MGIC Investment (US:MTG) ZACKS·2025-10-03 14:26Core Insights - MGIC Investment Corporation (MTG) shares closed at $27.75, close to its 52-week high of $29.01, indicating strong investor confidence and potential for further price appreciation [2] - The stock is trading above its 50-day and 200-day simple moving averages, suggesting solid upward momentum [2] Market Performance - MTG has a market capitalization of $6.39 billion, with an average trading volume of 2.18 million shares over the last three months [3] - Year-to-date, MTG shares have gained 17.1%, outperforming the Finance sector and the Zacks S&P 500 composite, which grew by 13.8% and 15.2%, respectively [4] Growth Drivers - MTG is expanding its insurance-in-force portfolio through strong new business and solid annual persistency [6] - The company is enhancing its capital position through capital contributions, reinsurance deals, and maintaining solid cash reserves [6] - Key growth drivers include higher premiums, excellent credit quality, and continued new business momentum [6] Valuation Metrics - MTG shares are trading at a price to forward 12-month earnings ratio of 9.09X, which is higher than the industry average of 8.85X [7] - The return on invested capital (ROIC) has been increasing, currently at 11.2%, significantly better than the industry average of 1.9% [8] Earnings Projections - The Zacks Consensus Estimate for MTG's 2025 earnings per share indicates a year-over-year increase of 3.4%, with revenues projected at $1.23 billion, reflecting a 0.9% improvement [9] - Earnings have grown by 12% over the past five years, surpassing the industry average growth of 9.8% [10] Analyst Sentiment - MTG has consistently surpassed earnings estimates in the last four quarters, with an average surprise of 14.12% [11] - One out of three analysts covering MTG has raised estimates for 2025, leading to a 2.7% increase in the consensus estimate over the past 60 days [12] Strategic Initiatives - New business and solid annual persistency are expected to drive the insurance-in-force portfolio, supported by higher home sales and improved refinance activity [13] - The company is improving its capital position through capital contributions and reinsurance transactions, with a solid cash position [14] - MTG has $742.2 million remaining in its share repurchase authorization through December 2026, reflecting strong mortgage credit performance [16] Conclusion - Higher premiums, outstanding credit quality, and new business are anticipated to drive growth for MGIC Investment [17] - The company’s solid growth projections and attractive valuations, along with optimistic analyst sentiment and favorable ROIC, are expected to benefit MTG in the long term [18]