Mgic Investment Stock Fair Value Calculation – MGIC INVESTMENT Reports Q2 Earnings for FY2023, Ending June 30 2023
August 24, 2023
🌥️Earnings Overview
On August 2, 2023, MGIC INVESTMENT ($NYSE:MTG) reported its earnings for the second quarter of FY2023, ending June 30, 2023. Total revenue for the quarter was USD 290.7 million, an insignificant decrease of 0.8% compared to the same period of the previous year. However, net income was USD 191.0 million, which dropped 23.4% from the same period of the previous year.
Market Price
On the same day the company’s stock opened at $16.7 and closed at $16.9, up by 0.8% from previous closing price of 16.8. The increase in net income was primarily driven by higher premiums written and improved underwriting profits. Operating expenses were also lower when compared to the previous year.
This increase was mainly driven by higher volumes in new business and renewal business in the company’s core markets. Overall, MGIC INVESTMENT‘s Q2 earnings report was quite satisfactory and the company expects to continue to perform well in the coming quarters as well. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Mgic Investment. More…
| Total Revenues | Net Income | Net Margin |
| 1.16k | 786.67 | 68.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Mgic Investment. More…
| Operations | Investing | Financing |
| 645.28 | -36.13 | -711.69 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Mgic Investment. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.35k | 1.51k | 17.09 |
Key Ratios Snapshot
Some of the financial key ratios for Mgic Investment are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -2.0% | – | 88.9% |
| FCF Margin | ROE | ROA |
| 55.5% | 13.4% | 10.1% |
Analysis – Mgic Investment Stock Fair Value Calculation
At GoodWhale, we conducted an analysis of MGIC Investment’s fundamentals. Our proprietary Valuation Line revealed that the fair value of MGIC INVESTMENT share is around $18.4. However, at the time of writing, MGIC INVESTMENT stock is traded at $16.9, making it undervalued by 8.3%. This presents an attractive investment opportunity for those looking to take advantage of a fair price. More…
Peers
MGIC Investment Corp, Radian Group Inc, NMI Holdings Inc, and Essent Group Ltd are all mortgage insurance companies. They compete for business by offering different rates and terms to potential customers.
– Radian Group Inc ($NYSE:RDN)
Radian Group Inc. is a mortgage and real estate services company that offers mortgage insurance, mortgage lending, and real estate services. The company has a market cap of 3.1B and a ROE of 15.26%. Radian Group Inc. offers a variety of services including mortgage insurance, mortgage lending, and real estate services. The company is headquartered in Philadelphia, PA.
– NMI Holdings Inc ($NASDAQ:NMIH)
NMI Holdings Inc. is a holding company, which engages in the provision of private mortgage insurance. It operates through the following segments: Insurance Operations, Mortgage Services, and Corporate. The Insurance Operations segment offers primary mortgage insurance on residential mortgage loans. The Mortgage Services segment provides outsourced loan review services to mortgage originators and servicers. The Corporate segment represents the general and administrative expenses. The company was founded by Bradley Shuster, Ross Shapiro, and Erik J. Prusch on July 27, 2011 and is headquartered in Emeryville, CA.
– Essent Group Ltd ($NYSE:ESNT)
Essent Group Ltd is a provider of private mortgage insurance in the United States. The company has a market cap of 3.9 billion as of 2022 and a return on equity of 15.87%. The company offers mortgage insurance to lenders to protect them against losses if borrowers default on their loans. The company also provides reinsurance to other mortgage insurers.
Summary
MGIC Investment Corporation reported its earnings for the second quarter of FY2023, ending June 30 2023. Total revenue for the quarter decreased slightly by 0.8% from the same period of the previous year, at USD 290.7 million. Net income, however, decreased more significantly by 23.4% to USD 191.0 million. This is likely due to impacts from the economic slowdown caused by the pandemic.
Investors should pay close attention to MGIC Investment’s future earnings releases to assess potential future performance. As long-term investments in the company may be subject to higher risk, investors should research and consider the company’s financial health and prospects before investing.
