title services, including a suite of insurance and non-insurance title, tax and title data, centralized recording, document retrieval and default curative title services, and deed and property reports, as well as closing and settlement services comprising electronic execution and traditional signing services; real estate valuation products and services; and asset management services, as well as a suite of real estate technology products and services to facilitate real estate transactions, such as software as a service solutions. This segment serves consumers, mortgage lenders, mortgage and real estate investors, government-sponsored enterprises, and real estate brokers and agents. The company was founded in 1977 and is headquartered in Wayne, Pennsylvania.
How the Company Makes MoneyRadian Group generates revenue primarily through its mortgage insurance segment. The company earns premiums from providing private mortgage insurance to lenders, which is paid on a monthly or upfront basis by the borrower or the lender. This insurance protects lenders from potential losses if a borrower defaults on a loan. Additionally, Radian earns revenue from its Services segment, which includes real estate and title services, and flood insurance. These services cater to lenders, investors, and government-sponsored enterprises, and provide a diverse revenue stream beyond traditional mortgage insurance. The company's earnings are influenced by factors such as the volume of new insurance written, the performance of insured loans, and the overall health of the housing market. Strategic partnerships with financial institutions and participation in government programs also play a role in Radian's revenue generation.
Radian Group Financial Statement Overview
Summary
Radian Group is financially solid, with strengths in profitability and cash management. While revenue and profit growth are positive, the lack of detailed operational performance metrics suggests potential areas for transparency improvement. The balance sheet is stable, albeit with potential for more efficient asset utilization.Income Statement
Radian Group shows a strong gross profit margin with consistent revenue growth over the years. However, the absence of EBIT and EBITDA figures in the latest year reduces visibility into operational efficiency. The net profit margin is healthy, indicating effective cost management.78
Positive
Balance Sheet
The company maintains a solid equity base with a moderate debt-to-equity ratio, indicative of prudent financial leverage. However, there is room for improvement in terms of asset utilization efficiency, as evidenced by a stable return on equity.75
Positive
Cash Flow
Radian Group demonstrates robust cash flow generation with positive operating cash flow and free cash flow. The free cash flow to net income ratio is strong, reflecting effective cash management practices. However, the decline in operating cash flow compared to previous years is a point of concern.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.29B | 1.24B | 1.19B | 1.33B | 1.44B | Gross Profit |
| 1.25B | 854.52M | 727.22M | 902.53M | 1.07B | EBIT |
| 906.70M | 880.07M | 485.65M | 761.42M | 475.84M | EBITDA |
| 879.30M | 0.00 | 1.06B | 868.53M | 572.74M | Net Income Common Stockholders |
| 604.44M | 603.12M | 742.93M | 600.67M | 393.63M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.88B | 19.00M | 56.18M | 151.15M | 87.92M | Total Assets |
| 8.66B | 7.59B | 7.06B | 7.84B | 7.95B | Total Debt |
| 2.34B | 1.54B | 1.57B | 1.56B | 1.58B | Net Debt |
| 2.31B | 1.52B | 1.51B | 1.41B | 1.49B | Total Liabilities |
| 4.04B | 3.20B | 3.14B | 1.90B | 1.80B | Stockholders Equity |
| 4.62B | 4.40B | 3.92B | 4.26B | 4.28B |
| Cash Flow | Free Cash Flow | |||
| -666.75M | 513.15M | 370.63M | 544.51M | 641.42M | Operating Cash Flow |
| -663.57M | 529.43M | 388.30M | 557.11M | 658.43M | Investing Cash Flow |
| 327.75M | -300.84M | -5.17M | -1.86M | -883.18M | Financing Cash Flow |
| 357.23M | -265.09M | -479.18M | -496.78M | 222.62M |
Radian Group Technical Analysis
Positive
33.89
Price Trends
32.13
Positive
32.33
Positive
33.29
Positive
Market Momentum
0.21
Negative
63.09
Neutral
95.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDN, the sentiment is Positive. The current price of 33.89 is above the 20-day moving average (MA) of 31.91, above the 50-day MA of 32.13, and above the 200-day MA of 33.29, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 63.09 is Neutral, neither overbought nor oversold. The STOCH value of 95.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RDN.
