Assured Guaranty (AGO) AI Stock Analysis

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Assured Guaranty

(NYSE:AGO)

66Neutral

Assured Guaranty shows a solid financial foundation, with recent growth in revenue and profitability. However, the high debt levels and cash flow volatility are significant concerns. Technical indicators suggest a stable short-term outlook, with valuation appealing due to a low P/E ratio and reasonable dividend yield. The earnings call supports a positive strategic outlook but notes some risks, including increased loss expenses.

Assured Guaranty (AGO) vs. S&P 500 (SPY)

Market Cap

$4.23B

Dividend Yield1.47%

Average Volume (3M)353.20K

Price to Earnings (P/E)10.1

Beta (1Y)0.71

Revenue Growth-4.43%

EPS Growth-45.42%

CountryUS

Employees361

SectorFinancial

Sector Strength84

IndustryInsurance - Specialty

Share Statistics

EPS (TTM)3.18

Shares Outstanding49,091,145

10 Day Avg. Volume439,951

30 Day Avg. Volume353,199

Financial Highlights & Ratios

PEG Ratio-0.25

Price to Book (P/B)0.80

Price to Sales (P/S)0.00

P/FCF Ratio92.86

Enterprise Value/Market Cap1.41

Enterprise Value/Revenue1.48

Enterprise Value/Gross Profit8.32

Enterprise Value/Ebitda2.46

Forecast

1Y Price Target

$107.50

Price Target Upside25.12% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Assured Guaranty Business Overview & Revenue Model

Company DescriptionAssured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company operates in two segments, Insurance and Asset Management. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, it is involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, pooled corporate obligations, financial products, and other structured finance securities. Additionally, the company offers specialty insurance and reinsurance that include life and aircraft residual value insurance transactions; and asset management services comprising investment advisory services, including management of collateralized loan obligations, and opportunity and liquid strategy funds. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.

How the Company Makes MoneyAssured Guaranty makes money primarily by charging premiums for providing financial guaranty insurance on bonds and other financial obligations. When the company insures a bond, it guarantees the payment of principal and interest to investors in case of default, thereby enhancing the bond's credit rating and reducing borrowing costs for issuers. AGO earns revenue from the upfront and installment premiums paid by issuers of the insured bonds. Additionally, the company invests the premiums it receives, generating investment income which contributes to its overall earnings. Significant factors that contribute to AGO's revenue include the volume of new insurance policies underwritten, prevailing interest rates affecting investment income, and the credit environment influencing demand for its products.

Assured Guaranty Financial Statement Overview

Summary

Assured Guaranty has demonstrated resilience in revenue recovery and improved profitability in 2023. However, it faces challenges with high leverage and cash flow volatility. The strong equity base is offset by considerable debt levels.

Income Statement

Positive

The revenue has shown inconsistency, with a decline from 2020 to 2022, but a rebound in 2023. The gross profit margin remained strong, and there was a significant improvement in net income for 2023. However, EBIT and EBITDA margins have not been consistently reported, limiting complete profitability analysis.

Balance Sheet

Positive

Assured Guaranty maintains a strong equity base, reflected in a healthy equity ratio. However, a high debt-to-equity ratio remains a concern, although it's stable. The company shows a fluctuating ROE, with a notable increase in recent years, indicating improved profitability.

Cash Flow

Neutral

Cash flow from operations has improved in 2023, showing a positive trend after consecutive years of negative free cash flow. The operating cash flow to net income ratio indicates better cash management, but historical volatility in cash flows presents a risk.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
814.00M	950.00M	684.00M	698.00M	1.08B
	Gross Profit
814.00M	733.00M	517.00M	519.00M	887.00M
	EBIT
532.00M	699.00M	203.00M	426.00M	332.00M
	EBITDA
517.00M	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
376.00M	739.00M	124.00M	389.00M	362.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.46B	132.00M	8.04B	9.55B	9.79B
	Total Assets
11.90B	12.54B	16.84B	18.21B	15.33B
	Total Debt
1.70B	1.69B	1.68B	1.67B	1.22B
	Net Debt
1.58B	1.60B	1.57B	1.55B	1.06B
	Total Liabilities
6.35B	6.77B	11.55B	1.67B	1.22B
	Stockholders Equity
5.50B	5.71B	5.06B	6.29B	6.64B
Cash Flow		Free Cash Flow
47.00M	461.00M	-2.45B	-1.94B	-853.00M
	Operating Cash Flow
47.00M	461.00M	-2.48B	-1.94B	-853.00M
	Investing Cash Flow
780.00M	286.00M	1.74B	23.00M	788.00M
	Financing Cash Flow
-983.00M	-670.00M	612.00M	1.96B	183.00M

Assured Guaranty Technical Analysis

Technical Analysis Sentiment

Negative

Last Price85.92

Price Trends

50DMA

85.22

Positive

100DMA

87.62

Negative

200DMA

85.09

Positive

Market Momentum

MACD

0.40

Positive

RSI

49.28

Neutral

STOCH

13.55

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGO, the sentiment is Negative. The current price of 85.92 is below the 20-day moving average (MA) of 87.10, above the 50-day MA of 85.22, and above the 200-day MA of 85.09, indicating a neutral trend. The MACD of 0.40 indicates Positive momentum. The RSI at 49.28 is Neutral, neither overbought nor oversold. The STOCH value of 13.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGO.

