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MGIC Investment
(NYSE:MTG)
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Rating:72Outperform
Price Target:
$29.00
▼(-7.17% Downside)
Action:Reiterated
Date:10/01/26
The score is driven primarily by strong underlying financial performance (profitability, cash generation, and conservative leverage) and supportive valuation (low P/E plus dividend). These positives are meaningfully offset by very weak technical momentum (price below key moving averages with negative MACD) and, to a lesser extent, earnings-call risks around credit normalization and constrained growth despite positive capital and expense discipline.
Positive Factors
Strong cash generation
Consistently strong operating and free cash flow, with free cash flow closely tracking net income, indicates high earnings quality and effective conversion of underwriting profits into cash. This supports capital resilience, shareholder returns, and continued investment across the next several quarters.
Negative Factors
Sharp revenue decline
A pronounced TTM revenue decline creates uncertainty around the durability of MGIC’s earnings base, particularly because premium revenue depends on insured balances and policy persistency. If the reset persists, it could constrain future profit growth despite currently strong margins and cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently strong operating and free cash flow, with free cash flow closely tracking net income, indicates high earnings quality and effective conversion of underwriting profits into cash. This supports capital resilience, shareholder returns, and continued investment across the next several quarters.
Read all positive factors
MGIC Investment (MTG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.56B
Dividend Yield2.27%
Average Volume (3M)2.26M
Price to Earnings (P/E)8.5
Beta (1Y)0.55
Revenue Growth-1.88%
EPS Growth4.83%
CountryUS
Employees542
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)3.21
Shares Outstanding205,124,850
10 Day Avg. Volume2,945,230
30 Day Avg. Volume2,264,906
Financial Highlights & Ratios
PEG Ratio1.08
Price to Book (P/B)1.28
Price to Sales (P/S)5.43
P/FCF Ratio7.74
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue5.52
Enterprise Value/Gross Profit5.97
Enterprise Value/Ebitda7.15
Forecast
1Y Price Target
$31.50Price Target Upside0.83% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)3.25
Revenue Forecast (FY)$1.19B
MGIC Investment Business Overview & Revenue Model
Company Description
MGIC Investment Corporation, through its various subsidiaries, provides private mortgage insurance alongside a range of other mortgage credit risk management solutions and ancillary services. These offerings are available to lenders and government...
How the Company Makes Money
MGIC primarily makes money by underwriting private mortgage insurance (PMI) on residential mortgage loans, typically when a borrower’s down payment is below a conventional threshold (commonly less than 20%). Its core revenue stream is insurance pr...
MGIC Investment Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized strong profitability, disciplined expense management, meaningful capital flexibility through an expanded reinsurance program, and continued capital returns to shareholders. Credit metrics showed some normalization with a moderate year-over-year rise in delinquencies and slightly lower persistency and premium yields, but management highlighted favorable reserve development, low early payment defaults, and confidence in underwriting. Insurance-in-force growth remains modest given market constraints. Overall, positive operational and capital-management developments outweighed the moderate credit and growth headwinds.Positive Updates
Solid Profitability and ROE
Net income of $182 million in Q2 2026 (EPS $0.86) with an annualized return on equity of 14.5% and EPS up from $0.81 a year ago.
Negative Updates
Delinquency Rate Trending Higher Year-over-Year
Count-based delinquency rate increased 16 basis points year-over-year to 2.37% (despite a 7 basis-point q/q decline driven by seasonality). Management expects seasonality to increase delinquencies in the second half of the year.
Read all updates
Q2-2026 Updates
Positive
Negative
Solid Profitability and ROE
Net income of $182 million in Q2 2026 (EPS $0.86) with an annualized return on equity of 14.5% and EPS up from $0.81 a year ago.