Radian Group Risk Analysis
Radian Group disclosed 34 risk factors in its most recent earnings report. Radian Group 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
Radian Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $5.65B | 8.40 | 14.09% | 1.98% | 4.33% | 10.21% | |
79 Outperform | $6.20B | 8.68 | 15.12% | 1.93% | 4.64% | 15.36% | |
78 Outperform | $4.78B | 8.61 | 13.22% | 2.93% | 2.95% | 4.08% | |
78 Outperform | $2.94B | 8.09 | 17.38% | ― | 11.61% | 14.35% | |
77 Outperform | $6.05B | 8.55 | 13.63% | 1.96% | 11.88% | 5.54% | |
66 Neutral | $4.50B | 12.89 | 6.71% | 1.41% | -4.43% | -45.42% | |
64 Neutral | $12.61B | 9.79 | 7.95% | 16985.69% | 12.77% | -3.98% |
* Financial Sector Average
Performance Comparison
RDN
Radian Group
33.89
3.31
10.82%
AGO
Assured Guaranty
89.64
12.42
16.08%
MTG
MGIC Investment
26.04
5.31
25.62%
ESNT
Essent Group
58.46
3.18
5.75%
NMIH
NMI Holdings
37.48
3.82
11.35%
ACT
Enact Holdings
36.56
5.78
18.78%
Radian Group Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 6.11%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Radian's earnings call reflected a strong financial performance with significant capital returns to shareholders and a stable insurance portfolio. However, challenges in new insurance origination and market volatility concerns were noted. The highlights slightly outweigh the lowlights, indicating a stable yet cautious optimism.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Radian reported net income of $145 million with a return on equity of 12.6% and an increase in book value per share by 11% year-over-year.
High Persistency Rate
The persistency rate for the insurance in force increased to 86% this quarter, the second highest rate observed in over 10 years.
Capital Management and Share Repurchases
Radian repurchased $207 million of shares, representing more than 4% of shares outstanding, with a total return of capital to stockholders, including dividends, up to $244 million.
Positive Cure Trends
Cure rates for defaults were among the highest observed in over 10 years, with a 13% increase in total cures compared to the previous quarter.
Innovative Reinsurance Structure
Radian Guaranty secured a multiyear quota share reinsurance structure with attractive terms and a large panel of third-party reinsurers.
Negative Updates
Challenges in New Insurance Written
New insurance written was $9.5 billion in the first quarter of 2025, lower than the fourth quarter of 2024, primarily due to a smaller origination market.
Decline in Investment Income
Net investment income declined primarily due to lower mortgage loans held for sale.
Market Volatility Concerns
Concerns about the impact of financial market volatility, including uncertainties from tariff and global trade policies, on the business.
Company Guidance
During the First Quarter 2025 Radian Group Conference Call, the company reported strong financial performance and provided several key metrics and strategic outlooks. Radian's book value per share increased by 11% year-over-year, while net income for the quarter was $145 million, translating to a return on equity of 12.6%. Their primary Mortgage Insurance in force reached $274 billion, supported by an 86% persistency rate. Radian's liquidity remained robust with $834 million at the holding company and a PMIERs cushion of $2.1 billion. The company repurchased $207 million worth of shares, representing more than 4% of outstanding shares, and returned a total of $244 million to stockholders, including dividends. Radian also successfully negotiated a multiyear quota share reinsurance arrangement. Additionally, the company reduced its operating expenses by 7% year-over-year and 12% from the previous quarter, demonstrating effective capital and expense management. Looking forward, Radian expects the housing market to remain stable and anticipates continued strong credit performance from its mortgage insurance portfolio.Radian Group Corporate Events
Executive/Board Changes
Radian Group Announces Leadership Transition in 2025
Neutral
Apr 3, 2025
Derek V. Brummer, President of Mortgage Insurance at Radian Group Inc., announced his retirement effective April 21, 2025, earlier than the previously planned date of July 3, 2025. Sumita Pandit, the current Senior Executive Vice President and Chief Financial Officer, will assume the role of President and CFO, overseeing the company’s mortgage insurance business from April 21, 2025. This transition is a result of successful preparation and not due to any disagreements within the company.
Executive/Board ChangesBusiness Operations and Strategy
Radian Group Expands Board with Reinsurance Expert
Positive
Feb 12, 2025
On February 10, 2025, Radian Group expanded its Board of Directors from eleven to twelve members by appointing Jed Rhoads, a seasoned reinsurance executive with over 40 years of experience, including senior roles at Markel Group. Rhoads’ extensive background in reinsurance aligns with Radian’s strategic goals, and his expertise is expected to enhance the Board’s capability to guide the company in transforming risk into opportunity.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.