Assured Guaranty Risk Analysis

Assured Guaranty disclosed 54 risk factors in its most recent earnings report. Assured Guaranty 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

Assured Guaranty Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MTG	79 Outperform	$6.34B	8.94	15.12%	1.89%	4.64%	15.36%
RDN	78 Outperform	$4.62B	8.75	13.22%	2.88%	2.95%	4.08%
ESNT	78 Outperform	$6.03B	8.76	13.29%	1.93%	9.87%	3.41%
AGO	66 Neutral	$4.23B	10.12	7.90%	1.47%	-4.43%	-45.42%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%
AMBC	44 Neutral	$370.96M	73.78	-2.23%	―	10.50%	-92.02%
MBI	28 Underperform	$230.70M	―	26.69%	―	583.33%	6.59%

* Financial Sector Average

Performance Comparison

AGO

Assured Guaranty

85.92

11.57

15.56%

MBI

MBIA

4.53

-1.33

-22.70%

MTG

MGIC Investment

26.61

6.09

29.68%

RDN

Radian Group

34.29

3.77

12.35%

AMBC

Ambac Financial

8.07

-9.54

-54.17%

ESNT

Essent Group

59.13

3.95

7.16%

Assured Guaranty Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: -2.47%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call reflected strong financial performance with significant growth in adjusted operating income and successful litigation outcomes. However, there were challenges, particularly related to Puerto Rico and UK water exposures. Despite these issues, the overall sentiment was positive due to strong results and strategic expansions.

Q1-2025 Updates

Positive Updates

Significant Increase in Adjusted Operating Income

Adjusted operating income per share was $3.18 for Q1 2025, up from $1.96 in Q1 2024, representing a 62% increase.

Successful Resolution of Lehman Brothers Litigation

The company recognized a pretax gain of $103 million from the resolution of litigation with Lehman Brothers International.

Strong Performance in US Public Finance

US public finance led with $25 million of PVP, capturing 64% of the primary market insured par sold and 58% of the insured transaction count.

Growth in Alternative Investments

Total first-quarter investment income from alternative investments was $59 million, the highest quarterly level to date, with a 13% annualized rate of return.

Increase in Secondary Market Bond Insurance

Activity in secondary market bond insurance increased substantially, producing $376 million of insured par, more than in all of 2024.

Expansion into European Markets

Post-quarter, the company guaranteed a transaction with XpFibre in France, marking its first primary financial guaranty in the French infrastructure space.

Negative Updates

Losses on Puerto Rico Electric Power Authority

Economic loss development included losses on PREPA, affecting results due to a potential delay in the resolution timeline.

Decreased Net Earned Premiums and Credit Derivative Revenues

Excluding litigation benefits, net earned premiums and credit derivative revenues decreased by $28 million due to lower financial guaranty refundings and terminations.

Challenges with UK Water Exposures

Potential issues with UK water exposures, specifically Thames Water, were discussed with scenarios involving possible haircuts being considered.

Company Guidance

During the first quarter of 2025, Assured Guaranty Limited reported strong financial performance, with adjusted operating income per share increasing to $3.18 from $1.96 in the previous year. Key valuation metrics reached new highs, with adjusted operating shareholders' equity at $117.40 per share, adjusted book value at $172.79, and shareholders' equity per share at $112.80. The company recorded a pretax gain of $103 million from the conclusion of litigation with Lehman Brothers International, contributing significantly to the quarterly results. New business production was $39 million of PVP, primarily from US public finance, which accounted for 65% of the total. Assured Guaranty also experienced substantial growth in secondary market bond insurance, with insured par rising by $376 million compared to all of 2024. The company's alternative investments delivered a total income of $59 million, achieving the highest quarterly level to date, while maintaining an inception-to-date annualized rate of return of 13%. Assured Guaranty continues to focus on strategic asset management and expanding its presence in various sectors and geographies, including a recent transaction in the French infrastructure space.

Assured Guaranty Corporate Events

Financial Disclosures

Assured Guaranty Releases 2024 Financial Supplement

Neutral

Mar 14, 2025

On March 14, 2025, Assured Guaranty Ltd. released its financial supplement and fixed income investor presentation for the period ending December 31, 2024. The audited financial statements indicate a stable financial position with a fair presentation of the company’s operations and cash flows, as confirmed by PricewaterhouseCoopers LLP, reflecting the company’s adherence to US GAAP standards.

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.