Read all positive updates
Company Guidance
Management's guidance emphasized disciplined capital and expense management: operating expenses are now expected toward the low end of the $190–$200 million full‑year range, and underwriting continues to use a 7.5% initial claim‑rate assumption on new delinquency notices with seasonality expected to push delinquencies higher in H2 (Q2 count‑based delinquency fell 7 bps to 2.37%, +16 bps YoY and 43 bps below Q2‑2019); in‑force premium yield was ~38 bps and is expected to track similarly, investment book yield is ~4% (Q2 investment income $59M), and Q2 underwriting and other expenses were $46M (down from $52M). Capital guidance highlighted $6.0B of balance‑sheet capital, a reinsurance program that reduced PMIERs required assets by ~$3.1B (≈52%) and an XOL providing up to $168M protection on eligible 2027 NIW; Q2 NIW was $18B (+8.5% YoY), insurance in force $305B (+2.6% YoY), net income $182M (EPS $0.86, annualized ROE 14.5%), book value per share $24.27 (+10% YoY), and capital return plans include ongoing buybacks (6.6M shares/$177M in Q2; $746M repurchased over the prior four quarters) and dividends (Q2 dividend 15¢, recently increased to $0.17 quarterly after $135M paid prior four quarters; combined repurchases+dividends were 124% of net income over that period).MGIC Investment Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.20B | 1.21B | 1.21B | 1.16B | 1.17B | 1.19B |
| Gross Profit | 1.10B | 1.15B | 1.21B | 1.17B | 1.41B | 1.11B |
| EBITDA | 922.41M | 971.09M | 1.02B | 974.36M | 1.19B | 939.15M |
| Net Income | 707.85M | 738.35M | 762.99M | 712.95M | 865.35M | 634.98M |
Balance Sheet | ||||||
| Total Assets | 6.53B | 6.64B | 6.55B | 6.54B | 6.21B | 7.33B |
| Cash, Cash Equivalents and Short-Term Investments | 5.91B | 6.16B | 6.08B | 6.09B | 5.74B | 6.87B |
| Total Debt | 646.87M | 646.14M | 644.67M | 643.20M | 662.81M | 1.15B |
| Total Liabilities | 1.51B | 1.49B | 1.37B | 1.47B | 1.57B | 2.46B |
| Stockholders Equity | 5.01B | 5.15B | 5.17B | 5.07B | 4.64B | 4.86B |
Cash Flow | ||||||
| Free Cash Flow | 706.48M | 851.77M | 723.86M | 710.96M | 646.76M | 692.20M |
| Operating Cash Flow | 708.02M | 852.80M | 725.03M | 712.96M | 650.01M | 696.32M |
| Investing Cash Flow | 119.57M | 228.37M | -142.00M | -179.19M | 410.49M | -160.75M |
| Financing Cash Flow | -911.38M | -940.28M | -719.04M | -496.04M | -1.03B | -527.29M |
MGIC Investment Technical Analysis
Negative
31.24
Price Trends
30.01
Negative
28.45
Negative
27.62
Negative
Market Momentum
-0.92
Positive
35.29
Neutral
36.24
Neutral
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 31.24 is above the 20-day moving average (MA) of 28.88, above the 50-day MA of 30.01, and above the 200-day MA of 27.62, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 35.29 is Neutral, neither overbought nor oversold. The STOCH value of 36.24 is Neutral, 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 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 |
|---|---|---|---|---|---|---|---|
84 Outperform | $6.31B | 9.71 | 12.76% | 1.94% | 2.49% | 7.73% | |
78 Outperform | $5.49B | 8.56 | 11.91% | 2.20% | 4.47% | 4.26% | |
77 Outperform | $2.96B | 7.72 | 15.14% | ― | 7.53% | 7.71% | |
74 Outperform | $4.43B | 8.61 | 11.26% | 2.99% | 27.93% | -2.18% | |
72 Outperform | $5.56B | 8.52 | 13.90% | 2.27% | -1.88% | 4.83% | |
71 Outperform | $6.33B | 8.61 | 13.62% | 3.63% | 22.55% | 298.19% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
MTG
MGIC Investment
27.07
0.68
2.59%
FAF
First American Financial
61.29
2.55
4.35%
RDN
Radian Group
33.70
0.32
0.96%
ESNT
Essent Group
61.90
3.60
6.17%
NMIH
NMI Holdings
39.54
3.55
9.86%
ACT
Enact Holdings
46.32
11.02
31.21%
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.