Why Is MGIC (MTG) Up 2.3% Since Last Earnings Report?

It has been about a month since the last earnings report for MGIC Investment (MTG). Shares have added about 2.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is MGIC due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for MGIC Investment Corporation before we dive into how investors and analysts have reacted as of late.

MGIC Q4 Earnings Beat Estimates, Revenues Miss, Insurance in Force Up Y/Y

MGIC Investment Corporation reported fourth-quarter 2025 operating net income per share of 75 cents, which beat the Zacks Consensus Estimate by 2.7%. The bottom line also improved 4.2% year over year. Total operating revenues declined 0.9% year over year to $298.7 million, attributable to lower net premiums earned and other revenues. The top line missed the Zacks Consensus Estimate by 2.9%.

The quarterly results reflected stable investment income, partially offset by lower net premiums earned and other revenues.

Operational Update

Insurance in force increased 2.6% year over year to $303.1 billion, exceeding the Zacks Consensus Estimate of $295.5 billion as well as our estimate of $295.6 billion. Meanwhile, primary delinquency rose 1.1% to 27,072 loans during the quarter. Net premiums written declined 0.7% year over year to $230.5 million, missing our estimate of $234.3 million. Meanwhile, net investment income increased 0.5% year over year to $61.6 million, but came in below our estimate of $62.1 million and the Zacks Consensus Estimate of $62.4 million.

Persistency, the percentage of insurance remaining in force from one year earlier was 84.8% as of Dec. 31, 2025, unchanged from the year-ago quarter’s level. Meanwhile, new insurance written increased 7.5% year over year to $17.1 billion. Underwriting and other expenses, net, declined 6.7% year over year to $45.8 million. However, underwriting performance weakened materially, with the loss ratio surging to 13.2% from 3.6% in the prior-year quarter.

Total losses and expenses increased 28.8% year over year to $85.9 million, attributable to a sharp rise in losses incurred, net, which nearly doubled from the year-ago period.

Financial Update

Book value per share, a measure of net worth, increased 12.7% year over year to $23.47 as of Dec. 31, 2025. Shareholder equity was $5.1 billion as of Dec. 31, 2025, down 0.5% from the 2024-end level. MGIC Investment's PMIERs Available Assets totaled $5.7 billion, or $2.5 billion above its Minimum Required Assets as of Dec. 31, 2025. Total assets were $6.6 billion as of Dec. 31, 2025, up 1.4% from 2024-end level. Senior notes totaled $646.1 million as of Dec. 31, 2025, reflecting a 0.2% increase from the 2024-end level.

Capital Deployment

The company repurchased 6.8 million shares of common stock for $189.1 million and paid a dividend of $400 million to the holding company. MGIC also paid a dividend of 15 cents per common share to shareholders. MTG executed a traditional excess of loss reinsurance transaction effective Dec. 1, 2025, which provides $250 million of reinsurance coverage on NIW from 2021.

MTG also bought back shares worth $73.2 million in January 2026. The board approved a 15 cents dividend per common share to shareholders of record on Feb. 17, 2026, to be paid on March 6, 2026. In January, through an insurance-linked note transaction, MTG executed a $324 million excess of loss reinsurance agreement that covers certain policies written between Jan. 1, 2022, and March 31, 2025.

Full-Year Highlights

MTG reported full-year 2025 operating net income per share of $3.14, which beat the Zacks Consensus Estimate by 11.7%. The bottom line also increased 8.6% year over year. Total operating revenues were $1.2 billion, up 0.5% year over year on higher net investment income. However, the figure missed the Zacks Consensus Estimate by 1.5%. Net investment income increased 0.7% year over year to $246.26 million, but came in below our estimate of $246.8 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, MGIC has a subpar Growth Score of D, a score with the same score on the momentum front. However, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise MGIC has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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